When the Justice Department indicted the Southern Poverty Law Center in April on fraud charges, the civil rights organization faced a threat to its funding not from donors writing checks directly, but from three major donor-advised fund sponsors that each decided to block grants to the nonprofit. Vanguard Charitable, Fidelity Charitable and Charles Schwab's DAFgiving360 froze donations to SPLC without fully explaining their decisions, leaving the organization in the dark about reinstatement options months later.
Donor-advised funds have grown into a dominant force in American philanthropy. These accounts allow account holders to receive immediate tax deductions on contributions while retaining the ability to recommend grants to charities over time. The three sponsors are nonprofits spun off from major brokerages that charge administrative fees and maintain legal control over charitable assets. They can deny grant recommendations for any reason, though they say decisions stem from policy triggers related to investigations or charges against organizations.
What the Left Is Saying
Progressive groups and nonprofit advocates argue that the freeze on SPLC donations represents a dangerous expansion of de facto censorship by financial intermediaries with little accountability. "I don't think Fidelity, Vanguard and Schwab are acting in bad faith," said Joe Goldman, president of Democracy Fund, which supports democratic principles. "They're applying old rules to new circumstances without recognizing that the circumstances have changed." He noted that the current administration's pattern of politically charged accusations against nonprofits differs from traditional investigative standards.
Deone Powell, a former general counsel for Vanguard Charitable who now advises nonprofits, told ProPublica that sponsors view these moves not as moral policing but as brand protection. "All of these really speak to reputational risks for the sponsoring organizations," he said. Nonprofit groups supporting civil liberties argue this logic creates a system where politically targeted organizations face compounding financial pressure without due process.
Advocacy organizations say affected charities are routinely left without explanation, making it impossible to address concerns or seek reinstatement. The SPLC still does not know why the action was taken or what path exists for resuming donations, according to a source familiar with the matter.
What the Right Is Saying
Defenders of donor-advised fund policies argue that sponsors have legitimate reasons to pause grants when organizations face formal charges or investigations. Vanguard Charitable says it pauses payments when an organization faces formal charges, while Fidelity Charitable and DAFgiving360 say they may stop donations if groups come under investigation by government or law enforcement agencies.
The sponsors maintain their decisions are viewpoint neutral and apply consistently across the political spectrum. ProPublica found no evidence that ideology drives funding freezes; removed organizations spanned various perspectives. Supporters argue that nonprofits operating as tax-exempt entities should face scrutiny when federal authorities bring charges, regardless of whether convictions follow.
Some conservative commentators have pointed to investigations initiated by Republican lawmakers since 2025 as appropriate oversight. Members of Congress, mainly Republicans, have launched over 135 investigations into nonprofits, often citing concerns about foreign influence, terrorism support or diversity programs. The sponsors argue they are simply responding to credible governmental action rather than making independent political judgments.
What the Numbers Show
Donor-advised fund sponsors controlled $327 billion in assets as of 2024, according to industry data. This represents more than 10 times their footprint two decades ago. These three Wall Street-affiliated nonprofits serve as a conduit for approximately one-quarter of all individual giving in the United States.
The scale of frozen donations was not disclosed by any sponsor. ProPublica found that Fidelity and DAFgiving360 allowed numerous other organizations to continue receiving money despite government investigations, including hospitals, universities, charter schools and at least one white nationalist organization. This inconsistency has drawn scrutiny from nonprofit watchdogs who question how policies are applied in practice.
A former SPLC employee was indicted this week on charges related to the fraud case against the organization itself, adding complexity to the legal situation facing the civil rights group. Neither of two pro-Palestine charities flagged by Republican lawmakers in letters to the IRS has been charged in court or had its tax-exempt status revoked, yet both no longer appear on Fidelity Charitable's donation portal.
The Bottom Line
The decisions by three dominant philanthropic intermediaries to freeze donations to high-profile nonprofits raise fundamental questions about accountability in American charity. With $327 billion in assets and control over a quarter of individual giving, these sponsors function as gatekeepers whose policies can compound the impact of government investigations without requiring convictions.
What remains unclear is whether policy triggers are applied consistently across different organizations facing similar circumstances. What is clear is that affected charities have little recourse when grants are blocked, creating an asymmetric system where financial intermediaries face few consequences for decisions affecting millions in charitable dollars. Watchers say the next test will be whether sponsors establish clearer standards and communication protocols as scrutiny of their practices intensifies.