Obama Presidential Center endowment remains underfunded, raising taxpayer risk concerns as costs surge

The Obama Presidential Center’s promised $470 million reserve endowment remains largely unfunded, new tax filings show. The Obama Foundation deposited only $1 million into the endowment as of 2021 and has not added to it in years, even as construction costs have ballooned to at least $850 million. Critics warn that the lack of a funded cushion could leave Chicago taxpayers on the hook for operating costs or other liabilities if the project falters.

Under the terms of the 99-year agreement granting the foundation control of a 19.3-acre Jackson Park site for $10, the endowment was intended to cover operating costs and help insulate the city from losses should donors fall short. The site, part of the city’s public park system, has long been described as a central civic anchor. The center’s design includes a 225-foot-tall museum, a digital library, conference facilities, a gymnasium and a regulation-size NBA court, among other facilities, and is planned as a civic hub for Chicago and a national focal point of the former president’s legacy.

In the 2021 document trail, the foundation said first-year operating costs could be as high as $40 million, which implies an endowment several times larger than the $1 million initially funded. However, as construction progressed in the ensuing years, costs rose from an original estimate of about $330 million to at least $850 million, outpacing initial projections and contributing to concerns about how funds will be sourced for ongoing operations and maintenance.

The foundation’s latest tax return shows it ended 2024 with $116.5 million in cash, down about $80 million from the prior year, while still owing roughly $234 million in construction costs. Of the funding gap, $216 million is tied to firm pledges and another $201 million to conditional pledges that may never materialize if benchmarks are not met. Charity watchdogs noted that the endowment clause technically existed but did not specify a dollar figure. The foundation says it remains well-funded overall and that significant investments in the endowment are planned in the coming years.

Experts skeptical of the deal say the endowment shortfall is part of broader questions about governance of the project. Richard Epstein, a University of Chicago emeritus law professor, has argued that funding an endowment would be necessary to guard against public burdens if donors don’t fulfill commitments. Democratic critics and supporters alike have pointed to past debates over parkland deals and the public-trust doctrine, with supporters noting that courts have historically allowed city decisions deemed to serve a public use. The foundation maintains that the agreement complied with applicable standards, but observers say a lack of transparent financial records and independent audits could invite scrutiny.

The frame around the agreement has been controversial since its outset. The 99-year land deal, long debated in local politics, was later reframed as a use agreement rather than a land lease, a shift some observers say reduced regulatory checks. Critics have argued that the city’s move to classify the arrangement as a use agreement allowed for less public oversight than a traditional land conveyance would have required. Supporters say the designation preserved public access and a clear public benefit while enabling a major philanthropic project. The courts have historically afforded some deference to the city’s public-use determinations, including in prior challenges to similar parkland arrangements. Epstein contends that the financial structure of the Obama Center’s deal has left public interests exposed if donors fail to meet pledges.

The foundation says it has faced intense fundraising pressures and has prioritized core programs while advancing construction. It emphasizes that the center is fully funded and will open in the spring of 2026, noting that a mix of philanthropy, sponsorships and earned revenue will sustain operations while the organization continues to pursue additional commitments. Charity watchdogs have cautioned that while the endowment may be legally created, the lack of a defined dollar amount in the agreement complicates assessments of financial resilience and long-term risk to taxpayers.

While construction proceeds, the revolving line of credit remains a subject of scrutiny. The Obama Foundation has arranged a roughly $250 million revolving credit facility, which has not yet been drawn, but carries annual fees that contribute to ongoing costs. Critics say using such a facility without a clearly funded endowment amplifies the risk of reliance on donor pledges and market conditions to meet operating needs.

Officials offered no immediate comment. The offices of Mayor Brandon Johnson, Governor J.B. Pritzker, the Democratic National Committee and the Democratic Party of Illinois did not respond to requests for comment on the new filings and the status of the endowment.

As Chicago and the Obama Foundation push toward a 2026 opening, the endowment remains a focal point for debates about accountability, governance and the public cost of a project that sits at the intersection of national politics and local policy. The story of the center’s funding—framed by pledges, contingencies and a costly construction program—continues to unfold as tax filings, audits and watchdog reviews shed new light on the balance between private philanthropy and public responsibility in one of the city’s most high-profile civic ventures.