For a moment there, Donald Trump and his Trump Foundation seemed like it would be the story of the campaign. Whether it was the potentially quid-pro-quo donation to Florida Attorney General Pam Bondi, the use of the foundation’s funds to resolve Trump’s legal disputes or the hilarious purchase of a six-foot-high portrait of Trump himself — never has something as bureaucratic and dull as nonprofit tax law been so central to the course of American democracy.
Of course, Trump would continue to outdo himself in self-sabotage with the whole “pussy-gate” fiasco, burying the Trump Foundation scandals beneath the mountain of misogyny and sexism that has typified the end of the 2016 presidential campaign. However, what angered me about the Trump Foundation story wasn’t that he used it as an illegal slush fund, but rather how easy it was for him to pull off this ruse for so long — and how meager are the mechanisms with which we can hold him accountable.
Trump’s “playboy philanthropy” is not particularly rare.
The Urban Institute notes that the reported total assets of the nonprofit sector was $5.17 trillion in 2013. Compare this to the total benchmarked assets of the S&P 500 in 2016: $7.8 trillion. Consider the level of scrutiny, monitoring tools and law-enforcement resources devoted to preventing illegal use of funds in the for-profit sector. There are entire federal agencies devoted to securities fraud. While I’m sure questionable charities are occasionally swept up in the investigations of such agencies, it’s definitely not their primary focus. While the prospect of increased scrutiny and oversight of charitable dollars is unlikely to be a popular position in the nonprofit, tax-exempt field, we must come to the terms with the fact that there is still too often a lack of transparency and effective accountability — and enforcement measures. There is still a fertile breeding ground for more Trump Foundations to get away with who knows what.
And the reason for this is pretty simple: our system of philanthropy, as designed, is not optimized for accountability or truly ensuring public benefit. The Trump Foundation scandal further proves that our system prioritizes the will of the wealthy, especially the ultra-wealthy, over the needs and benefit of the public. The Trump Foundation got into trouble because Trump was uniquely terrible, perhaps intentionally, at keeping up the facade of philanthropic altruism. Why did it take a presidential campaign for the jaw-dropping revelations about the Trump Foundation to come to light?
Trump’s “playboy philanthropy,” as we might call it, is not particularly rare. While the largest and most visible American foundations often utilize self-imposed protocols, beyond laws and statutes, for greater public accountability or at least transparency, most money in the philanthropic sector is held in private, family-run foundations, which are apparently less disposed to meeting the highest ethical standards.
Most foundations receive scant oversight from the IRS.
Increased transparency and accountability, among foundations specifically and the nonprofit field more broadly, is a necessary hedge against the soft power wielded by the wealthy and their gatekeepers. If we are serious about trying to fix the equity problems in the arts and culture sector, we must have tools, at the very least, to easily track the spending of the funding community. We should remember that while Trump’s charity misdeeds are troubling to the point of hilarity, it is just the tip of the iceberg in terms of unaccountable dark money sullying American philanthropy.