New Orleans        This is a problem in the Age of Trump.  Three big outfits that handle huge numbers of donor advised funds and process donations to qualified nonprofits, Fidelity, Vanguard, and Schwab all announced that they were now refusing to handle donations to the Southern Poverty Law Center, the well-known civil rights and anti-Klan organization headquartered in Montgomery, Alabama.

Their excuse was that Justice Department has fomented some charges against the organization, alleging mail fraud and other claims based on the fact that they paid some informers to infiltrate hate groups, like the Klan and others in the past.  This just sounds specious.  In the first place a spokesperson for SPLC says they have done this in the past, but not currently. I’m not even exactly sure why having paid informers is even illegal?  In the second place, the Trump Justice Department has become the president’s department of revenge for one perceived slight after another or for his self-declared enemies, most of which have failed, and in some cases were not able to even get grand jury indictments.  What makes anyone think this is real?  Far right groups have complained for years about being labeled “hate” groups by the SPLC.  This seems like governmental payback and throwing a bone to these groups from Turning Point to worse.  Finally, what happened to innocent until proven guilty, not that that principle hasn’t fallen into disuse in the current flesh-eating machine.  It’s hard not to believe the big boys in this field aren’t simply affair of angering the administration while hiding behind a fictions claim of due diligence.

Now the SPLC is huge operation, so this is not a fatal blow as it might be to a smaller feisty nonprofit.  They are tax-exempt, so contributions can be sent to them directly.  Reading this I reached out for Drummond Pike founder and longtime CEO of the Tides Foundation, which pioneered the use of donor advised funds under its stewardship for progressive purposes.  I had been on the board from its founding for thirty years and though he has been retired for more than a decade, I knew he still knew people.  He answered that he had already reached out.

Donor advised funds are not without issues and controversy.  Since there is no requirement of annual or any contributions from the donor, they can’t resist the accusation that they are simply a tax dodge shelter for the rich.  The rules are that they lose ownership and control of the money, surrendering the money to community foundations like Tides or these giant financial operations.  The donor is allowed to advise on how contributions would be made or at least that’s how it is supposed to work.  It is unclear why Vanguard, Fidelity, and Schwab think they have the right to preemptively deny a donor’s request?

Maybe the progressive rich, if that’s not an oxymoron, need to move their DAFs from those folks to Tides or other friendlier community foundations?  Vanguard Charitable and Schwab’s DAFgiving360 say they allow transfers to other charities.  A recent lawsuit reported in the Journal indicates there are some caveats on that score.  A lawsuit by a successor to a donor filed suit against WaterStone, a Christian Community Foundation, which cut off communication on requested distributions from $21 million they were holding in the family’s DAF.  Financial advisers will be following this case and reading the paperwork carefully on future placements, but anyone trying to do good, rather than just avoid taxes, might look for friendlier homes for their money, given what is happening to SPLC and could happen to many others as we speed towards autocracy in America.