Donor-Advised Funds under pressure from trump
Paul Kinzelman
trump is using his power to punish his opposition.
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-------- Forwarded Message --------
| Subject: | [paulloeb-articles] Donor-Advised Funds Banning SPLC Threatens Democracy |
|---|---|
| Date: | Tue, 5 May 2026 12:16:20 -0700 |
| From: | Paul Loeb via paulloeb-articles list <paulloeb...@npogroups.org> |
| Reply-To: | lo...@soulofacitizen.org |
| To: | paulloeb...@npogroups.org |
Hi Listserv friends—Some of you will have seen this, but, here’s another piece of mine, calling for those of us with accounts at Fidelity, Vanguard or Schwab to pressure them to reverse their compliance with the Trump administration by dropping Southern Poverty Law Center (SPLC) from their list of approved organizations. I’ll be submitting to a couple of outlets more formally, but thought it would be useful to get it into your hands now so you could join the public pressure campaign.
Donor-Advised Funds Banning SPLC Threatens Democracy
By Paul Rogat Loeb
We know the Trump Department of Justice has threatened individuals they consider political opponents. Echoing authoritarian regimes worldwide, they’re now indicted Southern Poverty Law Center (SPLC). In response, major Donor-Advised Funds (DAFs), including Vanguard, Fidelity, and Schwab, have prevented clients from donating to SPLC, cutting the organization off from funding without even a shred of due process. If the DAFs follow this precedent, it could eliminate a key source of funding for any nonprofits this—or any future—administration chooses to attack.
The funds claim their action is necessary because, according to the administration, it constituted fraud for SPLC to have paid hate group informants. But federal and state law enforcement agencies have known about the infiltrations for years, using information they provided to help secure indictments and convictions.
Fidelity justified its actions by citing a policy of pausing DAF giving if an organization “is being investigated for alleged illegal activities…such as terrorism, money laundering, hate crimes or fraud,” or if “state and federal agencies” are investigating a charitable organization. Schwab’s fund quietly removed SPLC from its list of eligible nonprofits, and a representative read me similar boilerplate, saying the fund was deciding on next steps.
The danger is far larger than the SPLC case. The listed criteria would let federal or state authorities cripple any nonprofit they choose, simply by launching an investigation. The organization doesn’t have to be convicted, or even indicted. They just have to be investigated, which makes this a perfect way to target political opponents. The administration has already issued a memorandum promising investigations of groups that promote “anti-fascism,” “anti-Christianity,” or “hostility” toward “traditional American views on family, religion, and morality.” All the federal government, or even a state government, would need to do to launch a DAF freeze is to open an official public investigation. And these major DAFs would then block the targeted organization from receiving funding.
The implications aren’t confined to the Trump administration. Under this precedent, Democrats holding power could do the same to disfavored nonprofits. Just launching an investigation would cut off a significant part of a targeted organization’s money flow. The defunding or banning of targeted NGOs is exactly what Vladimir Putin did in Russia, Viktor Orbán in Hungary, Recep Tayyip Erdoğan in Turkey, and Nicolás Maduro in Venezuela. It’s a classic way to eliminate opposition and consolidate power. And the anticipatory compliance of Vanguard, Fidelity, and Schwab is the exact kind of response that empowers would-be dictatorships, whatever their politics.
If a nonprofit is convicted of fraud or money laundering, it’s of course legitimate to remove or suspend their 501(c)(3) nonprofit status. But SPLC has neither been tried nor convicted, so the DAFs are letting a hostile administration’s mere accusation of wrongdoing become an excuse to block funding. The $326 billion of money that DAFs hold is part of the lifeblood of nonprofits. The actions of these DAFs directly undermine democracy by excluding a group the administration has targeted and potentially denying funding to other targeted groups. That’s true whatever you think of SPLC.
If
there’s a nonprofit that could weather this, it’s SPLC,
with its $786 million endowment. But
if the Trump administration and its enablers can do this
to them, they can do it to far smaller and more vulnerable
nonprofits. For instance, they could target nonpartisan
voter engagement groups, drying up funding (including
pledged contributions) at the point when these groups need
it the most to engage citizens in democracy. Damaging
attacks on nonprofit funding also don’t have to come from
the federal Department of Justice. Under Fidelity’s
criteria, attacks could come from state governments as
well, with potential targets including either conservative
or liberal groups depending on which party runs a
particular state.
But ordinary citizens have the power to change this. The
campaigns that got ABC to reinstate Jimmy
Kimmel offer a model. This issue has less
visibility, but for the nonprofits it could affect is
equally critical. If we have money in a DAF, our calls or
emails could well make the difference. Schwab told me that
they’d been getting lots of critical responses, and
various socially responsible investment advisors have
created a letter where people can sign on here. But even if we don’t
have a DAF, nearly 60% of us have
retirement or other investment accounts, with most housed
at the major affiliated brokerages. So we can reach out as
well, threatening to switch our investments to brokerages
that don’t empower authoritarian initiatives, echoing what people did in the
Kimmel situation when they boycotted the channels,
advertisers, and theme park properties of national
ABC/Disney and local Sinclair and Nextstar stations.
People also protested in front of affiliated ABC
stations—something they could do at the headquarters of
the relevant brokerage houses. While DAFs are technically
separate entities, they share investment management,
administration, and the parent brand, which offers them as
an incentive for clients. So we’re far from powerless. And
if we have resources with a DAF that hasn’t banned SPLC
contributions, like Daffy, it’s important to
reach out and thank them.
The job of the brokerage houses is not to police client
giving. Their affiliated DAFs need to allow donations to
all legitimate nonprofits, whether or not the Trump
administration—or any administration—agrees with what they
do.
Paul Rogat Loeb is the author of Soul of a Citizen and The Impossible Will Take a Little While, with 300,000 copies in print between them. He spent 13 years running nonprofits he founded.
Also please do follow me on social, since it’s another way to distribute these posts: Facebook, LinkedIn, Twitter (if you can stomach it), and Bluesky. I’ll add Instagram at some point.
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