Believe it or not, there's even more here:How Donald Trump retooled his charity to spend other people’s money
Donald Trump was in a tuxedo, standing next to his award: a statue of a palm tree, as tall as a toddler. It was 2010, and Trump was being honored by a charity — the Palm Beach Police Foundation — for his “selfless support” of its cause.
His support did not include any of his own money.
Instead, Trump had found a way to give away somebody else’s money and claim the credit for himself.
Trump had earlier gone to a charity in New Jersey — the Charles Evans Foundation, named for a deceased businessman — and asked for a donation. Trump said he was raising money for the Palm Beach Police Foundation.
The Evans Foundation said yes. In 2009 and 2010, it gave a total of $150,000 to the Donald J. Trump Foundation, a small charity that the Republican presidential nominee founded in 1987.
Then, Trump’s foundation turned around and made donations to the police group in South Florida. In those years, the Trump Foundation’s gifts totaled $150,000.
Trump had effectively turned the Evans Foundation’s gifts into his own gifts, without adding any money of his own.
On the night that he won the Palm Tree Award for his philanthropy, Trump may have actually made money. The gala was held at his Mar-a-Lago Club in Palm Beach, and the police foundation paid to rent the room. It’s unclear how much was paid in 2010, but the police foundation reported in its tax filings that it rented Mar-a-Lago in 2014 for $276,463.
The Donald J. Trump Foundation is not like other charities. An investigation of the foundation — including examinations of 17 years of tax filings and interviews with more than 200 individuals or groups listed as donors or beneficiaries — found that it collects and spends money in a very unusual manner.
For one thing, nearly all of its money comes from people other than Trump. In tax records, the last gift from Trump was in 2008. Since then, all of the donations have been other people’s money — an arrangement that experts say is almost unheard of for a family foundation.
Trump then takes that money and generally does with it as he pleases. In many cases, he passes it on to other charities, which often are under the impression that it is Trump’s own money.
In two cases, he has used money from his charity to buy himself a gift. In one of those cases — not previously reported — Trump spent $20,000 of money earmarked for charitable purposes to buy a six-foot-tall painting of himself.
Money from the Trump Foundation has also been used for political purposes, which is against the law. The Washington Post reported this month that Trump paid a penalty this year to the Internal Revenue Service for a 2013 donation in which the foundation gave $25,000 to a campaign group affiliated with Florida Attorney General Pamela Bondi (R).
Trump’s foundation appears to have repeatedly broken IRS rules, which require nonprofit groups to file accurate paperwork. In five cases, the Trump Foundation told the IRS that it had given a gift to a charity whose leaders told The Post that they had never received it. In two other cases, companies listed as donors to the Trump Foundation told The Post that those listings were incorrect.
Last week, The Post submitted a detailed list of questions about the Trump Foundation to Trump’s campaign. Officials with the campaign declined to comment.
Trump and his Democratic opponent, Hillary Clinton, have both been criticized during their campaigns for activities related to their foundations.
Critics have charged that the giant Bill, Hillary and Chelsea Clinton Foundation, which employs more than 2,000 people and spends about a quarter of a billion dollars a year, has served as a way for businesses and powerful figures across the world to curry favor with one of America’s most powerful families. The Clinton Foundation has also been credited by supporters and critics alike for its charitable efforts.
Trump has claimed that he gives generously to charity from his own pocket: “I don’t have to give you records,” he told The Post earlier this year, “but I’ve given millions away.” Efforts to verify those gifts have not succeeded, and Trump has refused to release his tax returns, which would show his charitable giving.
That leaves the Trump Foundation as the best window into the GOP nominee’s philanthropy.
In the past several days, questions about Trump’s foundation have focused on the gift to Bondi’s group in 2013. At the time the money arrived, Bondi’s office was considering whether to launch an investigation into allegations of fraud by Trump University — accusations that Trump denies.
The investigation never started. Aides to Bondi and Trump say the gift and the case were unrelated. But Democrats have seized on what they see as a clear example of political influence improperly funded by Trump’s charity.
“The foundation was being used basically to promote a moneymaking fraudulent venture of Donald Trump’s. That’s not what charities are supposed to do,” Virginia Sen. Tim Kaine, Clinton’s running mate, said Friday. “I hope there’s a significant effort to get to the bottom of it and find out whether this is the end.”
A threadbare operation
Trump started his foundation in 1987 with a narrow purpose: to give away some of the proceeds from his book “The Art of the Deal.”
