Don't charities and political parties etc, have to know that the source of the donation is not crime?

The reason for the question is Jon Stewart’s ‘The Daily Show’ segment a few days ago. It involves a clip of Karl Rove. Stewart used the southern accent to say that he thinks they mean “it is muslim money” to imply that southern people are racist and that can be the only reason for them wanting to know what the source of the money is. That, instead of just addressing the issue. Is he not supposed to be a genius? This makes him look like he is insulting the intelligence of his audience. As in him addressing his audience who he thinks must have drank his Kool-Aid?