Less than a 12.3% expense ratio

Eric Trump was on Sean Hannity on the Fox News Channel (you remember, the "news" network that let a story continue to run for almost a week after it had been proven false) saying that those who oppose his father's administration "...aren't even people."

Coincidentally, Forbes Magazine reported that the Eric Trump foundation "...shifted kids-cancer funds into the Trump Organization."

A writer named Glenn Fleishman took to Twitter and tweeted "I steal from kids with cancer" in response to Eric Trump's tweet about how he was looking forward to appearing on Hannity.  Eric's response was:

"I have raised $16.3 million dollars for terminally ill children @StJude with a less than 12.3% expense ratio.  What have you done today?!"

That may well be true for the period from 2007 to 2015 (the last year for which Eric Trump's foundation has filed tax returns).  But it isn't true for 2014.  According to the Form 990 the foundation filed with the IRS, their golf fundraiser in 2014 had gross receipts of $1,774,011 of which $1,531.717 was contributions.  The expenses involved were $242,294.  Then the charity gave out $1,428,575 in grants.

Let's do some math.  $242,294 is 13.7% of the $1,774,011 raised.  Not a big difference per se.  Until we look at the fact that the foundation spent $242,294 to raise funds, gave out grants of $1,428,575 and put $99,644 into their coffers.  If we look at the ratio of expenses to grants, that percentage rises to 16.9%.  But wait, there's more.

Now let's take a look at the 2014 Eric Trump Foundation Golf Brochure.  On page 3 of the brochure the following language is found:

"ETF is dedicated to improving the lives of children battling life-threatening or debilitating medical conditions at St. Jude Children’s Research Hospital. Through direct personal involvement and financial assistance, we strive to enhance the physical, emotional and social well-being of children and families in need. A not-for-profit organization, our foundation was created to transform donations into miracles."

If someone were to choose to pony up $25,000 for this event, they would assume that all of that money, less of course the expenses, would go to St. Jude's Children's Research Hospital, right?  Would you think some of your money would be going to any of the following instead?

Chai Lifelines - $10,000
Harboring Hearts - $6,250
Intrepid Fallen Heroes - $10,000
Joe Torre Safe at Home - $10,000
Little Baby Face Foundation - $10,000
Lubavitch Youth Foundation - $10,000
Nephcure Foundation - $30,000
North Shore Animal League - $10,000
Paws Place - $55,000
Staten Island Zoological Society - $37,000
Tivka Children's Homes - $15,000

When we deduct these grants and come up with the amount raised that actually went to St. Jude's Children's Research Hospital, we get a total of $1,225,325 raised for the specified charity.  Now if we divide that into the amount of expenses incurred, that expense ratio goes up to 19.7%.  If you're going to raise money for your pet charities under the guise of raising it for one, then I believe that grants made to those pet projects should be booked as expenses and not as grants.

If I use my metholdology and put this into the language of Charity Navigator, one of the leading "watchdog" monitors of charities, this means that 80.3% of funds raised by the Eric Trump Foundation go to program expenses.  Let's compare that to some other well-known charities.

American Red Cross - 90.1%
The Clinton Foundation - 86.9%
Elizabeth Glaser Pediatric AIDS Foundation - 88.5%
United Negro College Fund - 87.1%
Wounded Warrior Project - 75.1%

But the numbers can be misleading.  All five of these not for profit organizations have administrative expenses which include salaries and benefits for paid employees.  The Eric Trump Foundation did not have any paid employees until 2015.

The main point however is that both the Eric Trump Foundation and the Donald J. Trump Foundation have been alleged to have engaged in self-dealing, prohibited by IRS regulations.  In fact, the most recent IRS filing by the Donald J. Trump Foundation admitted to self-dealing, as reported by the Washington Post last November.  Is anyone investigating these allegations?  Probably not.