How Hillary Clinton's White House loss may be a 'double-edged sword' for the Clinton Foundation
Could the Clinton Foundation's prodigious fundraising ability suffer a similar fate as Hillary Clinton's dashed political ambitions?
During her bid for the White House, the nonprofit bearing the names of Clinton, the former president and their daughter came under withering scrutiny for its fundraising and management practices. The foundation, which operates a range of philanthropic projects around the world and pulled in more than $200 million in revenue in 2014, has raised around $2 billion since its founding—but that money has come with a cost.
Despite scoring relatively high in accountability and transparency by nonprofit watchdogs, the foundation nonetheless became a flash-point in the 2016 election. It was dogged by accusations of influence peddling, self dealing and conflicts of interests, due in large part to hefty contributions from foreign governments and other influential donors. Since the organization's inception, tens of millions from big donors have flowed to the organization, according to the Foundation's public database.
As emails disclosed by WikiLeaks laid bare internal concerns about how the Clinton Foundation's funding might impact the former Secretary of State's run for the Oval Office, former President Bill Clinton announced in August that the nonprofit would reject corporate and foreign donations if Hillary Clinton prevailed in her campaign.
Yet as the country prepares to inaugurate President-elect Donald Trump , the point may be moot at best, philanthropy experts told CNBC recently. That is because neither Clinton will occupy a prominent role in government in the immediate future—curtailing the willingness of at least some big donors to try and curry favor with the foundation by writing large checks.
Because Hillary Clinton is no longer seen as a president in waiting, contributors may look elsewhere and the foundation may have to rethink its scope and priorities, these experts say.
The foundation did not respond to numerous requests for comment from CNBC.
"I would expect there will be much greater difficulties in fundraising for the organization," Leslie Lenkowsky, a professor with Lilly Family School of Philanthropy at Indiana University, told CNBC in an interview.
Hillary Clinton "technically has no political prospects ahead of her. They're both important people, but dealing with a past president and future president were attractive to a number of donors," Lenkowsky said. Some of the largest checks came from a range of influential donors like the governments of Norway, Australia and Kuwait.
"Some of that goodwill will disappear, [and] they will have to raise money the old fashioned way, which is proving they deserve it," he added.
Meanwhile, projects like earthquake-stricken Haiti—which earned the foundation the scorn of grassroots Haitian activists that accused the foundation of mismanaging millions that did little to alleviate the poverty-stricken country's recovery—blemished the organization's reputation.
A 2013 Government Accountability Office audit in found a litany of problems with the recovery efforts spearheaded by the Clinton Foundation. It's part of what Lenkowsky said was an example of the organization "trying to do too much."
John Wonderlich, executive director of the Sunlight Foundation, argued that Clinton's aborted political ambitions could be a "double-edged sword" for the foundation, liberating it to become more of a traditional nonprofit that's less susceptible to conflicts of interest.
"The Clintons had to create some sort of arm's length" between the organization and the prospect of a second Clinton White House, Wonderlich said, "but now there's no need for any arm's length. I can imagine this is a vehicle they pour themselves back into…now it's sort of uncomplicated," he added.
"In a sense they might have an easier time fundraising, but [for potential donors] there's no longer the appeal of getting close to a future president," Wonderlich said.
To be certain, the Clinton Foundation has a host of loyal contributors that are interested in the organization's work, and no one expects the money spigot to shut completely. Major donors include the Bill and Melinda Gates Foundation—one of the organization's top donors which has given more than $25 million.
Others, however, were less sanguine about the foundation being able to raise the same sums for its initiatives. Indiana University's Lenkowsky cited the experience of former GOP nominee Bob Dole, who once operated a nonprofit for employing people with disabilities that shuttered shortly after his political career ended.
"It's just a fact of life that people in the public eye attract money for all sorts of reasons," Lenkowsky said. "Once they are not in the public eye, the money starts to dry up."
While no one expects the Clinton Foundation to close its doors, a few observers expect a reorganization of priorities and management, at a minimum.
"Obviously they're not going to attract that much money, but they're becoming more of a legitimate foundation with a professional staff," said Pablo Eisneberg, senior fellow at the Center for Public and Nonprofit Leadership Center at Georgetown University. He cited last year's hiring of former University of Miami president Donna Shalala as part of the organization becoming more of a "regular foundation."
Hillary Clinton's loss "gives the Clinton Foundation an opportunity to focus," said Lenkowsky . "It needs to be much more focused and less involved with the political and financial interests of the Clintons, and more focused on all the things it's actually accomplishing."
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