Is it legal for a group to invest all their donated money into the river then pocket the profits (assuming they own the river property).
This is a fun question, but let's see if we can land on something educational. I suppose the first point of order is why the money was donated. Since we are using the term "donated" as opposed to "invested" we are safe to assume that individuals forking over cash to this endeavor are not expecting a ROI (return on investment). If they were investing these funds with the mutual understanding of the river cleaning venture managers, then yes, that would be fraud/theft, and, therefore, illegal. In this case, donations lend to the assumption that the givers are not expecting anything back. If the river cleaning venture managers secretly owned property along the river, maybe you could say they were not upfront with their intentions. I suppose it could be misleading enough to be false advertising at most, but I am not lawyer. Perhaps one could argue that if they were seeking donations to clean the river only for the sake of increased property values they could have financed the river cleaning with a loan and still had a profit. That said, seeking a loan (which includes interest) would, I safely assume, be costlier on the margin than seeking donations (via word of mouth, flyers, social media campaigns, etc). We can safely assume this because the river cleaning venture went the donation route, as opposed to the loan. If the loan were cheaper they would have went that route instead.
What if the river front property owner donated to said charity themselves and benefited from the clean river property value boost as well as tax write-offs?
Question for you, Malachi, are you seeking out investors to aid in the purchase of river front property and/or the establishment of a river-improving charity?