Charity Watch and Clinton Foundation
It’s a numbers game.
As I noted previously, legitimate charities do not have to tout charity ratings, especially not constantly. Charity Watch, aka “The American Institute of Philanthropy” reported revenue of $532,667 in 2014, with 7 employees and 12 volunteers. The founder, Daniel Borochoff, is busy with constant television interviews, making increasingly florid claims about the Clinton Foundation. Charity Watch’s form 990 states it distributes approximately 19,000 copies of a print publication rating charities and operates its website “charitywatch.org.” If Hillary Clinton does not win the presidency, Mr. Borochoff’s already modest budget and operation is certainly destined for the same fate as one third of America’s legitimate charitable organizations over the past decade. Out of business.
So the water thing?
I previously noticed Clinton Foundation making clean water claims and thought “fuuu, it’s lucky they completed the Clinton Library in Little Rock, they are so cheap and do so little” — there is no way they have accomplished anything regarding clean water and most certainly would not have spent a nickel on that.
So, see this tweet? 27 million people have “access to clean water”.
That would be this. P & G claims 8 billion liters of clean water distributed to nearly a billion people in 75 countries over the program’s history.
What is the Clinton connection? P & G paid to attend the 2013 Clinton Global Initiative event, and likely paid for these global charitable rockstars, America’s favorite dad & daughter team, to visit Rwanda and pose with a glass of water.
I can’t make this stuff up.
World Vision is the largest real charitable organization that distributes Proctor & Gamble water purifying packets, along with 150 others. Look at the picture. The only money involved regarding the Clinton Foundation and the commercial branding effort: “P&G Children’s Safe Drinking Water (CSDW) Program” is paid to them.
So yeah. It’s kind of mean to do this to a one-man show that appears to be run out of its founder/CEO’s house in Chicago. I don’t have too many more ideas as to why a nonprofit whose director appears on television touting $330 million a year charities, would file its tax forms using with a PO Box address. I do notice “rent deposits” and rental expenses on their 990s which, if so, means it would be a “home-based business.”
Charity Watch is a DBA. Its official incorporated name is “American Institute of Philanthropy.”
Mr. Kresin died in 2005 necessitating his replacement. In 2006, the 5th man on the board is noted as Craig Beasley. He and Clint Berry served concurrently in 2009. The others show no change over the 14 year period.
Borochoff’s LinkedIn profile shows that he served on FASB task forces for nonprofit accounting. So he should be aware that any organization with a board that has only changed one member or officer in over a decade is one which is likely not actively managed.
So who are these guys?
An auditor for JP Morgan? Really? Sheesh.
Pepsi, absolutely. They are right in there bringing a full range of soft drink choices to America’s schools with Bill Clinton, Mike Huckabee, and the Alliance for a Healthier Generation.
I wonder if Newbill, Esq. is with Coke if the other guy is with Pepsi?
Naaaah. He is (or was) an attorney for the Social Security Administration from Texas.
I will simply note that AIP/Charity Watch’s revenues increased by about 50% in 14 years covered by the tax returns I reviewed. Mr. Borochoff’s salary increased by 100% during that same time period while subscriptions to the organization’s publication decreased by about 50%.
Now, as to the much-quoted Charity Watch analysis system, the only thing it is good for is discovering charity scammers who use for-pay fundraising telemarketers and are stupid enough to disclose that on their tax returns. That’s it. This guy just makes relational comparisons between different line items on charitable tax returns. The government doesn’t give any guidelines as to what should be reported as “administrative expenses” or “program expenses.” That is up to the organization and their auditors.
In a healthy nonprofit, these decisions are important tools.
When you are like the Clinton Foundation, you can, and do, put down any numbers you like on any line item of your tax return. Any analysis based on that is meaningless.
Not a problem. All of our Presidents need and deserve a Library.
So here’s the thing. This is how much money EIN 31–1580204 got in 2014 according to their tax return. And, there has been no amendment to the “primary exempt purpose” in the meantime. This is what it says right now.
Here is how many grants paid outside the United States and where.
