I am so thrilled to see 2 more people involved with rescue - this is fabulous!
A couple of things, each rescue is different and your questions are good in terms of being a foster for a rescue organization. In our organization the fosters donate food, vitamins, grooming time and trips to the vet and also to meet potential new parents. The rescue pays for all medical and medicine issues, spay/neuter, teeth cleaning, micro-chips and a new lupine harness (our average cost was $350 per dog). Some rescues can not afford doing all the medical things we do so their adoption costs are smaller. We are small so our foster parents have to use our vet and our vet bills us for all the costs and we give the vet approval for these costs. I know in large national rescues people are reimbursed, up to a certain amount the medical bills (also have to have pre-approval) but usually pay for the food, etc. In city wide rescues, some rescues even give food to the foster parents but this is usually food that has been donated to the rescue organization. In some of the large organizations if the dog is so ill with LS (an example) the dog is turned over to national people who work with specific vets for this major surgery. Each organization is different in terms of home visits and who usually preforms these and some organizations reimburse people for mileage (we were to small to do this) but people could track this and use this on their income tax. Usually foster parents are just a safe haven for these little ones and do not have contact with the adopting parent unless one of the officers of the organization would like them to be there. All communication, approvals, home visits, etc are done with people in the rescue organization. Hopefully you see that there really are two levels in rescue (rescue organization & foster families) and in some cases these people are both.
Now on to your comment about the $1000 rescue. Again each rescue is different but I see nothing wrong with this as this is a national rescue (Yorkshire Terrier Club of America National Rescue) and I can guarantee you that more $$$ flows out than in and when you get a dog that is as special as this one it is a way to recoup some of the expenses for the older, sick, injured dogs that are already passed through rescue or will be coming in with very expensive medical bills. If you go to the website you will see many, many older dogs, injuried dogs that only cost $150 to adopt) Just because an animal comes into rescue does not mean they are of lesser value and in this case if someone would be buying from a breeder they would be paying more than $1000 for this dog. In this individual situation everyone including future rescues win because the rescue will have more cash flow, the adoptive parents paid less for a high quality dog and the dog goes to a wonderful family. I also know breeders have donated top quality dogs to help rescue raise $$$. To also understand why some rescues have different costs associated with each dog you would have to see their books to understand the cash flow in and the cash flow out. It is not based on each individual dog but the non profit (501c3)organization trying to operate within legal tax laws. Many breed specific organizations also help with education to the public (takes time and money) fund raising for medical studies (liver shunt) to name just a few along with maintaining websites and putting on events for fundraising - all these things cost $$$.
Rescue organizations are also different than city/state animal control organizations (they receive $$ through taxes). You also have ASPCA, Humane Societies, Best Friends to name a few which are private organizations (501c3 status) which also help with National Disasters.
Again, let me say this...Rescue is not a means of getting a cheaper dog but to help some animal have a second chance and not be euthanized. If you look at it as just a cheaper dog than you are not seeing the bigger picture of saving an animals life and keeping a cash flow going into the rescue organizations because if they don't have enough cash for the next dog then they will have to close down and more animals will be euthanized. It is the same as if you were a parent and one of you worked and brought home the paycheck. Some of your children just need food and yearly exams but some of your children might have very high medical bills or needs and you spend your paycheck based on needs. You don't say each child gets a set amount.
Not all rescues are the same and how they operate based on their policies and their requirements. Some rescues can only afford to pull the dogs out of the pounds (saving them from euthanization) and adopting them out after their spay/neuter. Others can afford to pay for more things done upfront but either way the new parent will be paying for these things if they want a healthy animal.
One flag everyone should watch for is if a rescue does not spay/neuter the animal than run in the other direction. There is not a reputable rescue that I know that would let an animal out to breed. Rescue's know we have to many animals now dying in the pounds and they would not be adding to the overpopulation.
I can only say this...if you started adding up the cost of each individual dog that comes through rescue it would far out weigh the money that is donated to all the organizations.