The Donald J. Trump Foundation was a New York–based tax-exempt private foundation formed in 1988 by Donald Trump and dissolved by court order in 2018 after various legal violations came to light.
The foundation was created to receive royalties from Trump's 1987 book Trump: The Art of the Deal as well as donations from others, for the stated purpose of distributing the funds to charitable causes. Trump's children Ivanka, Eric, and Donald Jr. served on the board, which did not meet after 1999. Trump stopped contributing to the foundation in 2008, but continued to solicit donations.
The foundation's activities came under scrutiny during the 2016 presidential election campaign, initially by The Washington Post's David Fahrenthold. Law enforcement investigators subsequently discovered various ethical and legal violations, including failure to register in New York, self-dealing and illegal campaign contributions. In December 2016, Trump tried to dissolve the foundation, but the New York State Attorney General's office blocked dissolution pending completion of its investigations. Trump served as its president until January 2017, three days after his inauguration as U.S. president.
On June 14, 2018, New York attorney general Barbara Underwood filed a civil suit against the foundation, Trump himself, and Trump's adult children—Ivanka, Eric and Donald Jr.—alleging "a shocking pattern of illegality" with respect to the foundation's money. On December 18, 2018, Underwood announced that the foundation had agreed to shut down under court supervision and distribute its remaining assets to court-approved charities, although she did not end investigations of the foundation and its directors. In November 2019, Trump admitted to using the foundation for his business and political purposes and was ordered to pay $2million as restitution. Additionally, Trump was required to reimburse $11,525 to the foundation, which was added to $1,797,598.30 already in the foundation's bank account. The money as well as the funds in the foundation's bank were paid to eight charities in December 2019.
The winding down of the foundation and the settlement did not end investigations of the foundation and its directors nor resolve any other potential prosecutions of Trump and others arising from the dealings by or through the foundation. On February 22, 2021, the Supreme Court in Trump v. Vance rejected any further delay in the production of Trump's tax records by Trump's accountants Mazars, under an August 2019 subpoena. Mazars handed over to Vance millions of pages of documents containing Trump's tax returns from January 2011 to August 2019, as well as financial statements, engagement agreements, documents relating to the preparation and review of tax returns, and work papers and communications related to the tax returns.
Overview Stated purpose and structure Donald Trump formed the Donald J. Trump Foundation in 1988 as a private foundation. Its initial stated purpose was to distribute proceeds from Trump's book,Trump: The Art of the Deal, to charitable causes. Like many other private foundations, the Trump Foundation conducted no charitable programs of its own, instead granting money to other tax-exempt organizations.
The foundation was based at the Trump Organization in New York City and had no paid staff or dedicated office space. Donald Trump was its president until January 2017, three days after his inauguration as U.S. president. Trump's three adult children – Ivanka Trump, Eric Trump and Donald Trump Jr. – were all listed as on the board of directors, as was the Trump Organization's treasurer/CFO Allen Weisselberg. In 2017, Weisselberg claimed in a deposition to New York State investigators that he wasn't aware he was a board member "at least for the last 10 or 15 years". According to the New York attorney general, the board had not met after 1999. In 2015, a Trump Organization spokesperson told the New York Post that Trump made all decisions regarding the granting of the foundation's money. According to the foundation's IRS Form 990 filing for 2013, in making grants the directors were not subject to any "restrictions or limitations on awards such as by geographical areas, charitable fields, kinds of institutions, or other factors".
Sources of funds Until 2015, Trump contributed $5.5million to the Trump Foundation, including money from his book, while outside donors contributed an additional $9.3million. From 1987 to 2006, Trump gave his foundation $5.4 million which had been spent by the end of 2006. After donating a total of $65,000 in 2007–2008, he stopped donating any personal funds to the charity. His final payment to the foundation was $35,000 in 2008.
Many of the outside donors to the foundation have done business with Trump or the Trump Organization. Several philanthropy experts said having a family foundation primarily funded by outside money is unusual.
The top donors to the foundation from 2004 to 2014 were Vince and Linda McMahon of World Wrestling Entertainment (WWE), or WWE itself. $5million was donated to the foundation after Trump appeared at WrestleMania in 2007 and 2009., September 13, 2016 PBS NewsHour The donations were reported by the Trump Foundation as coming from the WWE, but the WWE has claimed money came from Vince and Linda McMahon personally. Later, when Linda McMahon was running for U.S. Senate in Connecticut, the McMahons claimed the funds came from Vince only. Some have alleged that the money was paid as compensation to Trump and therefore should have been subject to payroll taxes.
