[Steven Smith]

I am by no means an expert or a tax lawyer, but here is what I believe to be true.

What your 501c3 is telling you is correct. For them to give you unlimited access to the funds and dispersing them, without them having any oversight, is to act as a "fiscal agent".

It is not necessarily illegal, but essentially, you are "using" their tax free status for your own purposes, and they are legally responsible to make sure the funds are dispersed properly (for a charitable purpose).

If you had 100% control of the checking account, what keeps you from being able to receive a grant from FIRST to a legal 501c3, then turn around and write a check to yourself and keep the money? Your best bet is to either work within their system as best you can to have them order on your behalf, or float the charge on a credit card waiting on the reimbursement. To have more unlimited control over your funds, you basically need to either start your own 501c3, or be high enough up on an existing one to have purchasing power.

Just my 2c.