Recursion is not necessary here if you build the parent-child relationships before filtering. Since the members of the list remain the same objects, as long as you associate each member of the list with its immediate children, all of the necessary relationships will be built.

This can be done in two lines:

items.ForEach(item => item.Children = items.Where(child => child.ParentID == item.ID)
                                           .ToList());
List<MyClass> topItems = items.Where(item => item.ParentID == 0).ToList();

I have required such functionality and compare both methods and find method 2nd is faster than 1st :), right now in my database cards or records are limited but 1st method taking 4 times more time to complete.

may be this can help for those who are conscious about time.

1 method

    public JsonResult CardData()
    {
        var watch = System.Diagnostics.Stopwatch.StartNew();
        OrgChartWithApiContext db = new OrgChartWithApiContext();

        var items = db.Cards.ToList();
        Action<Card> SetChildren = null;
        SetChildren = parent => {
            parent.Children = items
                .Where(childItem => childItem.ParentId == parent.id)
                .ToList();

            //Recursively call the SetChildren method for each child.
            parent.Children
                .ForEach(SetChildren);
        };

        //Initialize the hierarchical list to root level items
        List<Card> hierarchicalItems = items
            .Where(rootItem => !rootItem.ParentId.HasValue)
            .ToList();

        //Call the SetChildren method to set the children on each root level item.
        hierarchicalItems.ForEach(SetChildren);
        watch.Stop();
        var timetaken = watch.ElapsedMilliseconds;

        return new JsonResult() { Data = hierarchicalItems, ContentType = "Json", JsonRequestBehavior = JsonRequestBehavior.AllowGet };
    }

method 2

    public JsonResult Card2Data()
    {
        var watch = System.Diagnostics.Stopwatch.StartNew();
        OrgChartWithApiContext db = new OrgChartWithApiContext();
        var items = db.Cards.ToList();
        List<Card> topItems = items.Where(item => !item.ParentId.HasValue).ToList();
        topItems.ForEach(item => item.Children = items.Where(child => child.ParentId == item.id).ToList());
        watch.Stop();
        var timetaken = watch.ElapsedMilliseconds;
        return new JsonResult() { Data = topItems, ContentType = "Json", JsonRequestBehavior = JsonRequestBehavior.AllowGet };
    }

For hierarchical data, you need recursion - a foreach loop won't suffice.

Action<MyClass> SetChildren = null;
SetChildren = parent =>
    {
        parent.Children = items
            .Where(childItem => childItem.ParentID == parent.ID)
            .ToList();

        //Recursively call the SetChildren method for each child.
        parent.Children
            .ForEach(SetChildren);
    };

//Initialize the hierarchical list to root level items
List<MyClass> hierarchicalItems = items
    .Where(rootItem => rootItem.ParentID == 0)
    .ToList();

//Call the SetChildren method to set the children on each root level item.
hierarchicalItems.ForEach(SetChildren);

items is the same list you use. Notice how the SetChildren method is called within itself. This is what constructs the hierarchy.