Family philanthropy has played an unusually prominent role in this year’s elections, with the questions about conflict of interest at the Bill, Hillary, and Chelsea Clinton Foundation igniting controversies that are likely to be raised at next week’s debates and beyond. That attention has also prompted concerns about DonaldTrump’s foundation, including questions that may well raise concerns about whether funds like his deserve such lucrative tax breaks.
As we wrote in The Chronicle recently, if Americans want nonprofits and donors to play a bigger role in solving problems so government can be smaller, then there are always going to be questions about conflicts of interest like those at the Clinton Foundation.
Mr. Trump’s giving, on the other hand, raises a very different issue. At least it’s much easier to grasp than the complicated workings of the Clinton Foundation. On its 2014 informational tax return, the Donald J. Trump Foundation reported $1.3 million in assets, receiving $497,000 in contributions and giving away some $600,000.
None of the contributions came from Mr. Trump himself or members of his family; no one in the family has contributed to the foundation since 2008. Instead, the year’s contributions came from two sources: $477,000 from the Richard Ebers Inside Sports and Entertainment Group, which is active in what some call the secondary ticket market and others call ticket scalping, and $20,000 from Prestige Mills, a carpet dealer in Long Island City.
The foundation listed no dedicated employees. Applications for grants from the foundation were to be addressed to Donald J. Trump, the foundation’s president. The foundation treasurer was Allen Weisselberg, chief financial officer of the Trump Organization. The three other directors were Donald Trump Jr., Eric Trump, and Ivanka Trump.
Most of the foundation’s 48 contributions over the year were notable for their noncontroversial character and their absence of an organizing principle. There were a few exceptions. The largest contribution, $100,000, almost 20 percent of the total, went to the Citizens United Foundation, the charitable arm of the conservative advocacy group Citizens United. The American Spectator Foundation, a charity associated with the American Spectator, a conservative periodical, got $25,000.
Over all, two-thirds of the donations didn’t even make it to the five-digit level. Some were small enough to be puzzling: What other New York multimillionaire contributes to NewYork Presbyterian Hospital at an annual rate of $1,000?
By contrast, on its 2014 Form 990, the Clinton Foundation reported $354 million in assets, $177 million in revenue, and $91 million in spending through 10 charitable programs it oversees. But little of its income came from the Clinton’s own family foundation and — an even bigger contrast with the Trump case — just a small proportion of its spending took the form of grants to other organizations.
Mystery and Speculation
Mr. Trump maintains that much of his giving is done outside his foundation and anonymously. But we do not know the relationship between the Trump Foundation’s activities and Donald Trump’s other charitable giving because he has not released his recent tax returns.
This knowledge gap has led to speculation and workarounds. Among the rumors: Some people suggest the Trump family stopped contributing to the Trump Foundation because in the years after 2008, Mr. Trump’s tax bill was low enough so that he didn’t need any charitable deductions. An example of a workaround is the yeoman job done by Washington Post reporter David Fahrenthold, who has phoned more than 250 likely beneficiaries of Mr. Trump’s giving in a vain attempt to find any charitable contributions that he has made with his own money since 2009. The single exception has been a donation to the Marine Corps Law Enforcement Fund.
But if we don’t have a sense of the totality of Mr. Trump’s giving, we can draw some conclusions about the Trump Foundation. First, it should not be considered a family foundation. Small family foundations occasionally draw criticism, for example, that they are squandering their resources to satisfy clashing charitable views held by different family members. But these foundations still have legitimacy because they involve families in giving away their own money.
The Trump family is not giving away its own money through the Donald J. Trump Foundation.
Instead, the Trump Foundation belongs to the class of celebrity foundations, yet another American contribution to the world of philanthropy. Unlike family foundations, celebrity foundations gain their legitimacy from their association with a public figure and skill in marshaling other people’s money in pursuit of the causes that person defines. And it must be said that many of them aren’t very good at it.
For every foundation like the Michael J. Fox Foundation, which has generated support for research on Parkinson’s disease, we have many more examples of athletes, entertainers, and politicians who set up foundations at the height of their popularity — often with contributions from sponsors, fans, friends, and special events, like golf tournaments — and accomplish little with them. Without proper attention, these foundations can even become a problem for a celebrity — if, for example, the celebrity’s relatives are found to be on the payroll. But usually, they simply make small grants or run useful programs on a modest scale for a while, then fade into oblivion as the celebrity’s fame diminishes.
The Donald J. Trump Foundation fits this mold. Indeed, it has already been caught in one illegal activity, a contribution to a political-action committee associated with Florida Attorney General Pam Bondi. There is little reason to doubt the foundation’s claim that the contribution was the result of an oversight, but it is the type of lapse that occurs at a celebrity foundation, which no one is taking seriously enough to manage professionally. Adding to the concerns is reporting by the Post’s Mr. Farenthold on Tuesday that the Trump foundation spent more than a quarter-million dollars to settle lawsuits that involved the billionaire’s for-profit businesses. And the list of the foundation’s beneficiaries — medical charities, theater charities, children’s charities, sports charities, indigenous people’s charities — is not typical of a foundation with a well-defined mission. Rather, it portrays an organization that claims the freedom of a family foundation but marshals other people’s money to support it.
Funds’ Ambitions
The Clinton Foundation is also a celebrity foundation but with a much better-developed set of programs and organizational structure. Its problems stem from the tensions that arise when a foundation serving more than one kind of ambition tests the limits of the relationship between government and charity.
The activities of the Trump Foundation have illuminated a much smaller but more pervasive type of tension: the one that arises when a foundation serving more than one kind of ambition tests the boundaries of what we expect from family funds.
For Mr. Trump, like many other celebrities, philanthropy is not so much a way of trying to do good as it is a means of embellishing his “brand,” and in his case, a very dubious one at that.
Leslie Lenkowsky is an Indiana University expert on philanthropy and public affairs and a regular contributor to these pages. He and Suzanne Garment, a visiting fellow at Indiana University, write frequently on philanthropy and public policy.