Nearly three decades later, the Trump Foundation is still a threadbare, skeletal operation.
The most money it has ever reported having was $3.2 million at the end of 2009. At last count, that total had shrunk to $1.3 million. By comparison, Oprah Winfrey — who is worth $1.5 billion less than Trump, according to a Forbes magazine estimate — has a foundation with $242 million in the bank. At the end of 2014, the Clinton Foundation had $440 million in assets.
In a few cases, Trump seemed to solicit donations only to immediately give them away. But his foundation has also received a handful of bigger donations — including $5 million from professional-wrestling executives Vince and Linda McMahon — that Trump handed out a little at a time.
The foundation has no paid staffers. It has an unpaid board consisting of four Trumps — Donald, Ivanka, Eric and Donald Jr. — and one Trump Organization employee.
In 2014, at last report, each said they worked a half-hour a week.
The Trump Foundation still gives out small, scattered gifts — which seem driven by the demands of Trump’s businesses and social life, rather than by a desire to support charitable causes.
The foundation makes a few dozen donations a year, usually in amounts from $1,000 to $50,000. It gives to charities that rent Trump’s ballrooms. It gives to charities whose leaders buttonholed Trump on the golf course (and then try, in vain, to get him to offer a repeat donation the next year).
It even gives in situations in which Trump publicly put himself on the hook for a donation — as when he promised a gift “out of my wallet” on NBC’s “The Celebrity Apprentice.” The Trump Foundation paid off most of those on-air promises. A TV production company paid others. The Post could find no instance in which a celebrity’s charity got a gift from Trump’s own wallet.
Another time, Trump went on TV’s “Extra” for a contest called “Trump pays your bills!”
A professional spray-tanner won. The Trump Foundation paid her bills.
About 10 years ago, the Trump Foundation underwent a major change — although it was invisible to those who received its gifts.
The checks still had Trump’s name on them.
Behind the scenes, he was transforming the foundation from a standard-issue rich person’s philanthropy into a charity that allowed a rich man to be philanthropic for free.
Experts on charity said they had rarely seen anything like it.
“Our common understanding of charity is you give something of yourself to help somebody else. It’s not something that you raise money from one side to spend it on the other,” said Leslie Lenkowsky, the former head of the Corporation for National and Community Service, and a professor studying philanthropy at Indiana University.
By that definition, was Trump engaging in charity?
No, Lenkowsky said.
“It’s a deal,” he said, an arrangement worked out for maximum benefit at minimum sacrifice.
In the Trump Foundation’s early days, between 1987 and 2006, Trump actually was its primary donor. Over that span, Trump gave his own foundation a total of $5.4 million. But he was giving it away as fast as he put it in, and by the start of 2007, the foundation’s assets had dropped to $4,238.
Then, Trump made a change.
First, he stopped giving his own money.
His contribution shrank to $35,000 in 2007.
Then to $30,000 in 2008.
Then to $0.
At the same time, Trump’s foundation began to fill with money from other people.
But in many other cases, his biggest donors have not wanted to say why they gave their own money, when Trump was giving none of his.
“I don’t have time for this. Thank you,” said Richard Ebers, a ticket broker in New York City who has given the Trump Foundation $1.9 million since 2011.
“No. No. No. I’m not going to comment on anything. I’m not answering any of your questions,” said John Stark, the chief executive of a carpet company that has donated $64,000 over the years.
Vince and Linda McMahon declined to comment.
So did NBCUniversal, which donated $500,000 in 2012. Its gift more than covered the “personal” donations that Trump offered at dramatic moments on “The Celebrity Apprentice” — then paid for out of the Trump Foundation.
Trump’s donations to the Palm Beach Police Foundation offered a stark example of Trump turning somebody else’s gift into his own charity.
Tax experts said they had rarely heard of anything like what Trump had done, converting another donor’s gift into his own.
“I question whether it’s ethical. It’s certainly misleading. But I think it’s legal, because you would think that the other foundation that’s . . . being taken advantage of would look out for their own interests,” said Rosemary E. Fei, an attorney in San Francisco who has advised hundreds of small foundations. “That’s their decision to let him do that.”
After three years, the Charles Evans Foundation stopped using Trump as a middleman.
“We realized we don’t need to do it through a pass-through,” said Bonnie Pfeifer Evans, the widow of Charles Evans and a trustee of the now-defunct foundation.
In 2012, the Charles Evans Foundation stopped giving money to the Trump Found In 2013, according to tax records, the Trump Foundation stopped giving to the Palm Beach Police Foundation.
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