This is something I never thought I would say - I have something in common with Donald Trump. We both have started non-profit foundations. Mine is a public non-profit and his is a private foundation, but we are in it to help a cause or causes, right? For me it is the case, but after reading an article from the Washington Post about the Trump Foundation's dealings, I believe the similarity is a tenuous one.
I am currently very angry with the news about the Foundation. It has to do with following the rules which are set up by the IRS and the government to ensure that money which is earmarked for charity is properly used, not for the people who run the charity's self-interest.
As a public foundation, the charity I founded, just like others who are 501 c-3's, spend a considerable amount of time and money to obtain our status and to keep our status. Every year, we need to file a federal tax return called a 990, as well as documents with the state. The more we grow our budget and revenue, the more documents we need to file. I am fortunate to have accounting help which keeps the costs for maintaining records and filing these documents down to a reasonable number. But, every dollar spent on administrative costs is a dollar not spent on delivering our programs.
Besides keeping our financial house in order, we spend time discussing and understanding the rules for staying within the laws that were set up to prevent fraud. We need to stay within our mission, we need to have a review or audit of our records in order to maintain our non-profit status. Again, this is time that could be spent on solving the problem that necessitates our having a non-profit in the first place.
I may not be jumping for joy to do these tasks, but I know it allows people, foundations and corporations who donate money to us, to know that we are above board and transparent with how we are using their money.
Private foundations, like the one Trump founded, are regulated as well. One of the reasons they have rules is to prevent something called "self dealing". Self dealing is a term meaning that you are using your foundation to your benefit, not the causes you claim to serve. The government wanted to make sure wealthy people did not start these foundations as a way to shelter money from the government.
The Post article, which you can read here, as well as this other article from Talking Points Memo, which goes into further depth, shows how Trump used his foundation for personal gain. He used donated money to pay for his businesses' legal expenses and for two portraits of himself to be painted. The sum total of these projects are more than my current budget.
So I am a bit hot under the collar about this subject.
Let me lay out what I could do with this money ov if the foundation had actually donated it to a charity. (And if you have a charity, just take out my numbers and descriptions and put your own in. You will see my point.)
This is my budget for 2015-16
Salaries and benefits $125K
Programming costs $70K
Insurance $3K
Marketing $23K
Professional services $3
Travel $2K
Office supplies $2K
As a public foundation, the charity I founded, just like others who are 501 c-3's, spend a considerable amount of time and money to obtain our status and to keep our status. Every year, we need to file a federal tax return called a 990, as well as documents with the state. The more we grow our budget and revenue, the more documents we need to file. I am fortunate to have accounting help which keeps the costs for maintaining records and filing these documents down to a reasonable number. But, every dollar spent on administrative costs is a dollar not spent on delivering our programs.
Besides keeping our financial house in order, we spend time discussing and understanding the rules for staying within the laws that were set up to prevent fraud. We need to stay within our mission, we need to have a review or audit of our records in order to maintain our non-profit status. Again, this is time that could be spent on solving the problem that necessitates our having a non-profit in the first place.
I may not be jumping for joy to do these tasks, but I know it allows people, foundations and corporations who donate money to us, to know that we are above board and transparent with how we are using their money.
Private foundations, like the one Trump founded, are regulated as well. One of the reasons they have rules is to prevent something called "self dealing". Self dealing is a term meaning that you are using your foundation to your benefit, not the causes you claim to serve. The government wanted to make sure wealthy people did not start these foundations as a way to shelter money from the government.
The Post article, which you can read here, as well as this other article from Talking Points Memo, which goes into further depth, shows how Trump used his foundation for personal gain. He used donated money to pay for his businesses' legal expenses and for two portraits of himself to be painted. The sum total of these projects are more than my current budget.
So I am a bit hot under the collar about this subject.
Let me lay out what I could do with this money ov if the foundation had actually donated it to a charity. (And if you have a charity, just take out my numbers and descriptions and put your own in. You will see my point.)
This is my budget for 2015-16
Salaries and benefits $125K
Programming costs $70K
Insurance $3K
Marketing $23K
Professional services $3
Travel $2K
Office supplies $2K
Total=$228K
I do not take a salary or receive other compensation for the work I do with my non-profit. I do this work, as do the staff (who should get paid more) and our volunteers, because we are passionate about creating a change. We are growing quickly now and every week, I ask my staff and myself and my volunteers to do more and more because of the need. We make choices of what we can and can’t do because we have limited funds. We understand that this is the life of a non-profit.
So I am angry. Because there are so many of us who spend the time and the energy on changing our little piece of the world, when you find a person who has such disregard for what we do and how we conduct ourselves, it makes me angry. When this person only seems to cares only about how he can serve himself and not others as he is supposed to, it makes me angry.
But, even though he and his staff have no regard for the laws and the rules that govern non-profits, I do. I will continue to do this because having the trust of public is very important to me and to my staff. Mr. Trump may think I am not smart, but I believe my actions speak louder than his words.
Addendum - Since I started this post, there is an update. The Trump Foundation did not file the proper paperwork in the State of New York to start the foundation. They have been given a cease and desist order. They have until mid-October to rectify this matter.