The Clinton Foundation is back in the spotlight, with Donald Trump charging this month that the “Russians, the Saudis, the Chinese all gave money to Bill and Hillary and got favorable treatment in return." A range of other critics have piled on, including the Capital Research Center, which calls the foundation a “cauldron of conflict and cronyism.”
There are lots of good reasons for digging into the Clinton Foundation right now. But one question that gets surprisingly little attention is the most basic: What does this place actually do?
As far as I can see, most people—including in nonprofits, politics and the media—know little about how the Clinton Foundation operates. That’s understandable, since the foundation ranks as one of the more complex nonprofits around. Yet grasping the mechanics of this place is a precondition for unraveling the controversies around it, relating to its effectiveness and possible conflicts of interest. I’ll get into those controversies in later posts. Here, I focus on the foundation’s mechanics.
The Clinton Foundation is best understood as an umbrella entity that is carrying out several very different missions. It’s a lot like the Carter Center in key respects, but more complex. Let’s walk through each of its core missions.
Mission One: Traditional Nonprofit Program Work
One quick way to understand any nonprofit is to look at its budget and see what it’s spending money on. If you look at the Clinton Foundation’s consolidated expenses for 2014, which totaled $249 million, you’ll find that the biggest part of those expenses—57 percent—was for running the Clinton Health Access Initiative, or CHAI. Technically, CHAI is a freestanding nonprofit, and it files its own 990 tax return, but it is still roughly under the Clinton Foundation umbrella. CHAI was started in 2002 to focus on saving the “lives of people with HIV/AIDS in the developing world by dramatically scaling up antiretroviral treatment.” It has since expanded to address other health issues like malaria and maternal health, operating in some 35 countries. The Gates Foundation is CHAI’s biggest funder. It gave it over $60 million last year alone.
Meanwhile, the Clinton Foundation directly runs various programs tackling other problems. The largest of these, dollar-wise, is the Clinton Climate Initiative, which works to prevent deforestation, develop clean energy, and help island nations meet the climate challenge (as we’ve reported). As with CHAI, there’s nothing all that surprising about this effort, which is similar to other nonprofit work in the climate space. The government of Norway, which gives large amounts of money globally to slow deforestation, is among the top funders of CCI.
Continuing down the program list, we find the Clinton Giustra Enterprise Partnership, which focuses on poverty alleviation by supporting “impact entrepreneurs” who are are creating “new enterprises to generate both social impact and financial returns” by addressing market gaps in developing countries. If any of that sounds familiar, it’s because lots of groups are now using these same strategies as impact investing takes off. Again, nothing out of the ordinary, here. (Except the donor to the program, Frank Giustra, a Canadian businessman whose ties to the Clintons have come under scrutiny. More about him in a future post.)
The Clinton Foundation runs a bunch of other programs. I could keep going through them, but you can check out the full list yourself. What you’ll find, by and large, are more activities of the sort that any other nonprofit might be undertaking. And, like other nonprofits, the Clinton Foundation is chasing after grant money from the real foundations that have it, like Gates and Rockefeller, as well as foreign governments, most of which also donate to other major nonprofits.
Mission Two: Convener and Matchmaker
Of course, the other big thing the Clinton Foundation does is bring people together through the Clinton Global Initiative. While this is the best-known part of its work, CGI actually accounted for less than 10 percent of the foundation’s consolidated expenses in 2014.
The Clinton Global Initiative emerged after Bill Clinton had the idea of creating a Davos-type event that focused on global problems. CGI has now been around for over a decade and is itself a bit complicated, with three parts: the annual global convening, CGI America (which focus on U.S. issues), and CGI University, which works to engage college to engage the next generation of leaders on college campuses around the world.
You can dig into all the details on CGI here, if you want. But the best way to understand CGI is that it’s a glitzy membership operation that fosters partnerships to tackle various problems. Members come together at the meetings, and make commitments to engage in projects—often involving tens of millions of dollars in pledges.
One thing that confuses people about CGI is that none of the pledged money runs through this organization. As the foundation describes it, “Rather than directly implementing projects, CGI facilitates action by helping members connect, collaborate, and make effective and measurable Commitments to Action.” Often, though, you’ll hear pledges made at CGI described as outright donations to the Clinton Foundation. Even veteran reports seem easily confused by this model, while some critics exploit this confusion to amp up allegations of conflicts of interest.
The other tricky thing about CGI is that it’s hard to know what really happens with commitments made at its meetings, since it’s up to the partners involved to fulfill them and the Clinton Foundation is not directing this work. The effectiveness of CGI is its own complicated can of worms, which I’ll open up in a future post.
Mission Three: Keeper of the Clinton Flame and Presidential Center
The final mission of the Clinton Foundation is to attend to Bill Clinton’s presidential legacy. This work accounts for the third-largest item in the foundation’s annual expenses, over $13 million in 2014, and involves overseeing the Clinton Presidential Center in Arkansas. This institution, too, has several moving parts—including the presidential museum and archives, a school of public service work linked to the University of Arkansas, and some educational programs.
Most people are pretty familiar with what a presidential center does, so I’ll skip further elaboration. The key thing to note, here, is that overseeing the Clinton Presidential Center is quite different than the other missions of the Clinton Foundation, and underscores what a mish-mash this place is.
Okay, so that’s the 101 on what the Clinton Foundation does. One thing you'll notice is that grantmaking is not part of its mission, and that also creates confusion—since many people imagine that foundations are mainly engaged in giving away money.
The foundation is quite an octopus, but not entirely unique in that respect. In fact, the closer you look at the foundation, the more you notice similarities to the Carter Center, which also engages in extensive program work around the world, oversees a presidential museum, and undertakes various other activities. Strikingly, the Carter Center’s expenses in 2014 totaled $243 million; the Clinton Foundation’s expenses the same year were $249 million. The two institutions also share a number of donors, such as the Gates Foundation and certain national governments, including from the Middle East.
None of this basic information about the Clinton Foundation answers the questions now being raised regarding its effectiveness and possible conflicts of interest involving Hillary Clinton. I’ll get into those issues in future posts. But for sure, just understanding how this place operates is a key to figuring out anything else we may want to know about the foundation.