Shady Nonprofits

By Randall McGee

Organizations are historically not very charitable. Most organizations and corporations are out for a profit, either for their members or the company itself. However, the IRS created a classification for organizations that makes them exempt from income tax or any money earned through donations or fundraising. This is one way the government supports the community; through nonprofit organizations. Unfortunately, many nonprofits are used for shady individuals to make millions of dollars and not get taxed.

As great as it would be if everyone was a good person, many are not. This is apparent in all things, but shockingly so in the world of business. Since nonprofits were created by the IRS, people have been using them to gather money that isn’t taxed and using it primarily for financial gain. There are thousands of cases of this, many of which have the same story. Some rich entrepreneur decides to make a company that isn’t taxed, and that makes large amounts of money from donations or fundraisers. This money would then get lost in the company’s complex finances, where it is easily taken by the founder or given to other higher ups in the organization.

To be clear, salaries are allowed in nonprofit organizations. However, the salaries are supposed to be minimal, and salaries don’t tend to make people the millions that they want. What often happens is that the nonprofit will hide finances from its sponsors in order to steal millions while looking like it is donating most of its funds to charity or whatever the nonprofit chose to improve within society. This means millions of dollars that should be going to charities or bettering society instead go to greedy businessmen to spend on whatever they want.

The money isn’t always simply taken by the founders of the nonprofit. Far more complex and shady money trails lead back to politicians and political campaigns. Nonprofits are allowed to do two things that create many loopholes, they are allowed to donate to political campaigns to better their purpose, and they are allowed to donate to other nonprofits or charities. Using this, many large nonprofits can simply donate to smaller, less known charities, which can then fund campaigns and politicians at will. This means millions of dollars can be put into a campaign, with no clue as to who is putting the money in. This shady scheme could mean foreign hands in U.S. politics, which would be a serious problem. More likely it means very shady businesses are finding a way to quietly fund politicians to do what they want.

This shady cycle doesn’t end with politicians you’ve never heard of and nonprofits that don’t matter, however. One of the shadiest of the nonprofit business is also the most powerful politician in the government; President Donald J. Trump.

If you didn’t know, Donald Trump has a nonprofit organization, named the Donald J. Trump Foundation. This foundation is mixed up in all kinds of bad stuff, including funding Trump’s campaign, diverting funds to settle disputes involving his company, failing to disperse funds to charities, and claiming credit to funds donated by other charities for his own. All of this points to a very shady trail of money from his nonprofit to his campaign to his pocket. Apparently throughout the duration of his campaign, he charged the Trump campaign $11 million for expenses involving his jets and other resources. If that isn’t shady enough, it gets better.

Trump’s son also made a nonprofit organization, the Eric Trump Foundation. This foundation was actually started as a very legitimate business. It used an annual golf tournament in order to donate millions to a children’s hospital; St. Jude. It started off great, Eric used his father's golf course free of charge, and had the golfers pay thousands in order to play in the tournament. This raised about $2 million a year, the vast majority of which was donated to charity. Several years later, however, Donald began charging Eric for these fundraisers. It was reasonable at first, about $100K each time. Then the cost began to rise, first to the 200,000s, the the 300,000s, and finally to half a million dollars. Experts on the subject were baffled by this, as this cost was outrageous, and there was no possible way it could be justified. It was clear at this time that the Eric Trump Foundation had changed; the leadership had been almost completely changed out, mostly to rich individuals with ties to the Trump corporation, one even being Trump’s lawyer. After the change in leadership, the foundation’s actions got significantly shadier, until Eric Trump disbanded it, and it was rebranded into a different foundation.

While there are many legitimate nonprofit organizations, there are also many shady and fraudulent ones as well. It is simply important to realize that this happens, and that the leader of our country not only supports it, but is deeply involved in it as well.