A Brief Analysis of the Clinton and Trump Foundations

by Jacob Harold, on 9/12/16 8:30 AM

Non
profits are a cornerstone of American democracy. They reflect the political
diversity of the American people. That diversity is well illustrated by two
institutions currently in the news: the Bill, Hillary and Chelsea Clinton
Foundation and the Donald J. Trump Foundation.
GuideStar takes no position on elections and we will not comment on Hillary
Clinton or Donald Trump as candidates for the presidency. We have, however,
been repeatedly asked about the Trump and Clinton Foundations. Accordingly, we
would like to offer a few notes of analysis on their structure, size, strategy, and
transparency practices.

STRUCTURE
Let us begin with a comparison of the basic facts. The Trump Foundation is
legally categorized as a private non-operating foundation whereas the Clinton
Foundation is a public charity. In simple terms that means the Trump
Foundation is meant primarily as a vehicle for distributing grants from the Trump
family fortunealthough it also accepts funding from other donors. The Clinton
Foundation is meant primarily as a vehicle for directly operating programs for the
social goodwhile also making some grants to other organizations.
Despite these differences, both organizations are, in a (non-legal) sense,
celebrity foundations. They are seeded by money donated by their founders
and also serve as a vehicle for members of the public to demonstrate their
support of a prominent person. At their worst, celebrity foundations are vanity
projects with negligible impact. At their best, such organizations channel
fragmented resources and yield extraordinary impact for society. For example,
the Michael J. Fox Foundation is known as one of the most sophisticated players
in the fight against Parkinsons Disease.
Both the Trump Foundation and the Clinton Foundation are filed under section
501(c)(3) of the U.S. tax code, meaning they legally cannot engage in electoral
activity. In general, they appear to have followed this requirement. There is at
least one exception, though. The Trump Foundation made one donation to a

political action committee associated with Florida Attorney General Bondi. It is

not legal for a foundation to make a donation to a PAC; the Trump Foundation
has paid a $2,500 IRS fine for this infraction. The Trump Foundation
characterized this as a clerical error although others have described it as a case
of "pay-to-play politics." At the very least, this incident indicates insufficient
controls and lax managerial oversight.
SIZE
One thing is indisputable: the Clinton Foundation is far larger than the Trump
Foundation. The latest comparable data from December 31st, 2014 shows the
Clinton Foundation with assets of $354 million, compared with the Trump
Foundations $1 million. The Clinton Foundation had total expenses of
$91,281,145, versus $596,450 for the Trump Foundation. The Clinton Foundation
had 486 staff compared to zero staff at the Trump Foundation.
The Clinton familys tax returns suggest that the majority of its charitable giving
has been through the Clinton Foundation. Without access to Mr. Trumps tax
forms it is difficult to know the scale of his charitable activities outside the Trump
Foundation. But it does appear that the dollars have not matched the pledges.
An investigation by the Washington Post has not been able to validate that
Trump has actually donated the money he pledged, instead finding, Trump
promised millions to charity. We found less than $10,000 over 7 years. In
addition, the last donation to the Trump Foundation by any of its trusteesfamily
or otherwisewas in 2008. Indeed, David Farhenthold of the Post has suggested
that the Trump Foundation has transformed over the last decade from "standardissue rich persons philanthropy into a charity that allowed a rich man to be
philanthropic for free."
All told, the data at hand would suggest that the Clinton family hasat least over
the last several yearsdonated more money (and at a far higher proportion of
their wealth) than the Trump family.
Similarly, it appears clear that the Clintons have out-raised Trump. The Clintons
fundraising for their foundation is one aspect of a broader fundraising
portfolio totaling $3 billion over the last four decades. This is a remarkable
number but they are not alone operating at this level: the Bush family raised
$2.4 billion over a similar period. Trump has certainly helped raise money for
both charitable and electoral efforts, but the total is undoubtedly less than the
Clintons.
Fundraising at this scale takes place in a rarefied social circle. Each of these
familiesthe Clintons, the Bushes, and the Trumpsmust navigate a tangle of
relationships with wealthy individuals. These relationships have caused some to
claim that fundraising for the Clinton Foundation compromised Clintons role as
Secretary of State. There appears, though, to be little evidence to support this
claim. The Clinton Foundation signed an MOU in 2008 clarifying that Hillary
Clinton would not have a role with the Foundation during her tenure at the State

Department. And, indeed, funding for the Clinton Foundation decreased

significantly during that period (2009-2013). A fair argument can be made that
the Clinton Foundation should have been more aggressive in dealing with the
perception of potential conflict. To its credit, the Foundation now proactively
shares its key legal and audit documentation and has built a tool on its
website to provide an additional layer of transparency about its donors
(including both Donald and Ivanka Trump).
TRANSPARENCY AND STRATEGY

