This month the Obama Presidential Center will officially open its doors on Chicago’s South Side, marking the culmination of nearly a decade of planning, fundraising, and construction by The Barack Obama Foundation. The Center’s grand opening ceremony is scheduled for June 18th, 2026, with the campus opening to the public on June 19th on the Juneteenth holiday. The nearly 20-acre campus includes a museum, public library branch, athletic facilities, community spaces, gardens, and other public amenities intended to serve both visitors and local residents. The project was funded through the Obama Foundation and is reported to have cost approximately $850 million.
As the Center opens, donors may naturally ask how the Obama Foundation compares with other major charitable organizations and whether the Foundation currently meets CharityWatch’s rating criteria.
The Obama Foundation describes its mission as inspiring, empowering, and connecting people to change their communities through leadership development, civic engagement, and public programming. In addition to operating leadership initiatives around the world, the Foundation has spent much of the past decade raising and deploying funds to construct the Obama Presidential Center.
Unlike many charities that primarily direct donations toward ongoing program services, the Foundation has been engaged in a massive capital project requiring hundreds of millions of dollars in construction expenditures. Such projects can significantly affect a charity’s financial statements for years, making it difficult to evaluate fundraising efficiency, program spending, and other performance measures in a manner that is comparable with charities engaged primarily in ongoing programmatic activities.
To illustrate, according to its 2024 audited financial statements, the Foundation reports that it spent just over $222 million that year on costs related to building its museum campus. These costs do not show up in the organization’s reported program spending. Rather, they are reported on the charity’s balance sheet as an increase in a line item called “Construction In Progress,” which is an asset account. This asset was worth $393 million as of the end of 2023 and its value increased by about $222 million to nearly $616 million in 2024, according to the charity’s audited balance sheet. This spending will eventually be recognized in the charity’s reported program and other expenses, but this will happen gradually in the form of depreciation expenses over many years into the future.
Donors may be surprised to learn just how long this accounting process can take. Once the Obama Presidential Center is placed into service, the construction costs that have accumulated as “Construction In Progress” on the Foundation’s balance sheet will generally be reclassified as depreciable assets and recognized as expenses gradually over their estimated useful lives. For major institutional buildings, useful lives of 30 to 40 years are common, meaning that a substantial portion of the costs associated with constructing the Center may not be reflected in the Foundation’s reported expenses until decades after the money was actually spent. In other words, expenditures made over the past decade to advance the Foundation’s mission through the construction of the Presidential Center could continue flowing through its statement of activities as depreciation expenses well into the 2050s and 2060s. This illustrates why annual program-spending ratios can be particularly misleading for organizations engaged in large-scale capital projects.
Although CharityWatch does not currently assign a letter grade to the Obama Foundation due to the significant impact of the Obama Presidential Center construction project on its financial reporting, we were able to compute certain financial efficiency metrics. We analyzed the Foundation’s 2023 and 2024 audited financial statements and IRS Forms 990. CharityWatch estimates that the Foundation spent approximately $15 to raise every $100 in cash contributions in 2023 and approximately $12 to raise every $100 in cash contributions in 2024. These figures compare favorably with those of many large national charities and suggest that the Foundation has been highly successful in converting fundraising expenditures into charitable support.
By contrast, CharityWatch was unable to compute meaningful program spending percentages for The Obama Foundation for 2023 or 2024. Making simple calculations by dividing reported program expenses by total expenses would not be valid, as these figures do not include the hundreds of millions of dollars in construction costs incurred to build the Presidential Center. Taken at face value, such computations would result in a program percentage of only approximately 60% in 2023 and 56% in 2024.
Standing alone, these percentages would suggest that the charity had high overhead and low program spending during its 2023 and 2024 reporting years, but such a conclusion would be misleading. A computation of total program spending for these years is not possible based on currently available information since, under accounting rules, the charity won’t report what portions of its $616 million in capital expenditures were incurred for program activities versus overhead until such costs are depreciated over the next few decades.
Earlier this year, CharityWatch examined leadership compensation at The Barack Obama Foundation following disclosures that CEO Valerie Jarrett received $755,862 in salary and other compensation during 2024, while numerous other officers and key employees also received multiple six-figure compensation packages. (See Form 990 Part VII and Schedule J). Compensation alone does not determine whether a charity is effective or worthy of support, but CharityWatch has long maintained that donors deserve transparency regarding how charitable resources are allocated and whether compensation arrangements are reasonable and properly governed.
As with any public charity, compensation should be evaluated in context, and consider the education, skills, and experience required for each job to be conducted competently and effectively, as well as the procedures used by its board to establish executive pay.
The opening of the Obama Presidential Center is an unquestionably significant milestone for Chicago and for the Obama Foundation. The Center is expected to attract hundreds of thousands of visitors annually and will serve as a permanent public institution dedicated to preserving and interpreting the legacy of President Barack Obama and First Lady Michelle Obama.
For donors, however, the opening also serves as a reminder that charitable giving decisions should be based on more than publicity, popularity, or media attention. Whether thinking about making a donation to a presidential foundation, a university, a hospital, or any other nonprofit organization, donors should carefully consider a charity’s financial reporting, governance practices, and programmatic accomplishments before making a contribution. In addition, donors should also be careful to not rely on charity ratings whose methodologies do not incorporate a meaningful understanding of how accounting rules require the expenditures of such organizations to be reported.
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