His second-place finish in the Iowa caucuses denied Donald Trump the definitive victory he was hoping for, but the business tycoon’s campaign has been a big win for his private foundation.
Mr. Trump skipped a debate a few days before Iowans cast their votes so he could hold his own forum, where he raised money for veterans’ causes. The gambit attracted $6 million in donations, Mr. Trump told the Associated Press, including more than $660,000 given through a website run by the Donald J. Trump Foundation. Mr. Trump has not made a personal donation to his foundation since 2008. While his philanthropy may have a halo effect, making him appear to be generous, Mr. Trump’s political rise has prompted some to question his giving habits. Here’s a look at the Republican presidential contender’s philanthropic activity.
Do grants made by the Donald J. Trump Foundation reflect the total of Mr. Trump’s giving?
According to Internal Revenue Service filings, Mr. Trump has not donated to his namesake foundation since 2008, when he made a $30,000 gift. As president of the foundation, Mr. Trump decides where to make grants, but the money has primarily come from others, including Richard Ebers of Inside Sports and Entertainment Group, who gave $477,400 in 2014, the last year for which records are available. Other donors include the Clancy Law Firm in New York, which gave $100,000 in 2013; 20th Century Fox Film Corporation, which gave $10,000 the same year; and NBCUniversal, which donated $500,000 in 2012.
In 2014, the foundation made $591,450 in grants, down from $913,075 in 2013 and $1,712,089 the previous year.
Mr. Trump, who has built his name into one of the splashiest brands in real estate and entertainment, told the Associated Press he has made donations of cash and land totaling $102 million over the past five years. Many of those gifts may have been given anonymously, and his campaign did not provide detailed documentation backing up all of the gifts. According to the report, one donation came with a promise never to build luxury homes on a parcel of land in Rancho Palos Verdes, Calif. By donating in the form of a conservation easement and promising not to construct the homes, the land’s value dropped, lowering Mr. Trump’s tax liability. Mr. Trump was a “possible multimillion dollar beneficiary” of the transaction, which allowed him to go ahead with previous plans to construct a golf driving range on the site, according to the Associated Press.
Does the mingling of foundation work and political campaigning run afoul of Internal Revenue Service charity regulations?
As he stumped across Iowa, Mr. Trump encouraged potential voters to contribute to veterans’ organizations through his foundation. Those pitches, charity tax lawyers say, are well within Mr. Trump’s First Amendment rights. But foundations are forbidden from intervening directly in political races, either by endorsing or contributing to candidates. IRS rules also warn against foundation leaders using their organizations for personal gain. But the agency looks into the particular “facts and circumstances” of nonprofit political activity, making the rules subject to interpretation, according to Marcus Owens, an expert in nonprofit law and former director of the IRS Exempt Organizations Division.
“You’d expect a foundation board to avoid or minimize occasions where it might look like it’s engaging in political activity,” Mr. Owens said. “He’s dancing in a gray area there.”
Public charities solicit donations. Is it improper for Mr. Trump to ask the public to give to his private foundation?
No. But the response his appeal is drawing could affect the nature of the organization and the tax implications for its donors. For a group to be considered a public charity, more than one-third of its fundraising must come from small donors over a period of five years. This does not cover the Trump foundation, which has been largely funded with big gifts from a small group of donors. But Mr. Trump’s recent solicitations on behalf of veterans’ groups may throw those calculations off, raising the foundation’s so-called public support above the one-third threshold and rendering it a public charity.
Donors to public charities, in some cases, are able to deduct more of their income for tax purposes. But then, the size of their tax bill might not matter to Trump foundation donors.
“Some of these donors may not care about the deduction,” Mr. Owens said. “They’re giving for another reason: They want to be friends with Donald Trump.”
Other billionaires don’t solicit funds for their private foundations. Why should Mr. Trump?
Industrialists like the Rockefellers or technology entrepreneurs like Bill Gates accumulated vast amounts of wealth that they then deployed toward philanthropy. Mr. Trump is also wealthy, but he has something else: celebrity. It isn’t unusual for celebrities to use nonprofits to raise money, said Douglas Varley, an expert in nonprofit law, but usually they do so through public charities rather than foundations. Donors cannot expect a quid pro quo for their gift, Mr. Varley said, but the “incidental” benefits of donating to a celebrity’s nonprofit are fine.
“Why would you give to Gates and Rockefeller?” he asked. “The last thing they need is more money. Giving to a celebrity is different. It’s not the ordinary philanthropic model for an industrialist, but it’s normal for a celebrity.”
Which charities does Mr. Trump support through his foundation?
The Donald J. Trump Foundation backed a wide range of organizations in 2014, including Citizens United Foundation, a conservative advocacy group, which received $100,000; the Alliance for Lupus Research, which got $10,000; and the Anti-Defamation League, which received $26,500. The foundation also made smaller gifts, including a $700 donation to the Florida Atlantic University spirit team and $250 to the James Whitcomb Riley Memorial Association, which supports the Riley Hospital for Children in Indianapolis.
Over the past several years, Mr. Trump’s foundation has also placed money in donor-advised-fund accounts. When money is put into a donor-advised fund, it may be distributed directly to a charity or it may sit in the account and accrue investment gains. In 2014 the foundation put $20,000 into an account managed by Fidelity Charitable. The previous year, the foundation placed $115,000 in the fund.
How generous is Mr. Trump compared with other American billionaires?
Mr. Trump is not among the 142 wealthy individuals and couples who have publicly committed, via the Giving Pledge, to donate at least half of their fortunes to charity. Last year Forbes magazine estimated Mr. Trump’s net worth at $4.5 billion, placing him at No. 121 on the Forbes 400 list of wealthy Americans. (Mr. Trump says he’s worth more than twice that amount.) If he donated $102 million over five years, or about $20 million a year, his annual average giving would amount to less than half of 1 percent of his total wealth, assuming his wealth remained constant during that period. By comparison, Marc Benioff, the chairman of Salesforce.com, ranked 149th on the Forbes list with a net worth of $4.4 billion, but he and his wife, Lynne, donated nearly $155 million in 2014 alone, ranking the couple 14th in The Chronicle’s Philanthropy 50 list of top donors for that year. However, gifts during single years do not always provide an accurate gauge of a donor’s generosity; some give more at a specific time due to factors such as their age, how their business is doing, or when a special opportunity arises to serve a favored cause.
