The donor-advised fund affiliated with Charles Schwab, DAFgiving360, has suspended the ability of account holders to donate money to the Southern Poverty Law Center, a civil rights group.
Last week, the Justice Department indicted the group and accused it of financial crimes. Earlier this week, donor-advised funds that go by the names Fidelity and Vanguard also cut the group.
A spokeswoman for the Schwab-affiliated fund said: “If a charity’s governing body says it is opening an investigation into a charity it oversees, DAFgiving360 may suspend grants to the organization. » She would not provide a list of other organizations she has suspended.
Donor-advised funds allow individuals to create accounts, donate cash or securities, and receive a tax deduction for the entire amount for the year. Then they can spread the donations to charities and other nonprofits over many years.
“Giving to your favorite charity has never been easier” is the language DAFgiving360 uses on its website. Charles Schwab lists the account balance right next to the investment account balances on its own website.
However, DAFgiving360 is also careful to use specific language that addresses the legal reality of how the funds work. For example, users can “recommend” grants to “eligible” charities, meaning DAFgiving360 controls the money and the account holder is technically just advising.
This is almost never a practical problem for account holders; Donor-advised funds generally approve donation requests. But following the indictment, which accused the SPLC of paying informants money that contributed to the extremism it opposes, President Trump said he believed the SPLC was behind the 2017 Charlottesville racist riots.
Mr. Trump has provided no evidence for his allegations against the center. And many Fidelity and Vanguard customers are furious about the ruling against the SPLC.
DAFgiving360 customers express similar sentiments. “It’s too safe a position, and they shouldn’t have done it,” Jani Rachelson, a retired New Jersey labor lawyer who was unable to donate to the SPLC, said of Schwab’s action. “Anticipatory conformity is the bane of our lives these days.
DAFgiving360 said in its statement that it applies its policies consistently across all charities, regardless of their viewpoint or political orientation. In the past, a Schwab predecessor charitable fund stopped giving money to charities affiliated with the National Rifle Association when an active investigation was underway. The NRA now appears in DAFgiving360 search results for grant applicants.
Prudent trustees with decision-making authority review indictments against charities before approving donations to them. But the actions of Fidelity, Schwab and Vanguard raise complex questions.
“Why not other charities that have also been attacked by the administration, including many major universities,” Roger Colinvaux, a nonprofit law expert and professor at Catholic University Columbus Law School, said by email. “The incident therefore raises the question of how DAF sponsors draw the line and whether they succumb to political pressure or advance their mission.”
In March, the Justice Department sued Harvard University, accusing it of civil rights violations and saying it “tolerated mobs of anti-Semitic students.” As of this morning, the DAFgiving360 website’s “recommend a grant” page returns numerous options from a search for “Harvard University.”
