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A good breakdown here. 85% is probably a little high, but whatever the
number is for overhead, it's criminal.

Rush Limbaugh says Clinton Foundation spends just 15 percent on charity, 85
percent on overhead

By Louis Jacobson
<http://www.politifact.com/truth-o-meter/staff/louis-jacobson/> on
Wednesday, April 29th, 2015 at 11:40 a.m.
Democratic presidential hopeful and former Secretary of State Hillary
Clinton addresses the Women in the World Conference on April 23, 2015, in
New York City.

Much of the discussion about the Clinton family foundation has focused on
who donated to it and what they may have expected in return from
then-Secretary of State Hillary Clinton. But critics of the Clintons have
opened up another line of attack on what is formally known as the Bill,
Hillary & Chelsea Clinton Foundation, charging that it doesn’t actually
spend very much on charitable works.

Conservative radio host Rush Limbaugh *aired this line of argument*
<http://www.rushlimbaugh.com/daily/2015/04/23/the_bombardment_of_the_clinton_crime_family_foundation_continues>
on April 23, 2015, citing a report in the *Federalist*, a conservative
publication. Here’s a portion of what Limbaugh said:

*"The Marine Corps-Law Enforcement Foundation -- 99 percent pass-through.
The Clinton Family Foundation pass-through is 15 percent. The Federalist
reports only 15 percent of the money donated to the Clinton Family
Foundation went to actual charitable causes. The bulk of the money donated
to the Clinton Family Foundation went to travel, salaries, and benefits.
Sixty percent of all the money raised went to other expenses. In other
words, folks, 85 percent of every dollar donated to the Clinton Foundation
ended up either with the Clintons or with their staff to pay for travel,
salaries, and benefits. Fifteen cents of every dollar actually went to some
charitable beneficiary."*

As this claim was circulating, the Clinton Foundation pushed back. The
foundation *tweeted*
<https://twitter.com/ClintonFdn/status/592047971631570944>, "More than 88%
of our expenditures go directly to our life-changing work."

The difference between 15 percent and 88 percent is wide, so we decided to
check Limbaugh’s claim. A representative with Limbaugh’s radio network
didn’t answer an email inquiry.

*An unusual approach for a foundation*

When most people in the charitable world think of foundations, they think
of organizations that give away a lot of money in the form of grants to
others who go out and do good works. The Clinton foundation works
differently -- it keeps its money in house and hires staff to carry out its
own humanitarian programs.

This set-up means the Clinton foundation’s finances get complicated in ways
other foundations do not.

Partly because of that, one of the leading independent groups that track
charities -- Charity Navigator -- has been flummoxed about how to analyze
that foundation and has stopped rating it, at least for now.

Charity Navigator says it has "determined that this charity's atypical
business model cannot be accurately captured in our current rating
methodology. Our removal of The Clinton Foundation from our site is neither
a condemnation nor an endorsement of this charity. We reserve the right to
reinstate a rating for The Clinton Foundation as soon as we identify a
rating methodology that appropriately captures its business model."

*What is counted in the foundation’s financials?*

The *Federalist article*
<http://thefederalist.com/2015/03/02/the-u-s-constitution-actually-bans-hillarys-foreign-government-payola/>
that Limbaugh cited dug into the Clinton foundation’s tax forms known as
990s*, *which nonprofits have to file annually with the Internal Revenue
Service. Here’s an excerpt from the *Federalist *article:

"When anyone contributes to the Clinton Foundation, it actually goes toward
fat salaries, administrative bloat, and lavish travel. Between 2009 and
2012, the Clinton Foundation raised over $500 million dollars according to
a review of IRS documents by The *Federalist *(*2012*
<http://www.guidestar.org/FinDocuments/2012/311/580/2012-311580204-09d3e966-9.pdf>
, *2011*
<http://www.guidestar.org/FinDocuments/2011/311/580/2011-311580204-08d3f620-9.pdf>
, *2010*
<http://www.guidestar.org/FinDocuments/2010/311/580/2010-311580204-07ca817f-9.pdf>
, *2009*
<https://www.clintonfoundation.org/files/cf_audited_financials_2008-2009.pdf>
, *2008*
<https://www.clintonfoundation.org/files/2008_audited_financials.pdf>). A
measly 15 percent of that, or $75 million, went towards programmatic
grants. More than $25 million went to fund travel expenses. Nearly $110
million went toward employee salaries and benefits. And a whopping $290
million during that period — nearly 60 percent of all money raised — was
classified merely as ‘other expenses.’ "

The Clinton foundation, on the other hand, gets to its 88 percent going to
"life-changing work" by *combining *the finances of the Clinton Foundation
and an affiliated organization, the Clinton Health Access Initiative, that
before 2010 had been part of the Clinton Foundation proper. The Clinton
Health Access Initiative works with governments and private groups to lower
the costs of treatment for HIV/AIDS in the developing world.

The Clinton Health Access Initiative was split off from the foundation
because "they got so big they needed their own organization to do it," said
Craig Minassian, a spokesman for the foundation, in an interview with
PolitiFact. But in putting together its *annual report*
<https://www.clintonfoundation.org/sites/default/files/clintonfoundation2013-2014annualreport.pdf>
for 2013, the Clinton Foundation folded together both groups before
calculating the numbers.

Some question the logic for doing it this way.

"Clinton allies are deliberately conflating the activities and finances of
multiple independent nonprofit organizations and hoping you'll view
everything together as ‘The Clinton Foundation,’ " Sean Davis, who wrote
the *Federalist *story, told PunditFactc. "That's just not the case,
though."

