Chronicle of Philanthropy: Community Foundations Assail Big DAFs’ Freeze on SPLC Gifts

Published In: Chronicle of Philanthropy

Following the federal indictment of the Southern Poverty Law Center, commercial donor-advised funds froze grants to the SPLC. In response, smaller DAFs urge donors to put their money elsewhere.

Community foundation leaders have expressed outrage that three of the biggest donor-advised fund groups are prohibiting account holders from making grants to the Southern Poverty Law Center, a civil rights nonprofit that is the target of a highly contested criminal indictment, and they are urging donors to remove their funds.

Last week, following the U.S. Department of Justice’s indictment of the Southern Poverty Law Center for alleged donor fraud for paying informants who infiltrated racist extremist groups including the Ku Klux Klan, three donor-advised funds associated with major financial services firms responded quickly. 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 leaders of the San Francisco Foundation and other community foundations that run donor-advised funds of their own roundly criticized the move by the big Wall Street-aligned organizations, calling it a capitulation to the Trump administration, which has been hostile to civil rights nonprofits.

Fidelity, Vanguard, and Schwab are guilty of philanthropic “malpractice” for withholding those grants, said Fred Blackwell, CEO of the San Francisco foundation.

Joining Blackwell were leaders of Assets Under Management, the Cambridge Community Foundation, and Brooklyn Org, the main community foundation in Brooklyn. Each group criticized the move by the commercial sponsors and then announced that donors to those organizations could easily transfer their charitable assets from a commercial fund to a fund run by a community foundation or could make direct gifts to the Southern Poverty Law Center.

Brooklyn Org went a step further and offered to make a $718 donation to a nonprofit in the borough for each account that is transferred over the next month.

Nonprofits that are legally targeted might need the most support from their donors, said Jocelynne Rainey, president of Brooklyn Org. While the matching offers for donors who transfer their funds from a commercial account has been in the works for a while, she said the case against the Southern Poverty Law Center prompted her to announce it early.

“We wanted to make sure that folks knew there was someplace else they can go in order to continue to support organizations that they care about,” she said. “This is when the philanthropic community and the donors that believe in them should be able to support them.”

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