Trump Foundation: Allegations and Legal Consequences (2025 Update)

Overview of the Trump Foundation

Established in 1988 by Donald J. Trump as the Donald J. Trump Foundation, this private charity aimed to distribute proceeds from his business ventures, like The Art of the Deal, to worthy causes. Initially funded with $6M of Trump’s money, it later relied on external donations. By the 2010s, allegations of self-dealing, misuse of funds, and political interference emerged, painting it as a vehicle for Trump’s personal and political gain rather than genuine philanthropy, a narrative reignited as he began his second presidency on January 20, 2025.

Fraudulent Practices and Misuse of Funds

The Trump Foundation faced multiple accusations of improper conduct:

• Using Charity Funds for Personal Gains: Trump allegedly tapped foundation money to settle business disputes, including a $158,000 payment in 2012 to resolve a Mar-a-Lago flagpole lawsuit and $100,000 for a Palm Beach case, blurring lines between charity and profit.
• Misuse of Funds for Personal Purchases: In 2014, it spent $10,000 at a charity auction on a 6-foot portrait of Trump, later hung at his Doral golf resort, and $20,000 on a Tim Tebow-signed helmet, raising red flags over personal enrichment.
• Political Contributions: In 2013, the foundation donated $25,000 to Florida AG Pam Bondi’s re-election campaign, days after her office declined to probe Trump University, breaching IRS bans on charity political gifts—Trump called it an oversight, paying a $2,500 IRS fine.
• Self-Dealing and Lack of Oversight: Trump acknowledged occasional personal use of funds, like a $12,000 check for his son’s Boy Scouts dues. The foundation held no board meetings after 1999, lacked staff, and operated from Trump Org offices, flouting governance norms.

From 2007 to 2018, it raised $19.2M, mostly from others, with Trump’s last contribution in 2008.

Legal Action and Closure

In September 2016, amid Trump’s first campaign, New York AG Eric Schneiderman opened an investigation into the foundation’s finances. On June 14, 2018, AG Barbara Underwood sued Trump and his children—Donald Jr., Ivanka, and Eric—alleging “persistent illegal conduct” (NY v. Trump Foundation, Index No. 451130/2018). On November 7, 2019, Judge Saliann Scarpulla ordered its dissolution, mandating $1.78M in remaining funds to eight charities. Trump paid $2M in damages—$500K per violation—for self-dealing, finalized December 10, 2019, and his kids underwent mandatory charity training. The foundation shuttered fully by 2020.

Trump’s Defense

Trump dismissed the lawsuit as a “political hit job” by “radical Democrats,” tweeting in 2018, “I won’t settle this case!” He claimed the foundation gave away “millions” to “great causes” like St. Jude’s—$8.7M from 1988 to 2016—and blamed clerical errors for IRS violations. Post-settlement, he said in December 2019, “All they got was paperwork mistakes,” insisting he acted in good faith. Supporters in 2025 still argue it was a partisan attack.

Impact and Legacy

The Trump Foundation’s closure marked a rare legal reckoning, costing Trump $2M and dissolving a 30-year entity. A March 5, 2025, Vox piece framed it as a “microcosm” of his broader ethics woes, tied to his $453.5M NY civil fraud penalty. Critics call it proof of grift; defenders see it as minor compared to his $2.6B net worth. As Trump governs in 2025, the case fuels debates over his financial integrity, with some viewing it as a cautionary tale of unchecked power.