Non-profit

Fund II Foundation

Website:

www.fund2foundation.org

Location:

AUSTIN, TX

Tax ID:

47-2396669

Tax-Exempt Status:

501(c)(3)

Budget (2019):

Revenue: $22,215,363
Expenses: $36,604,679
Assets: $146,185,620

Founded:

2014

Executive Director:

Linda Wilson

Type:

Grant-giving Organization

Fund II Foundation is the grantmaking foundation associated with Robert F. Smith, the billionaire founder and CEO of Vista Equity Partners who has become the wealthiest African American in the country. The foundation’s mandate is to fund organizations that preserve African-American culture, combat human rights violations, promote outdoor education, promote music education, or provide professional support to underprivileged groups. [1] The Foundation donates to some left-of-center organizations and helped finance the New York Times’s controversial left-of-center 1619 Project. [2]

In 2020, the foundation was implicated in a tax avoidance scheme allegedly orchestrated by Smith, who eventually admitted to routing $182 million in concealed income through the fund. [3]

Foundation executive director Linda Wilson, who has little online presence, is described on the organization’s website as a former “diversity and inclusion vice president at a global engineering company” and as “one of Al Gore’s soldiers against climate change.” [4]

Grants

As of August 2021, the Fund II Foundation has made about 80 grants worth nearly $250 million. Its grants go to a wide variety of nonprofit organizations, including universities, high schools, youth programs, wildlife reserves, hospitals, scientific research centers, and music conservatories. [5] [6] [7]

In 2019, the foundation gave $3 million to the Sphinx Organization, a Detroit-based national nonprofit dedicated to promoting “diversity” in the arts. [8]

In 2018, the Fund II Foundation gave $500,000 to the New York Times to finance the 1619 Project, a left-wing journalistic endeavor that asserts the centrality of slavery in the founding of the United States and has been widely criticized for historical inaccuracy. [9]

Also in 2018, the foundation gave $1.3 million to Fair Count, a Georgia-based group that encouraged participation in the 2020 census. [10]

The Fund II Foundation’s largest donations have gone to universities. In 2019, foundation founder Robert F. Smith attracted positive press when he pledged $34 million through the Fund II Foundation to pay off all student loan debt for the graduating class of 2019 at Morehouse College, a historically black college. Smith pledged an additional $1.5 million to Morehouse College for scholarships and renovations. [11] [12]

After the Morehouse College donation, the Fund II Foundation co-founded the Student Freedom Initiative with a $50 million grant. The nonprofit is devoted to supporting the careers of recent college graduates who attended minority-serving institutions. [13]

In 2017, the foundation gave $15 million to Smith’s alma mater, Columbia University, to help move the location of its business school. In 2016, the foundation gave $20 million to Smith’s other alma mater, Cornell University, to support its chemical engineering school. [14] Also in 2017, the Foundation gave $1.5 million to the National Audubon Society. [15]

The Fund II Foundation is one of the largest private funders of the National Park Foundation, the official charity of the U.S. National Park Service. In 2016 alone, the foundation gave $39 million to the National Park Foundation. [16] Also in 2016, the Foundation gave $3 million to the controversial Southern Poverty Law Center (SPLC) to support left-of-center criminal justice policy. [17]

Connections to Tax Scheme

In August 2020, Bloomberg News reported that Fund II Foundation founder Robert F. Smith had been under investigation by the U.S. Internal Revenue Service (IRS) and U.S. Department of Justice (DOJ) for alleged tax schemes since 2014. Smith was accused of conspiring with billionaire software CEO Robert Brockman to conceal his income by routing proceeds from Vista Equity Partners through Caribbean shell corporations secretly owned by Smith. Smith allegedly avoided paying taxes on $200 million in income. [18]

As much as $182 million of these concealed funds were routed through the Fund II Foundation and dispersed philanthropically, thereby earning Smith improper charitable tax deductions. [19]

In October 2020, Smith made an agreement with the DOJ to pay a $139 million penalty and surrender $182 million in charitable tax deductions, but he avoided further penalties by agreeing to assist the DOJ in its case against Brockman, which would later result in the largest tax evasion prosecution in U.S. history. [20]

