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DAFs freeze SPLC grants
After the U.S. Department of Justice’s indictment of the Southern Poverty Law Center, commercial donor-advised funds froze grants to the SPLC, and Fidelity Charitable, Vanguard Charitable, and DAFGiving360 each announced they would no longer send donations to the organization.
“Fidelity Charitable, Vanguard Charitable, and DAFGiving360, a donor-advised fund associated with the Charles Schwab Corporation, each announced they would no longer send donations to the SPLC.”
The Boston Globe described a separate incident in which a donor attempted to make a donation to the Southern Poverty Law Center through a Fidelity donor-advised fund and said the request was denied without explanation.
The Chronicle of Philanthropy reported that Fidelity declined an interview request and pointed to its guidance on when a grant can be declined, including when “the organization is being investigated for alleged illegal activities or non-charitable activities, such as terrorism, money laundering, hate crimes, or fraud.”
In the same Chronicle account, the paper said the freeze followed the DOJ’s indictment alleging donor fraud tied to payments to informants who infiltrated racist extremist groups including the Ku Klux Klan, and it framed the SPLC as a civil rights nonprofit facing a highly contested criminal indictment.
Community foundations push back
Community foundation leaders criticized the big donor-advised fund groups’ decision, with Fred Blackwell, CEO of the San Francisco foundation, saying the move was “a capitulation to the Trump administration, which has been hostile to civil rights nonprofits.”
Blackwell also argued that pausing contributions to the SPLC can’t be characterized as “neutral, wait and see,” saying the commercial funds were taking sides by blocking grants before any legal verdict.
The Chronicle of Philanthropy reported that donors could transfer their charitable assets from a commercial fund to a fund run by a community foundation or make direct gifts to the Southern Poverty Law Center, and it said Brooklyn Org offered to make a $718 donation for each account transferred over the next month.
In contrast, the San Francisco Foundation said it would continue to fund donations to SPLC, with Blackwell warning that “giving platforms are not acting neutrally when they cut off access to charitable resources based solely on a charge, before any court has weighed the facts.”
Financial exclusion as pressure
The Intercept said the SPLC’s most immediate threat was coming from the financial system, arguing that Fidelity Charitable, DAFgiving360, and Vanguard Charitable had begun blocking donor-advised fund donations to the SPLC and “effectively cutting off one of the organization’s most important funding pipelines.”
“effectively cutting off one of the organization’s most important funding pipelines”
The Intercept linked the decision to what it called a politicized and bogus indictment announced late last month by the Trump Department of Justice, and it cited a letter from Democratic Reps. Jamie Raskin and Mary Gay Scanlon to the House Judiciary Committee about whistleblower reports.
In the same Intercept account, Rainey Reitman wrote that financial censorship sometimes happens to those who have been merely accused of a crime, pointing to the 2010 WikiLeaks blockade in which major financial institutions including Visa, Mastercard, and Bank of America cut off its ability to receive online donations.
The Intercept also described how the consequences of financial exclusion can extend beyond the targeted organization, saying the chilling effect can reach anyone who wants to attend protests or engage in advocacy, and it compared government pressure on credit card companies in Backpage.com v. Dart to “killing a person by cutting off his oxygen supply rather than by shooting him.”
