There is a new development in the Trump administration’s ugly attack on nonprofit advocacy groups.

Fidelity Charitable and Vanguard, two of the biggest sponsors of donor-advised funds (DAFs), on Wednesday blocked clients from using those DAFs to donate to the Southern Poverty Law Center. The action came after last week’s criminal indictment of the SPLC by the US Justice Department, in federal court in Alabama. Donald Trump has since attacked the SPLC in a Truth Social post and a “60 Minutes” interview.  

DoJ charges that the SPLC engaged in financial crimes when it paid informants inside right-wing groups and then allegedly hid those payments from donors and financial institutions. The indictment has been strongly condemned by a wide range of legal experts as an attack that is unsupported by the facts and the law and is based on political animus. The SPLC already has pushed back strongly, asserting the federal government itself used the intelligence provided by the informants. SPLC has hired a strong legal team and has filed a discovery motion in the case.

Fidelity Charitable’s program guidelines provide that grant recommendations by the holders of DAF accounts “are not binding and are subject to review and approval” by Fidelity Charitable’s trustees. 

“Fidelity Charitable is aware of an ongoing governmental investigation into Southern Poverty Law Center,” according to an email it sent to a donor and quoted in the New York Times. “Consistent with our grant-making standards and practices, the organization is not an eligible grant recipient during the ongoing investigation.” 

Vanguard Charitable also rejected a DAF request to donate to SPLC, writing: “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.”

Fidelity’s website says it “might” decline to provide a donation for reasons 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 an organization.  

That is not a mandatory provision, nor do financial institutions have an express legal obligation to block donations based on a criminal indictment, which is, in our legal system, simply an accusation. The SPLC remains an Internal Revenue Service-recognized 501(c)(3) organization eligible to receive tax-deductible grants.

It is possible that Fidelity and Vanguard received explicit threats from some part of the Trump administration, or they just feared the potential consequences of not taking action.

A Vanguard spokesperson told the Times that the institution would block donations in the event of any federal or state criminal indictment and wouldn’t attempt to evaluate the legitimacy of the charges.

The problem is that the second Trump administration now has a clear track record of bringing bad faith criminal charges against political enemies of the President and his allies – cases filed against James Comey, Letitia James, Don Lemon, and others – and grand juries or courts have repeatedly blocked these prosecutions.  So for financial institutions to take action based on these kinds of Trumped-up criminal charges is  not acting neutrally; instead it is unfair ratification of authoritarian abuses of power.   

Imagine if Comey, James, or Lemon was denied a home or car loan, or a credit card or bank account, or were fired from their jobs, because the vengeful Trump Justice Department had indicted them.

Such cowardly behavior by financial institutions could invite more phony indictments of organizations that the administration wants to put out of business. 

Ratifying the prosecutorial abuses of the Trump administration by re-punishing the victims of those abuses is not the kind of prudent, responsible, ethical, adult behavior that should be expected of major financial institutions that value their reputations.

Another major DAF provider, Charles Schwab, as of today is still allowing account holders to request a donation to the SPLC, according to the Times.

Advocates for free speech, social justice, public education, and America’s charities must push back here, pressuring the financial institutions to act appropriately. 

UPDATE 05-01-26:

The DAF connected to Charles Schwab, DAFgiving360, has now also blocked donors from giving to the SPLC, according to a donor who contacted me and a subsequent report in the New York Times.

According to the Times report, Merrill Lynch’s DAF is continuing to facilitate gifts to SPLC because it allows donations as long as the Internal Revenue Service recognizes the group as a charitable nonprofit.

UPDATE 05-04-26:

A donor who sought to make a contribution to SPLC via a Goldman Sachs DAF received a message from Goldman stating in part, “Consistent with the GS DAF Program Circular, GS DAF conducts enhanced diligence where a recommended grantee is subject to a government investigation and retains sole discretion to decline a grant. Accordingly, GS DAF will not process grant recommendations to organizations that are under federal or state criminal indictment, including at this time the Southern Poverty Law Center, though donors remain free to give outside the DAF.” The donor shared the message with Republic Report.