References

  1. “Our Mission.” Fund II Foundation. Accessed August 26, 2021. https://www.fund2foundation.org/our-mission/. ^
  2. “Our Mission.” Fund II Foundation. Accessed August 26, 2021. https://www.fund2foundation.org/our-mission/. ^
  3. Voreacos, David; Weinberg, Neil. “Billionaire Robert Smith Fighting U.S. Criminal Tax Inquiry.” Bloomberg. August 21, 2020. Accessed August 25, 2021. https://www.bloomberg.com/news/articles/2020-08-21/billionaire-robert-smith-fighting-u-s-criminal-tax-inquiry. ^
  4. “Linda Wilson.” Fund II Foundation. Accessed August 26, 2021. https://www.fund2foundation.org/leadership/linda-wilson/. ^
  5. “About Us.” Fund II Foundation. Accessed August 26, 2021. https://www.fund2foundation.org/about-us/. ^
  6. “Fund II Foundation 990.” ProPublica. Accessed August 26, 2021. https://projects.propublica.org/nonprofits/display_990/472396669/02_2021_prefixes_47-47%2F472396669_201911_990PF_2021021317706243. ^
  7. Adeniji, Ade. “”Moving Forward.” Robert F. Smith Talks About the Future of His Philanthropy.” Inside Philanthropy. February 24, 2021. Accessed August 25, 2021. https://www.insidephilanthropy.com/home/2021/2/24/robert-f-smith-talks-black-philanthropy-systemic-change-and-addresses-tax-scandal. ^
  8. “Fund II Foundation Awards $3 Million to Sphinx Organization.” Philanthropy News Digest. May 10, 2019. Accessed August 26, 2021. https://philanthropynewsdigest.org/news/fund-ii-foundation-awards-3-million-to-sphinx-organization ^
  9. “Fund II Foundation 990.” IRS. Accessed August 25, 2021. https://apps.irs.gov/pub/epostcard/cor/472396669_201911_990PF_2021021317706243.pdf. ^
  10. “Fund II Foundation 990.” ProPublica. Accessed August 26, 2021. https://projects.propublica.org/nonprofits/display_990/472396669/02_2021_prefixes_47-47%2F472396669_201911_990PF_2021021317706243. ^
  11. Kaur, Harmeet. “What to know about Robert F. Smith, the man paying off Morehouse grads’ student loans.” CNN Business. Updated May 20, 2019. Accessed August 25, 2021. https://www.cnn.com/2019/05/19/business/robert-smith-billionaire-morehouse-gift-trnd/index.html. ^
  12. “Philanthropy.” Robert F. Smith. Accessed August 25, 2021. https://robertsmith.com/philanthropy/. ^
  13. “Philanthropy.” Robert F. Smith. Accessed August 25, 2021. https://robertsmith.com/philanthropy/. ^
  14. “Philanthropy.” Robert F. Smith. Accessed August 25, 2021. https://robertsmith.com/philanthropy/. ^
  15. “Fund II Foundation.” Grantmakers.io. Accessed August 26, 2021. https://www.grantmakers.io/profiles/v0/472396669-fund-ii-foundation/. ^
  16. Adeniji, Ade. “”Moving Forward.” Robert F. Smith Talks About the Future of His Philanthropy.” Inside Philanthropy. February 24, 2021. Accessed August 25, 2021. https://www.insidephilanthropy.com/home/2021/2/24/robert-f-smith-talks-black-philanthropy-systemic-change-and-addresses-tax-scandal. ^
  17. “Fund II Foundation 990.” IRS. Accessed August 25, 2021. https://apps.irs.gov/pub/epostcard/cor/472396669_201711_990PF_2018120715985020.pdf. ^
  18. Voreacos, David; Weinberg, Neil. “Billionaire Robert Smith Fighting U.S. Criminal Tax Inquiry.” Bloomberg. August 21, 2020. Accessed August 25, 2021. https://www.bloomberg.com/news/articles/2020-08-21/billionaire-robert-smith-fighting-u-s-criminal-tax-inquiry. ^
  19. Voreacos, David; Weinberg, Neil. “Billionaire Robert Smith Fighting U.S. Criminal Tax Inquiry.” Bloomberg. August 21, 2020. Accessed August 25, 2021. https://www.bloomberg.com/news/articles/2020-08-21/billionaire-robert-smith-fighting-u-s-criminal-tax-inquiry. ^
  20. Adeniji, Ade. “”Moving Forward.” Robert F. Smith Talks About the Future of His Philanthropy.” Inside Philanthropy. February 24, 2021. Accessed August 25, 2021. https://www.insidephilanthropy.com/home/2021/2/24/robert-f-smith-talks-black-philanthropy-systemic-change-and-addresses-tax-scandal. ^

Directors, Employees & Supporters

  1. Robert F. Smith
    Officer/Board Member

Supported Movements

  1. 1619 Project
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Nonprofit Information

  • Accounting Period: November - October
  • Tax Exemption Received: June 1, 2015

  • Available Filings

    Period Form Type Total revenue Total functional expenses Total assets (EOY) Total liabilities (EOY) Unrelated business income? Total contributions Program service revenue Investment income Comp. of current officers, directors, etc. Form 990
    2019 Nov Form PF $22,215,363 $36,604,679 $146,185,620 $90,467 $0 $0 $0 $0 PDF
    2015 Nov Form PF $246,963,010 $60,529,545 $191,433,465 $0 $0 $0 $0 $0 PDF
    2014 Nov Form PF $5,000,000 $0 $5,000,000 $0 $0 $0 $0 $0

    Additional Filings (PDFs)

    Fund II Foundation

    401 CONGRESS AVE STE 3100 # 3100
    AUSTIN, TX 78701-3707