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 because it was convicted or lost its tax-exempt status, but because three major donor-advised fund sponsors each decided independently to prevent donors from directing money to the nonprofit. Vanguard Charitable, Fidelity Charitable and Charles Schwab's DAFgiving360 declined to fully explain their decisions, leaving the SPLC unable to determine why the actions were taken or how it might seek reinstatement.
Donor-advised funds have grown into a major force in American philanthropy. As of 2024, these sponsors controlled more than $327 billion in assets — over 10 times their footprint two decades ago — and serve as the conduit for roughly one-quarter of all individual charitable giving in the United States. The three sponsors are nonprofit organizations that spun off from major brokerages. They offer account holders immediate tax deductions on contributions while retaining legal control over where grants ultimately go, allowing donors to "advise" but not direct distributions.
What the Left Is Saying
Progressive advocates and Democratic-leaning charitable organizations say the timing of these decisions under the Trump administration raises serious concerns. "They're applying old rules to new circumstances without recognizing that the circumstances have changed," said Joe Goldman, president of Democracy Fund, a foundation supporting democratic principles. He was referring to what he described as a pattern of politically charged accusations against nonprofits that often do not hold up in court.
Critics on the left note that President Trump has publicly alleged many charities "undermine the security, prosperity, and safety of the American people" while directing federal agencies to align funding decisions with administration priorities. Since 2025, Republican members of Congress have initiated more than 135 investigations into nonprofits, often claiming organizations were operating with foreign influence or promoting diversity, equity and inclusion initiatives.
Organizations targeted by these investigations span a range of causes, including groups supporting pro-Palestine efforts that received letters from Republican lawmakers accusing them of funding terrorism. Neither organization mentioned in those letters has been charged in court, and neither has had its IRS status revoked — yet both no longer appear on at least one Fidelity Charitable donation portal. Left-leaning watchdogs argue this creates a chilling effect where nonprofits face consequences based on unproven allegations rather than actual legal determinations.
What the Right Is Saying
Defenders of donor-advised fund sponsors argue these are private nonprofit organizations with every right to establish and enforce their own policies regarding grant distributions. "All of these really speak to reputational risks for the sponsoring organizations," said Deone Powell, a former general counsel for Vanguard Charitable who now advises nonprofits. He noted that sponsors view these decisions not as moral policing but as prudent stewardship of their charitable assets.
Conservative commentators have long argued that some large nonprofits — particularly those engaged in advocacy — should face greater scrutiny over their activities and funding sources. Republican lawmakers investigating charities have pointed to concerns about foreign influence, potential support for terrorist organizations, and what they describe as misuse of tax-exempt status for political campaigns.
Supporters of the DAF sponsors' actions note that these organizations publicly state their policies apply regardless of viewpoint — and ProPublica found no evidence that decisions are made based on ideology. The groups removed span the political spectrum, though most affected organizations reported receiving no explanation from sponsors about why they were deemed ineligible for grants. This transparency concern is one area where even some conservative voices have expressed discomfort with the current system.
What the Numbers Show
Donor-advised fund sponsors controlled $327 billion in assets as of 2024, according to industry data. This represents a more than tenfold increase from two decades earlier. The three major sponsors examined by ProPublica — Vanguard Charitable, Fidelity Charitable and DAFgiving360 — collectively represent a significant share of this market.
The SPLC case is not an isolated incident. ProPublica's investigation found that while Fidelity Charitable and DAFgiving360 froze donations to the civil rights organization amid government charges, they allowed numerous other groups facing government investigations to continue receiving money through their platforms. These included hospitals, universities, charter schools and at least one white nationalist organization — organizations under some form of official scrutiny that were not blocked from receiving funds.
Since 2025, Republican members of Congress have initiated over 135 investigations into nonprofit organizations, according to a count of public records. This represents a significant increase in congressional oversight activity targeting the charitable sector compared with previous years.
The Bottom Line
The Southern Poverty Law Center remains without answers months after being cut off by major donor-advised fund sponsors, unable to determine what triggered the decisions or whether there is a path to reinstatement. A former employee was recently indicted on related charges, meaning the legal pressure on the organization continues.
For nonprofits across the political spectrum, the episode illustrates growing dependence on a small number of gatekeepers who control access to a substantial share of American charitable giving. With $327 billion in assets and roughly 25% of individual giving flowing through these platforms, questions about consistency, transparency and accountability in grant decisions carry significant implications for the sector.
Watch for whether affected organizations pursue formal appeals processes — if any exist — or whether policymakers take up legislation requiring greater disclosure from donor-advised fund sponsors. The SPLC has not publicly disclosed details of its efforts to restore eligibility, but advocates on both sides say they expect more nonprofits will face similar situations as federal investigations into the sector continue.