Trump solicited donations in lieu of payment for other services as well. In 2005 Norwegian Cruise Line donated $100,000 in lieu of an appearance fee for Melania Trump. In 2006, People magazine donated $150,000 for an exclusive right to publish baby photos of Barron Trump. In 2011 Comedy Central donated $400,000 for Trump's appearance in a broadcast comedy roast of himself.
Dissolution In September 2016 the New York attorney general's office, which administers the state's Charities Bureau, announced it was investigating the Trump Foundation based on its failure to file required forms with the bureau. One week later the office issued a "Notice of Violation".
In December 2016, one month before his inauguration, then president-elect Trump announced that he would dissolve the Trump Foundation to avoid "even the appearance of any conflict with [his] role as President". However, the office of the New York State Attorney General Eric Schneiderman blocked the dissolution, saying the foundation "cannot legally dissolve" until its current investigation is completed.
In June 2018 the same office filed a civil suit against the Trump Foundation and its board members, ordering (among other requirements) that it be shut down and that restitution be made by its board members. The office also referred information on possible legal violations to the FEC and the IRS. The following month, the New York State governor's chief counsel announced that Governor Andrew Cuomo was ready to provide the state's attorney general's office with the requisite criminal referral in the matter for possible criminal prosecution under state law. In December of that year, the foundation signed a stipulation agreement to dissolve, with its assets going only to charities approved by the attorney general's office. Soon after, Attorney General Underwood announced that the foundation had agreed to shut down under court supervision and distribute its remaining assets to court-approved charities, although she did not end investigations of the foundation and its directors.
Investigations by The Washington Post and others During the 2016 U.S. presidential election, David Fahrenthold of The Washington Post began looking into Trump's history of charitable giving. In January 2016, Trump held a fundraiser for veterans' causes in lieu of appearing at a televised Republican debate. He claimed that the event raised $6million, including $1 million of his own money. Fahrenthold began his investigation by attempting to verify the receipt and disbursal of the $6million. All donations were supposed to have gone into the Trump Foundation and then granted by the foundation to others. Fahrenthold determined instead that, several months after the rally, the Trump Foundation had yet to disburse funds to any veteran-related charities. Although some of the funds went directly to causes without passing through the Trump Foundation, Fahrenthold widened his investigation into a larger investigation into Trump's history of charitable giving. In the November 2019 settlement ordering Trump to pay $2million in damages, he acknowledged that the veterans' fundraiser had been a campaign event and that his campaign had been given full control of the raised funds.
In June 2016, in response to criticism, Trump asserted publicly that he had given about $102million to charitable causes from 2009 through 2015 and released a 93-page list of more than 4,800 donations. Just under $90million of the total was in the form of conservation easements on Trump properties or land donations to the State of New York; the list also contained more than 2,900 donations of free rounds of golf. Further investigations led to an increasing list of allegations of abuse inside the foundation since its creation.
Fahrenthold's investigation into the Trump Foundation and Trump's history of personal charitable giving involved hundreds of calls to charities associated with Donald Trump; it was also notable in that he drew heavily on support and investigative help from a large number of his Twitter followers who helped him track down leads on specific charities.
Fahrenthold received the 2017 Pulitzer Prize for National Reporting for his investigations into the Trump Foundation.
Legal and ethical controversies
Accusations against Trump and his foundation include the following:
Failure to maintain proper governance In a June 2018 petition filed by the office of the New York attorney general, it was explained that:
In an exhibit attached to the filing, Trump Foundation treasurer Allen Weisselberg claimed he had not been aware that he was the treasurer or on the board of the foundation until he was approached by investigators.
Solicitation of donations without a license
Under New York State law, a not-for-profit foundation must register as a "7A Charitable Organization" if it plans to solicit outside donations over $25,000 in any year. The Trump Foundation was initially registered as a private foundation set up solely to receive his own personal donations. As long as it was private and did not solicit outside funds, it did not have to file annual audited reports with the New York State Charities Bureau. However, records show that Trump began soliciting donations at least as early as 2004 and possibly as early as 1989.
Mishandling of funds raised for veterans' causes In April 2016, Fox News reported that more than two months after Trump said he had raised $6million for military veterans at a pre-Iowa caucus fundraiser, "most of the organizations targeted to receive the money have gotten less than half of that amount". Around that time, Trump also said he had contributed $1,000,000 of his personal funds. In late May, Trump revised his figures downward, saying $5.6million had been raised at the event and that he had contributed his one million only the previous week, after the media criticized him. He also provided a list of the beneficiaries of the $5.6million, although the full amount is disputed in a lawsuit filed by New York State in 2018, which cites an amount of $2.8million.
Coordinating foundation grants with Trump's presidential campaign