Glenn Youngkin has drawn headlines for self-funding his campaign as the Republican nominee for Governor in Virginia, spending more than $16 million on his effort to defeat his Democratic opponent, former Governor Terry McAuliffe, on November 2nd. Outside of politics, the former co-CEO of private equity firm the Carlyle Group, who Forbes estimates has a net worth of $440 million, has focused his spending on the Phos Foundation, a private foundation he and his wife Suzanne established in 2016 with the goal of providing “life-changing or transformational opportunities, environments and experiences, guided by Christian values and principles.”
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The bulk of the foundation’s assets consists of two limited liability companies: Trinity Group LLC and Delta Farm LLC, valued at $10.25 million and $11.7 million, respectively. They accounted for 97% of the total fair market value of assets in the foundation in 2019, the last year for which public filings are available. Delta Farm was donated to the foundation by Youngkin’s wife Suzanne in 2016, while Trinity Group was donated by the Suzanne Youngkin Revocable Trust in 2017.
Trinity Group owns the land at 850 Balls Hill Rd in McLean, Virginia that’s home to the Holy Trinity Church, the Episcopalian church where Youngkin serves as a warden. According to public filings, the church rents the property—which had an assessed value of $6 million in 2021—from Trinity Group for $1 a year. Trinity Group acquired the property in 2017 for $11 million from the Oakcrest School, a Catholic all-girls school in nearby Vienna.
Delta Farm owns a 358-acre farm in Middleburg, Virginia described as “pastoral and wooded nature serving as a place of retreat, respite and renewal.” The site, with an assessed value of $9.1 million in 2021, is run by Meadowkirk, a “Christian retreat ministry” where Suzanne serves on the board of directors. Delta Farms purchased the land in 2013 for $11.6 million from National Capital Presbytery Inc., a network of Presbyterian churches in the D.C. area. Meadowkirk also rents the property from Delta Farm for $1 a year, and both Meadowkirk and Holy Trinity Church are tax-exempt organizations.
In all but one of the Phos Foundation’s four available annual tax filings—for the years 2016, 2017 and 2018—the foundation paid out far less than 5% of its total assets, potentially falling foul of the requirement that private foundations disperse at least 5% of the total fair market value of their assets in grants and related expenses each year. A spokesperson for Glenn Youngkin declined to comment on the foundation.
But Phos excludes the value of the two LLCs when calculating the amount it needs to distribute each year, keeping its modest disbursements—about $2.1 million since 2016 to various organizations including the Youngkin Equine Soundness Clinic at Virginia Tech and the Orthodox Christian nonprofit FOCUS North America—within the bounds of the 5% requirement. According to two tax experts who spoke with Forbes, the Youngkins may be able to exempt the value of the two LLCs from the total assets because they are used for charitable purposes by Holy Trinity Church and Meadowkirk.
“They’re essentially donating these LLCs and indirectly donating that land to the foundation. If it were all about maximizing tax savings, the best way of doing that would be to donate to a public charity through a donor advised fund,” says Brian Mittendorf, a professor of accounting at Ohio State. “If that land was being used for charitable purposes, then they can leave that land out of the calculation.”
In 2019, the Youngkins contributed nearly $1.7 million in cash and stock to the foundation and Phos paid out more than $1.2 million in grants. That finally brought the foundation’s giving within the 5% threshold at 5.4% of its total assets of $22.5 million, including the value of the two LLCs.
“It’s not behaving like a traditional private foundation, where a very wealthy person will endow it with their wealth and then it pays out about 5% every year into these different charities,” says Mittendorf.