The cenotaph-like monument to Barack Obama being built on prime lakefront property that used to be a park in Chicago is running into financial problems.  But the top executives there are feeling no pain, earning salaries far higher than those at other presidential foundations.  Fundraising is down so much that the foundation appears to have defaulted on an agreement with the City of Chicago made as a condition of receiving acres of land in Jackson Park, originally designed by Frederick Law Olmstead, and repurposed as the site of the monument (which is not a presidential library under the control of the National Archives).

A substantial analysis of the salaries and finances of the Obama Foundation done by A.D. Quig of the Chicago Tribune reveals that the ten top executives there earn far more than their counterparts at other presidential foundations, and they top the pay levels at all but one of Chicago's major cultural institutions.

A Tribune review of annual tax filings shows the median pay for the 10 highest-paid employees from 2017 through 2020 at the Obama Foundation is just shy of $344,000.

During the same period, the median salary for the 10 highest-paid employees at George W. Bush's foundation, which is based in Dallas, was $258,000, filings show, while it was $274,000 at the Clinton Foundation, which has offices in both New York City and Little Rock, Arkansas. The foundations for former President Ronald Reagan, located outside of Los Angeles, and Jimmy Carter, in Atlanta, paid their top staffers around $250,000 annually, tax filings show. (snip)

Obama Foundation spokeswoman Courtney Williams defended the pay, saying in an email that the foundation "used external compensation consultants to ensure we are living up to our values of stewardship while also attracting the best talent in a competitive market to bring forward our mission." A majority of the foundation's staff is currently working out of offices in Hyde Park. There is also an office in Washington, D.C., she said.

In addition, Williams noted the foundation had accomplished something few other cultural organizations had: a diverse executive suite. She said, "35% of our leadership team identifies as people of color ... 45% are women."

Several of the top foundation leaders worked with Obama in the White House, including David Simas, who in 2020 made $608,066 as the foundation's CEO, and Michael Strautmanis, who was White House senior adviser Valerie Jarrett's chief of staff and who in 2020 made $331,851 as the foundation's chief engagement officer. Jarrett herself became the foundation's CEO in 2021. The $592,000 she made that year wasn't included in the Tribune's analysis. (snip)

As pay has stayed high, recent expenditures on programming has dipped in the past year, the records show.

The Obama Foundation spent just over two-thirds of its expenses on programming in 2018, the fourth-lowest share of the 14 organizations the Tribune examined. The next year, that number dipped to 61% and then fell to 54.6% in 2020 during the COVID-19 pandemic.

Meanwhile, fundraising is declining, as Lynn Sweet writes in the Chicago Sun-Times:

The new 990 report shows that since the foundation was created in 2014, when Obama was still in office, the foundation has raised $866.4 million

The foundation reported on its 990 that in 2021, the Obama Foundation collected $159.6 million in contributions and grants. That's down from 2020 when the foundation gained $171 million in gifts…. (snip)

Fundraising at this scale is expensive: Overall, 21.95% of the foundation operating expenses were for fundraising, with 54.8% on programs and 23.22% on general administration.

According to Richard Epstein and Michael Rachlis writing in the Wall Street Journal, the foundation has not lived up to a financial agreement made with the City of Chicago in return for receiving the priceless lakefront acreage on which the monument sits.

Last year the foundation needed to do some fancy accounting footwork to close on the Jackson Park property. A May 2019 master agreement with the city contained two strict "condition precedents." Under the first condition, the foundation had to certify that it had "received" more money than the anticipated cost of the building as of March 2021. The foundation barely appeared to meet that target, but then insisted that it wasn't required to retain those dollars for constructing the building. What, then, was the point of the condition? As its own cost estimates ballooned from $350 million in 2018 to about $700 million in 2021, the foundation ignored its contractual obligation to update its financial projections before closing.

Under the second condition set by the city, the foundation promised to establish an endowment to cover the center's operating, maintenance and improvements. In 2020 the foundation claimed the first year of operations alone would cost $40 million, and that it needed to raise $470 million for such endowment. In June 2021 the foundation contributed a mere $1 million to the endowment, thereby ignoring the universal accounting convention that bare promises to raise money never constitute an endowment: Cash and firm pledges are always required.

The foundation's failure to meet these two conditions meant that the 2021 property transfer should never have happened.

"Should never have happened" is an apt expression for this non-presidential library under the control of Obama cronies who pay themselves well above market rates for such executives.  And just wait until freezing winter winds off the lake sweep across the plaza in front of the towering cenotaph-shaped monument.

Obama Foundation.

Hat tip: Peter von Buol.