It was funded through private donations, not public or federal money. The project was supported by Roosevelt’s friend and political ally, Eric Johnston, then-president of the U.S. Chamber of Commerce, who helped raise private funds.
The East Wing was initially created to provide additional office space and to house a top-secret bomb shelter known as the Presidential Emergency Operations Center (PEOC) beneath it — a direct response to the threat of enemy attacks during WWII. It also added a formal entrance for guests arriving by car, enhancing the White House’s functionality and security.