**Obama Foundation Faces New Criticism Over Handling of Presidential Center’s Reserve Fund**
The Obama Foundation is under renewed scrutiny regarding its management of the Obama Presidential Center in Chicago. Recent tax filings reveal the organization has deposited only $1 million into a reserve fund that was originally pledged to reach $470 million. This fund is intended to protect taxpayers from financial fallout should the project encounter difficulties, but it has not grown since 2021.
Located on 19.3 acres of Jackson Park, the Obama Presidential Center was secured by the foundation in 2018 under a 99-year agreement with the City of Chicago for a nominal fee of $10. As part of this deal, the foundation committed to creating an endowment that would ensure the public would not bear the project’s costs if it were to fail. Critics, however, point out that the endowment remains nearly empty while construction expenses continue to rise.
Former President Barack Obama and former First Lady Michelle Obama participated in a groundbreaking ceremony in September 2021, at which time the foundation had placed just $1 million into the endowment. That figure remains unchanged, even as the center’s estimated costs have escalated from an initial $330 million to at least $850 million.
Illinois Republican Party Chair Kathy Salvi sharply criticized the project, telling Fox News Digital, “It should come as no surprise that the Obama Center is potentially leaving Illinois taxpayers high and dry — it’s an Illinois Democrat tradition. Democrats in this state, when not going to prison for corruption, treat taxpayers like a personal piggy bank giving sweetheart deals to their political benefactors.”
Legal experts have also voiced concerns. Richard Epstein, a law professor emeritus at the University of Chicago and New York University who advised Protect Our Parks—a local nonprofit that tried to block the center’s construction through litigation—described the endowment shortfall as alarming. “They put a million dollars into a $400 million endowment, so it’s endowed. That gets you in jail as a securities matter,” Epstein said. “An endowment means that you have the money in hand. But they have nothing. They just have the same $1 million that they put in in 2021 as far as I can tell. So I regard this as something of a public calamity.”
Epstein further noted that without a funded endowment, the foundation faces financial volatility. “Without an endowment, they’ll have to scramble every year to cover $30 million in operating costs,” he said. “The whole point of an endowment is to avoid that volatility. They just haven’t endowed it. Of that I’m 100% sure.”
Tax records for 2024 show the Obama Foundation ended the year with $116.5 million in cash, nearly $80 million less than the previous year, while owing $234 million in construction costs. Of that debt, $216 million is backed by firm pledges, while another $201 million depends on conditional pledges that may not be fulfilled.
The foundation has also opened a $250 million revolving credit line, which remains unused but incurs significant annual fees. To date, the foundation has spent approximately $600 million on construction, which includes a 225-foot museum tower, digital library, conference space, gymnasium, and an NBA regulation basketball court. The center is also set to house the Obama Foundation’s offices.
In response to the criticism, the foundation stated it plans to fund the endowment in the future. A spokesperson told Fox News Digital, “The Obama Presidential Center is fully funded and it will open in the spring of 2026,” adding that significant investments in the endowment will be made in the coming years.
CharityWatch, a nonprofit watchdog group, noted that the foundation technically complies with its agreement since the deal did not specify an exact dollar amount for the endowment. However, the organization acknowledged the risks associated with relying on donor pledges and operating without a stable reserve.
Epstein also criticized the City of Chicago’s role in enabling the foundation by categorizing the arrangement as a use agreement rather than a land lease. This classification helped the city avoid stricter legal scrutiny under the public trust doctrine, which prohibits cities from transferring public land without clear public benefit.
He referenced a 2016 case that blocked filmmaker George Lucas’s proposed museum on lakefront land as evidence that the city tailored its terms to sidestep potential legal challenges. “They’ve gotten a free pass on both the environmental side and the financial side,” Epstein said. “Unless somebody cracks open the books, nobody really knows if they can actually fund this project. And if they can’t, it’s the public that will be left holding the bag.”
While the Obama Foundation maintains that the project will be completed on schedule, questions persist over the financial guarantees and whether taxpayers may ultimately bear the risk if fundraising goals fall short.
https://www.lifezette.com/2025/09/obama-foundation-leaves-taxpayers-exposed-with-empty-470-million-pledge-watch/