The lawsuit brought by last month by the New York State Attorney General against Donald Trump, two of his children and the Trump Foundation is one of the most significant legal actions taken against a private foundation in years. Certainly, it's the most high-profile such action.
Yet while this case has generated enormous media attention, there's been very little detailed, nuanced discussion of the actual claims made in the New York AG's 41-page petition to the Supreme Court of the State of New York. That document uses strong language to depict the Trump Foundation as a deeply corrupt entity.
For more than a decade, the Donald J. Trump Foundation has operated in persistent violation of state and federal law governing New York State charities. This pattern of illegal conduct by the Foundation and its board members includes improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations or to implement even elementary corporate formalities required by law.
All this sure sounds bad, and Trump's critics have seized on the suit as further evidence of the President's corrupt nature. His defenders, meanwhile, depict the AG's charges as a politically motivated attack.
But the people who should be paying the most attention to this case are those individuals and families who have private foundations, along with board directors, staff and advisers to such entities. That is a main takeaway of five blog posts that Frank Monti has written for Inside Philanthropy digging into the lawsuit, which appear below and spotlight the many ways that foundations can get in trouble with regulators.
Monti is a CPA specializing in nonprofits who has been writing IP's Gift Adviser blog for the past few years. His posts often focus on the surprisingly complex legal issues surrounding charitable gifts and nonprofits. The Trump Foundation lawsuit offers an unusual opportunity to explore some of the key rules around private foundations—and how easy it can be for donors to run afoul of these rules.
Start with the oldest posts at the bottom and read up.