Advocacy groups petition Fidelity Charitable to lift its block on donor-advised grants to the SPLC

Color of Change and more than a dozen other progressive nonprofits have delivered a petition with more than 50,000 signatures to Fidelity Charitable, asking it to lift its block on donor-advised fund grants to the Southern Poverty Law Center (SPLC), The Chronicle of Philanthropy reported on October 16. Backers named by the Chronicle include the In Our Name Fund and Women Donors Network. Fidelity Charitable, the largest sponsor of donor-advised funds with more than $85 billion in accounts, declined to comment to the Chronicle.

The Justice Department indicted the SPLC in April. According to the Chronicle, the charges are making false statements, wire fraud and conspiracy to commit money laundering, tied to payments the group made to informers who infiltrated extremist groups. The trial is set for February. The SPLC's leaders have denied that its actions were illegal; interim CEO and president Bryan Fair said in a video statement, "We will not be intimidated into silence or contrition," The NonProfit Times reported in May. The charges are allegations that a court has not yet tested.

What the petition asks for

According to the Chronicle, the petition makes four requests. Fidelity Charitable should restore grants that donors recommend to the SPLC, and allow grants to organizations that keep their IRS tax-exempt status even if they have been charged but not convicted of a crime. It should also give nonprofits notice and a chance to respond before their eligibility changes, and tell donors when a grant is blocked.

"Fidelity has decided, despite the fact that there has been no finding of guilt," Nadine Smith, president of Color of Change, told the Chronicle, describing what she sees as punishment before a verdict. Dan Petegorsky, a consultant with the Charity Reform Initiative at the Institute for Policy Studies, raised a broader concern about large sponsors: "When they start to control the decision making, that's extremely concerning."

Fidelity is not the only sponsor

The NonProfit Times reported in May that two other large sponsors had also stopped fundholders from granting to the SPLC after the indictment. DAFgiving360, Charles Schwab's donor-advised fund arm, said, "Per DAFgiving360 policies, granting to Southern Poverty Law Center has currently been suspended." Vanguard Charitable said it grants only to organizations that meet IRS eligibility requirements and would pause grantmaking "while the matter is pending." Fidelity Charitable pointed to a due diligence policy that allows it to decline a grant when an organization "is being investigated for alleged illegal activities or non-charitable activities."

The Chronicle also reported that Benevity, a workplace giving platform, blocked gifts to the SPLC under a policy covering "organizations facing criminal charges that go to the core of how they solicit, handle, or use charitable funds."

What donors and nonprofits can check

We have not seen Fidelity Charitable's full grant guidelines. In our view, the dispute shows that a sponsor's eligibility policy is part of the deal a donor accepts when opening an account: the money already belongs to the sponsor, and the donor only recommends grants. Our explainer on how donor-advised funds work covers that distinction. Boards of charities that rely on DAF gifts can ask how each major sponsor treats an organization under investigation or facing charges, a question that belongs on the list in what a board is for.