The further to the left or the right you move, the more your lens on life distorts.

Saturday, November 05, 2016

Form 990

After the news that the FBI has launched a criminal investigation into the inner workings of The Clinton Foundation (TCF), Hillary's political allies have mounted a full fledged defense of the "good works" accomplished by TCF. They have repeated Hillary's assertion that "90% of TCF revenues go to 'good works.' "

I decided to investigate and downloaded the entire Clinton Foundation 2014 IRS Form 990 (65 pages), the most current year that is publicly available.  The front page screen cap follows:

Based on their own tax return, TCF allocated "grants and other assistance" in the following amounts delineated on page 10 of the tax return:
$4,175,833 for domestic programs
$   984,552 for foreign programs

This is summarized on p. 1, line 8 of the return in the amount of $5,160,385. As far as I can tell, the amount shown on line 8, “Contributions and Grants” indicates all of the monies spent by TCF on 'charitable works,' although I suppose it’s possible I'm misinterpreting the data.  On page 1, line 12, 2014 gross revenue for TCF is shown as $177,804,612. 

Therefore, charitable works represent about 3% —not 90 percent— of gross revenue for 2014. 

As an aside, salaries and other compensation (p. 1, line 15) for TCF employees represent about 16.8% of total revenue, “other expenses” (see page 10) accounts for 25.4% of total revenue. "Travel expenses" for 2014 exceeded the amount dedicated to "grants and other assistance.” 

It appears that $86 million (p.1, line 19) has been retained and not distributed in grants and other assistance. In addition, total net assets of $332 million (p. 1, line 22) have been retained year over year by TCF and has not been distributed to charitable works. 

I want to emphasize that these numbers were reported to the IRS by TCF itself.

So, a few questions that we might consider:

1.  Does the amount for "grants and other assistance” (3% of all monies raised) represent an acceptable percentage of giving against gross revenue for a charity?
2.  Why are expenses so high (42% of gross revenue) given how little of the revenue was actually transferred to “contributions and grants”?
3.  Given that the mission statement of TCF states: IMPROVE GLOBAL HEALTH & WELLNESS,INCREASE OPPORTUNITY FOR WOMEN/GIRLS, REDUCE CHILDHOOD, OBESITY,CREATE ECONOMIC OPP &GROWTH AND HELP COMMUNITIES ADDRESS EFFECTS OF CLIMATE CHANGE, why retain 48 percent of revenue (in 2014) when the needs within these target programs are so pressing? 
4. For that matter, why retain $332 million rather than distributing it to global health and wellness or increasing opportunity for women/girls, or any of the other mission critical charitable targets defined by TCF?

There may be reasonable explanations for the questions that I ask, but on the surface, I think there is cause for concern. I suspect that’s why the FBI has launched an investigation into the inner workings of TCF. We’ll all see what happens down the road.


Sarah Westwood writes:
A third-party review of the Clinton Foundation found the charity operated "more like a political operation" than a philanthropy in Nov. 2011 — just a few months before the end of Hillary Clinton's tenure as secretary of state.

The revelation was included in a "confidential" memo prepared by Kumiki Gibson, then a lawyer at Williams & Connolly, the firm that has represented Clinton throughout her email controversy. That memo was published Saturday by WikiLeaks, along with hundreds of other emails taken from the inbox of Clinton campaign chair John Podesta.

"The Foundation (as opposed to its initiatives, which I have not reviewed) operates more like a political operation focused on immediate situations, tasks, and events, as opposed to a professional, strategic, and sustainable corporation committed to advancing its overall mission," the review stated ...

"The challenges and deficiencies plaguing the Foundation cannot be over-stated: They are real and undermine the organization's effectiveness, immediately and more long term," Gibson wrote in the memo.

Among those problems, the memo cited "very little, if any, accountability" as well as the time and money wasted on efforts unrelated to the foundation.
Here's an interesting question ... with $332 million in the bank and unspent on "charitable works" what happens when Hillary Clinton is elected president? Will some third party be asked to allocate the money? Will Chelsea? And to whom or what will $332 million be allocated? Will there be a political component or a Friends of Hillary component to any reward?

My gosh ... the questions just go on and on. Isn't corruption a wonderful thing?