Transparency is not a
guarantee of effectivenessbut, in general, we believe that transparency
is correlated with excellence in nonprofits. Transparency indicates an openness
to questions and accountability. And, importantly, the act of transparency can
force an organization to be clear about its goals and strategy.
Most nonprofitsincluding the Trump and Clinton Foundationsare required by
law to file a regulatory document with the IRS, the Form 990. The 990 provides

important baseline information but does not give a full view of the nuances of
nonprofit work. Accordingly, GuideStar invites nonprofits and foundations to
share additional data. Approximately 128,000 have done so. Some 34,997
organizations have provided enough to get one of GuideStars four transparency
seals; of those, 1,061 have earned the highest level, Platinum. The Clinton
Foundation is one of them. The Trump Foundation has provided no additional
information and so has not earned a transparency seal.
As a part of achieving a Platinum seal, the Clinton Foundation has provided a set
of quantitative metrics about its programs. For example, one metric, number of
farmers benefitting from access to improved agricultural practices, increased
yields, and enhanced market access, rose from 66,124 in 2014 to 114,825 in
2015. Another, the number of girls and women provided access to job skills
training and livelihood support, rose from 35,587 in 2014 to 48,696 in 2015. The
fact that the Clinton Foundation provides such metrics makes it far easier for
donors and citizens to meaningfully analyze the institutions value to society.
The Trump Foundation provides no such metrics. Any analysis must therefore be
based on the content of publicly available tax forms. These forms appear to
indicate an unfocused generosity. For example, the below sample from the Trump
Foundation's 2014 tax return includes grants to the Orthopaedic Foundation, the
Palm Beach Opera, the Police Athletic League, Protect our Winters, and the
Ronald McDonald House of New York. There is nothing inherently wrong with
sprinkling many small grants in unrelated areas. But the Trump Foundations
approach would certainly not meet the standard of focused, proactive
grantmaking commonly called strategic philanthropy.

CONCLUSION
Both the Clinton and Trump Foundations have been the subject of controversy
while seeking to contribute to social good. They are undoubtedly different from
each other in size, structure, and openness. Indeed, the two organizations reflect
the perceived styles of the two candidates: one systematized, the other
improvisational. Donors regularly decide which approach they prefer for their
giving. Later this year voters will decide which approach they prefer for their
leadership.
Want to continue the discussion? Share your comments, questions, and thoughts
regarding this article in The GuideStar Community.

Jacob Harold is GuideStar's president and CEO. Harold

came to GuideStar from the Hewlett Foundation, where he led grantmaking for
the Philanthropy Program. Between 2006 and 2012, he oversaw $30 million in
grants that, together, aimed to build a 21st-century infrastructure for smart
giving. Jacob was named to the NonProfit Times (NPT) Power and Influence Top
50 list in 2014, 2015, and 2016. He has written extensively on climate change
and philanthropic strategy; his essays have been used as course materials at
Stanford, Duke, Wharton, Harvard, Oxford, and Tsinghua. Harold earned an AB
from Duke and an MBA from Stanford. He grew up in Winston-Salem, NC where
his parents ran small, community-based nonprofits.
NOTES:

The data on the two foundations sizes comes from the Forms 990 filed by the
two foundations in 2015 reflecting the period from January 1-December 31, 2014.
Because the Trump Foundation is categorized as a private non-operating foundation, it
files a Form 990-PF. As a public charity, the Clinton Foundation files a 990.

The Donald J. Trump Foundation is not to be confused with the Israelbased Trump Foundation or the Eric Trump Foundation.

The majority of organizations with transparency seals on GuideStar do direct

service in their communities. But many policy and advocacy organizations across the
political spectrum also share additional data, including the Heritage
Foundation (Platinum) or the ACLU Foundation (Gold).

GuideStars data comes from three primary sources, including the IRS Form 990
that most nonprofits are required to file. We have posted and digitized millions of 990s.

Data about individual political contributions above $250 by American citizens can
be found at www.opensecrets.org.
Further sources:

Richard W. Painter, "The Real Clinton Foundation Revelation," The New

York Times, August 31, 2016.

Eugene Robinson, "Hillary Clinton must learn from her mistakes," The
Washington Post, August 29, 2016.

Jim Rutenberg, "Trump is Testing the Norms of Objectivity in

Journalism," The New York Times, August 7, 2016.

Ben Davis, "Donald Trump: The Least Charitable Billionaire In The

World," News Examiner, September 2015.

Ruth McCambridge, Clinton Foundation Doles Out Funds to Friends: Is

There a There There? Nonprofit Quarterly, May 16, 2016.