Fidelity, Vanguard cut off donations to SPLC amid donor fraud case

As the Southern Poverty Law Center (SPLC) faces an indictment on financial crimes charges, two of the country’s largest sponsors of donor-advised funds have cut off the group from receiving proceeds. 

Fidelity Charitable, which manages over 350,000 charitable giving accounts that allows customers to receive tax savings while making donations to eligible nonprofits, said that the center is no longer an eligible recipient. 

An email to a donor read, per the New York Times, "Fidelity Charitable is aware of an ongoing governmental investigation into Southern Poverty Law Center. Consistent with our grant-making standards and practices, the organization is not an eligible grant recipient during the ongoing investigation."

In a similar message issued when denying a grant request, Vanguard Charitable wrote, "The organization has had allegations and/or charges brought against them for activities that may call into question their ability to carry out their tax-exempt charitable purpose." 

A Vanguard Charitable spokeswoman told the outlet that it makes grants  "only to organizations that meet IRS eligibility requirements. If we become aware an organization has been charged with a crime by state or federal authorities, we pause grant-making while the matter is pending."

Fidelity Charitable lists among its reasons a grant recommendation might be declined 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 the organization. 

The SPLC was hit with an 11-count indictment in April that includes six counts of wire fraud, four counts of making false statements to a federally insured bank, and one count of conspiracy to commit concealment money laundering. The organization pleaded not guilty in federal court on Thursday.

Among the allegations against the group is that they paid "field sources" who held roles in groups such as the Ku Klux Klan, Aryan Nations, and the National Socialist Movement, as well as an organizer of the 2017 Unite the Right rally in Charlottesville, Virginia.