1. The US military budget was $515 billion dollars in 2009, which represented an increase from the previous year (although there is/was supplemental funding for the war in Iraq). Of that, $104 billion is allocated for procurement. Armoring our soldiers adequately in Iraq was...less of a priority than you might think.
2. Religious organizations are not allowed to participate in politics, or they can lose their tax exempt status. As far as I know, many non-profits can and do participate in lobbying and other activities that could be termed political (for example I donate money to Planned Parenthood, which I should hope lobbies for pro-choice legislation). I think it's questionable whether donating armor to troops would count as political, but the Wayne Foundation probably isn't going to get in trouble for doing it.
3. As the charitable arm of one of the largest/most profitable corporations in the DCU, the Wayne Foundation can probably afford to donate to many causes. Just from Wikipedia, Bruce uses it to fund free clinics, soup kitchens, medical and scientific awards, artists' grants, and orphanages. It's not an all or nothing game, and protecting soldiers in combat hardly makes him a heartless bastard.
All in all, I don't think the set-up is that stupid. A little far-fetched, maybe, but within the bounds of reasonable possibility.