The country’s largest sponsor of donor-advised funds has cut off the Southern Poverty Law Center.
Last week, the Justice Department indicted the civil rights nonprofit on charges of committing financial crimes. Many of the center’s supporters immediately went online to donate money to help it fight the federal government.
But Fidelity told its customers, who have over 350,000 charitable giving accounts that allow them to maximize tax savings while giving money to eligible nonprofits, that they could not donate to the center through the accounts anymore.
“Fidelity Charitable is aware of an ongoing governmental investigation into Southern Poverty Law Center,” according to an email it sent to a donor. “Consistent with our grant-making standards and practices, the organization is not an eligible grant recipient during the ongoing investigation.”
Donor-advised funds allow people to donate money — including appreciated investments — to a fund that resembles a personal mini-foundation and take a tax deduction that year.
You don’t have to give the money away all at once. You can parcel it out over time, as long as the entity administering the donor-advised fund is willing to push that donation to the nonprofit recipient. Usually, this is a rubber-stamp approval process for legal nonprofits like S.P.L.C.
A Fidelity spokesman declined to answer questions about how the suspension was applied, aside from pointing to language on its website. The website lists reasons that a grant recommendation “might” be declined, including if an organization “is being investigated for alleged illegal activities or noncharitable activities, such as terrorism, money laundering, hate crimes or fraud,” or if “other state and federal agencies” are investigating a charitable organization.
In 2023, the S.P.L.C. criticized Fidelity and other sponsors of donor-advised funds, including Vanguard, for acting as a “consistent and significant source of income for groups peddling a variety of hateful and extremist beliefs.” It specifically mentioned white nationalist, hard right and anti-LGBTQ+ groups.
In a recent “60 Minutes” interview, President Trump said, without providing evidence, that the racist rally in “Charlottesville was all funded” by the S.P.L.C. “It was done to make me look bad,” he added.
Last week’s indictment accused the S.P.L.C. of fomenting racism by paying informants that worked for hate groups. The organization responded by saying that the federal government had known about the payments and had used the intelligence provided by informants to enforce the law.
A Vanguard Charitable representative did not respond to requests for comment on whether it was barring its account holders from giving to the S.P.L.C. Charles Schwab did not comment; as of Wednesday morning, it was still possible for account holders to request a donation to the group.
Ron Lieber has been the Your Money columnist since 2008. His beat is beating the system.
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