The correct number for the Clinton Foundation alone -- which owned the
account the tweet was sent from -- was just over 80 percent in 2013, not 88
percent.

*The Clinton Foundation’s unusual model*

As we noted earlier, many foundations carry out charitable works by giving
money to other organizations that, in turn, do the ground-level charity
work, whereas the Clinton foundation’s charitable works are mostly done by
people on the foundation’s payroll. "We are an implementing organization
rather than a grantmaking organization," said the foundation’s Minassian.
That’s why the Clinton Foundation’s 990s show a relatively small amount of
money categorized as "grants" -- only about 10 percent of all expenses in
2013.

The foundation says its own employees are doing its charitable work.
The *annual
report*
<https://www.clintonfoundation.org/sites/default/files/clintonfoundation2013-2014annualreport.pdf>
-- which, remember, includes both the Clinton Foundation and the Clinton
Health Access Initiative -- says that 7 percent of expenditures were spent
on "management and expenses" and 4.5 percent for "fundraising." (The
numbers on the 990s for the two entities are in the same ballpark.)

Add those two percentages together and you get almost 12 percent; subtract
that from 100 percent and you get the magic 88 percent figure the
foundation cited.

An independent academic CPA who specializes in nonprofit foundation
finances said Limbaugh’s error was in assuming that all spending beyond
grants amounted to wasteful overhead.

"When Mr. Limbaugh says most of the spending is on salaries, travel, and
other, that is not particularly informative," said Linda Parsons, an
associate professor of accounting at the University of Alabama's
Culverhouse College of Commerce. "Travel and salaries for those who are
directly carrying out the mission of the organization are much different
than salaries and travel for executives who are networking in order to
raise funds or for those who manage the organization. The response from the
Clinton foundation that they carry out their missions directly, rather than
outsource it to another organization or series of organizations, makes
sense given that the Clinton Foundation reports travel, salaries,
depreciation and conferences directly."

Of course, Parsons’ interpretation depends on trusting the Clinton
foundation’s characterization of its expenditures. As with any institution
that files tax forms, the Clinton foundation has to characterize on its own
what counts as "management" and what counts as spending on front-line
charity work.

The *Federalist *article says the foundation’s tweet exaggerates when it
says money spent "directly" on "life-changing work," when in fact the
group, by its own calculations, "spent nearly $8.5 million – 10 percent of
all 2013 expenditures – on travel. Do plane tickets and hotel
accommodations directly change lives? Nearly $4.8 million – 5.6 percent of
all expenditures – was spent on office supplies. Are ink cartridges and
staplers ‘life-changing’ commodities?"

In response to a PolitiFact request, the Clinton Foundation said the
expenditures for its programs are "inclusive of salaries for staff,
large-scale conferences (which is how the foundation convenes partners to
take action such as the Clinton Global Initiative and the Health Matters
conference), training for farmers and other beneficiaries, as well as
direct program expenses like purchasing seeds and fertilizer for our
agricultural programs and medical equipment for our public health work."

Reasonable people can disagree about how to categorize expenses, said Janet
S. Greenlee, emeritus professor of accounting at the University of Dayton
business school.

"There is no approved, required, or suggested method for allocating costs
between program and nonprogram spending, so two charities that have the
same financial events may have totally different financials," Greenlee
said. "Limbaugh is saying everything that’s not direct service must be a
waste of money, while the foundation is probably estimating that most of
its other costs are actually direct service and so are accounted as such.
The ‘truth,’ if there is such a thing, is somewhere in between."

The foundation sent PolitiFact a rough geographic breakdown for program
spending in 2012 and 2013. It cited expenditures split between 66.2 percent
for the United States, 18.1 percent for South America, 5.6 percent for
Southeast Asia, 4.9 percent for Sub-Saharan Africa, 3.6 percent for Central
America and the Caribbean, 1.2 percent for West and Central Africa and 0.4
percent for Mexico.

That’s more than we had expected to see in domestic spending -- we’re
checking with the foundation on why that was so high, and will report their
explanation if we receive one -- but even if the foundation devoted as
little as one-third of its expenses to programs outside the U.S., then
Limbaugh’s 15 percent estimate would be too low.

To offer some context, spending 88 percent of expenses on charitable
programs, as the Clinton foundation says it does, would actually be pretty
good by industry standards. Parsons said the average reported across all
organizations in the National Center for Charitable Statistics is 81
percent -- equal to the Clinton Foundation’s rate on its own -- and the
Better Business Bureau’s Wise Giving Alliance suggests a minimum of 65
percent. "The foundation exceeds that," Parsons said.

*Our ruling*

Limbaugh said "85 percent of every dollar donated to the Clinton Foundation
ended up either with the Clintons or with their staff to pay for travel,
salaries, and benefits. Fifteen cents of every dollar actually went to some
charitable beneficiary."

There’s a grain of truth here -- roughly 85 percent of the foundation’s
spending was for items other than charitable grants to other organizations,
and a large chunk of this 85 percent did go to Clinton Foundation staff for
travel, salaries and benefits. However, the foundation says it does most of
its charitable work in-house, and it’s not credible to think that the
foundation spent zero dollars beyond grants on any charitable work, which
is what it would take for Limbaugh to be correct.

The claim contains some element of truth but ignores critical facts that
would give a different impression, so we rate it Mostly False.


--

Alexander Snyder Mackler
(302) 598-867