As many, many spokespeople have repeated on countless television shows, and in newspapers, and even Mr. Borochoff, the Charity Watch professional, this organization is an operating public charity and pays its own staff to do its incredible life-saving work around the globe. I understand now, this even includes finding a cure for AIDS.
Let’s just look at their 2014 Schedule A so we can see the funds available over a five year period:
So, it’s easy to be seen, there are very limited funds of only a little more than $567 million available to save millions of lives around the world.
So here is some detail.
Three employees for “climate & economic development” in all of Central America and the Caribbean? This would include Haiti, I believe.
Now these schedules do add up to the big schedule. I divide $23.6 million into $172.6 million and get .13 = 13%!
I subtract $23.6 million from $172.6 million and get $149 million.
This tax return already notes $2 million loss on “program related investments” (and I am aware of the Fondo Accesso hedge fund in Colombia). It also notes contributions of $91.6 million to its Endowment, a fund that is listed as 99% permanently restricted.
That leaves me with $55.4 million to mess around with. I’m going to fry off another $3.5 million for these essential US based executives (key employees — this list doesn’t include Bruce Lindsay & Eric Braverman whose joint salaries total almost $1 million). With their benefits included I am down to about $50 million.
About 10% of the remaining $50 million is “other employee benefits.” I have not yet deducted the $7.8 million for “travel” that is noted. But I will do so. I am now down to about $38 million. They depreciate $5.3 million off of that and I will too. We are down to $33 million.
I’ll just put an organization’s program schedule here for comparison. It’s an international aid charity incorporated in 1986 called World Vision.
Now, World Vision does not maintain offices in other parts of the world. They fly in and do the work directly or pay for supplies and goods. They reported 1,276 employees and over 120,000 volunteers on their 2014 tax return.
I only included World Vision because they happen to be the primary purchasers and physical distributors of the Proctor & Gamble clean water chemical packs referenced above and they have bought and given away over 1 BILLION of the packages. Even if I go by what our amazing, most-qualified candidate ever just said this morning, that means Clinton Foundation had done .02% of what World Vision has with these water packets. I could do the same with any actual international aid charity.
Clinton Foundation? Our esteemed former President and his daughter accepted an unknown fee from P & G to show up in Rwanda and drink water out of plastic cups.
It’s too late to change the tax returns, and yes, I think they were conformed, probably on the advice of Mr. Borochoff, founder and CEO of the American Institute of Philanthropy. To fit, you know, like, his formula.
Yes, the Tampa Bay Times reporters did much better than Borochoff ever has of identifying scammy charities. One of the things I found most interesting in their report about the 50 worst charities was that they found a “family connection,” with one of the worst offenders spinning off half a dozen cancer-related corporations that paid money to the pockets of relatives, and nothing to cancer victims.
And of course, none of them would talk to reporters. Never heard of that before! I wonder why they wouldn’t?
Bonus takeaway: I noticed on my first review of a Clinton Foundation tax return that there was a loss on UBIT (unrelated business income). I naively thought that must refer to some type of loss at the gift shop at the Presidential library. Then I thought cynically, I bet they never declare any UBIT and have never paid any taxes. It is line 7a on page 1 of the form 990. Thirteen out of the fourteen tax returns I reviewed, I was correct. If they declare a loss of even $1, they pay no business taxes.
And a final note — many people in Africa have said “stop giving us aid” because it is destroying their countries. There are ethical concerns in every type of nonprofit or charitable venture. Organizations like Borochoff’s that make numerical or relational comparisons off tax returns cannot be relied upon to truly “evaluate” a charity. As noted above, many do question World Vision; others swear by them. What is known is, they are an operating organization that does do work internationally. And by now it should be clear: the Clinton Foundation is not, and does not.
Update 1 September 2016: a Clinton Campaign-written article is being circulated by the AP and some AP newspapers that the formerly respected charity evaluator Charity Navigator has now “impartially” given the Clinton Foundation a 4 Star rating. Charity Navigator itself is using a system very similar to Charity Watchdog and violated its own rules and procedures to change the ruling based on no new information (but likely plenty of new or recent pressure). Only helpful to extreme Clinton partisans and sadly: unhelpful to Charity Navigator or those seeking reliable information to make their charitable donations.
