Here's what I would do, if I were you... (1) volunteer to bathe and clip him (although it sounds like a job that needs professional help), and give her pointers on how to care for her dogs. or, (2) act like you really love the dog and ask if you can adopt/or buy him for $20-50 ~ then get him to a no-kill rescue right away.
A no-kill rescue? I wouldn't do that to a dog. If he doesn't get adopted he'll end up in a kennel for life, unless of course they are one of the very few good ones who has foster homes for every dog. And I doubt this dog would have the best chances for adoption.