A statement regarding the three largest DAF sponors’ halt on grant-making to the Southern Poverty Law Center

By CCF 

We call on these organizations, who altogether hold over $100 billion in donor-advised funds, to stop complying in advance. Compliance in advance helps authoritarianism grow.

In response to the Justice Department’s indictment of the Southern Poverty Law Center (SPLC), the three largest donor-advised fund (DAF) sponsors—Fidelity Charitable®, Vanguard Charitable, and DAFgiving360™, (formerly known as Schwab Charitable)—have halted grant-making to the civil rights organization. There has yet to be evidence of criminal wrongdoing, and the organization still currently maintains its 501(c)3 status, which is the only requirement for an organization to receive donated funds. 

After the announcement of the indictment against SPLC, donors rushed to provide financial support for the organization to help them fight back against the Trump administration. Because the donors received no communication regarding the halt, they learned of it when their attempts to direct their DAF funds were denied. It’s important to note that most donors believe the money they hold in DAFs is intended to be stewarded by them. However, a district court in 2021 ruled that after donors have transferred their wealth into a DAF with a sponsoring organization, they relinquish control and the money no longer belongs to them. Most see this as a nullification of the entire concept of a donor-advised fund.

Following an outpouring of disgust, Fidelity shared their reasoning: In an article in The Chronicles of Philanthropy, Fidelity claimed they reserved the right to decline granting to an organization when “the organization is being investigated for alleged illegal activities or non-charitable activities, such as terrorism, money laundering, hate crimes, or fraud.”

We see these DAF sponsors—the largest in the U.S.—capitulating to the accusations of an administration that thrives on fearmongering and has been using the Justice Department as a weapon of control. While they are technically within their legal rights to refuse a donor’s wishes, this is compliance in advance, not an act based on due diligence. The SPLC has existed for 55 years and has a track record of contributing to the advancement of civil rights in this country.

We call on these organizations, who altogether hold over $100 billion in donor-advised funds, to stop complying in advance. Compliance in advance helps authoritarianism grow. It is only when enough of us say enough, that we can stop this decline into an autocratic society. 

Community-Centric Fundraising is currently primarily funded by a multi-year Fidelity Charitable® Catalyst Fund grant, and we will continue to use their funds to support our movement, challenge the philanthropic sector, and call out exploitative and extractive fundraising practices. We reserve the right to have a difficult discussion with any of our funders about behavior that erodes community trust and the advancement of social justice; we will not stay silent when we see this type of compliance take place. 

For our part, we will have a difficult conversation with our Fidelity Charitable® Catalyst Fund representative during our regularly scheduled meeting on May 14. We have an existing relationship with them and will lean into that relationship to ask for change. We will directly ask why Fidelity has chosen to uphold this policy when they previously were, according to an article in The Chronicles of Philanthropy, among the biggest donors to hate groups the SPLC exposed, granting $4.6 million to 23 groups without such reservation. 

We have signed this letter in support of SPLC, and we encourage you to do the same. 

We also cosign this suggestion published in an article in The Chronicles of Philanthropy: If you have DAFs with Fidelity, Vanguard, or DAFgiving360, transfer your assets to a local community foundation that allows grants to SPLC, support them and their life-saving work, and then take this time to spend down all that you have stored in DAFs. Nonprofits this current administration feels threatened by—primarily BIPOC-, immigrant-, and queer-led nonprofits protecting and supporting the most marginalized among us—are doing the best they can with reduced resources and could use that wealth. Support the nonprofits doing good works in your community and the world.

For any questions or inquiries about this statement, please message us at hello@communitycentricfundraising.org.