You CAN solicit funds from the public without a 501C3, that is correct, but you typically need a "license" to do so which simply consists of a "standard" disclaimer announcing that the donations are NOT tax deductible, but it also relates to the format you use for the solicitation, etc.. (media, tv, written ad.. blah blah..)
If you HAVE a 501C3, there are a bevy of rules on how it can be spent, the management of it, etc...
In short, without a 501 they can use that cash anyway they want, as long as they do not overtly lie about their intention, really, which COULD include legal defense...
With a 501 the misuse can and will land you in the slammer- ask John Edwards old manager... sorry, OT