Recent news reports about the Clinton Foundation and Trump Foundation allow us to draw sharp distinctions between the two organizations.
Starting with the basics, the Clinton Foundation is a properly registered charity that is actually active in attempts to do good in the world. The Clinton Foundation completes required filings and audits. Some transactions reported in this election cycle are eyebrow-raising although this is not in itself unusual for a large charity. Conflicts of interest are unavoidable in large foundations. The key to proper operation is disclosure through accurate accounting and public informational filing. The Clinton Foundation appears to have met this standard. There appears to be no attempt to hide anything and no accusations that the foundation is not forthcoming in its dealings. Some allege a conflict of interest where the Clinton Foundation accepted donations from those dealing with the State Department. Yet there is no credible allegation that the Clinton Foundation is enriching the Clintons. In other words, the allegation of “pay to play” translates to a charge of “pay to provide humanitarian aid worldwide in order to get into the good graces of the US government”. Not so terrible an accusation, in my opinion, if it is true. In this recent interview James Carville points out the unique position of the Clinton Foundation to save lives in the world today.
Contrast this to the recent news of the Trump Foundation that is not properly registered as a charity permitted to solicit donations, according the New York’s attorney General. Trump Foundation did not produce required audit reports. The Trump Foundation is not involved in any charitable activities like the Clinton Foundation but instead just passes money on to selected organizations; acting as a power-broker of nonprofit funds. Even more concerning are the multiple accusations that foundation funds were improperly used to pay Trump’s business expenses or, in one case, make a donation to a Florida official who was considering whether to prosecute Trump for fraud. It now seems that the CPA who prepared the Trump Foundation tax filings may have collaborated with management of the nonprofit to deceive the public and violate the law. Veterans groups selected to receive donations complained that they did not receive what Trump publicized. On May 31 Trump was pressured to make additional disbursements to veterans groups in an attempt to quiet media criticism about his foundation’s stinginess. One reporter wrote “Another day, another new way the Trump Foundation may have broken the law”. From an accountant’s perspective, the news about improprieties by a nonprofit entity is jaw-dropping. The Trump Foundation may be the most egregious violation of charity tax laws this country has seen in recent times.
US News and World Report ran an article contrasting the Clinton Foundation with the Trump Foundation. The allegations of wrongdoing against the “oh so shady charitable foundation” operated by Trump grew significantly more severe after the article was published. Yet the article’s conclusion “Whatever you think of the Clintons, their foundation has been a force for good” remains the most valid point in this discussion.