The two biggest donor-advised-fund sponsors in the United States, Fidelity Charitable and Schwab Charitable, have banned new donations to 501(c)(3) organizations affiliated with the National Rifle Association, citing reports of Internal Revenue Service investigations into the gun rights group’s network of nonprofits.
Schwab’s ban on donations to NRA-affiliated charities was revealed last week by CBS News. Fidelity’s ban was confirmed to the Chronicle this week by an individual familiar with its policies.
In fiscal year 2018, donors poured $12.3 billion into accounts sponsored by Fidelity and Schwab.
Schwab officials released a statement explaining their decision.
“Like many other donor-advised funds, Schwab Charitable follows IRS guidance and suspends grants to 501(c)(3) organizations that are under investigation, until the investigation concludes and the organization retains its 501(c)(3) status,” the statement reads.
The NRA also released a statement: “We are disappointed in such decisions, however, they have no material impact on the NRA, its affiliates, or our mission to protect the Second Amendment,” says Andrew Arulanandam, managing director of public affairs. “Our members appreciate that, unfortunately, not every corporation is fully committed to our cause and freedoms. The NRA and NRA Foundation continue to enjoy direct support from millions of our loyal members.”
Watching the Situation
It’s unclear how many other donor-advised-fund sponsors are prohibiting gifts to NRA-affiliated nonprofits. Approached for comment, some groups declined to disclose the identities of any groups that may be subject to internal bans on contributions.
Donor-advised-fund sponsor Vanguard Charitable said in a statement it “cannot confirm or deny which organizations are affected by their policies, as they are always taking into account the most current information and things can change quickly.”
Vanguard officials instead pointed to their written policy about grant eligibility, which restricts grants to qualified 501(c)3 organizations.
“If Vanguard Charitable becomes aware that an organization is under investigation by State AG or federal regulatory authorities, ultimately putting the organization’s ability to carry out its charitable purpose in question, Vanguard Charitable will cease grantmaking for the duration of the investigation and will not approve any grants submitted during this time,” the policy reads.
If an organization is identified as potentially engaged in noncharitable activity without a formal investigation in place, Vanguard Charitable officials said they would continue to allow grants to the group, but with additional monitoring to ensure those grants will be used for charitable purposes.
American Online Giving Foundation, a donor-advised-fund sponsor that manages corporate workplace-giving platforms, said it leaves such decisions to its corporate clients.
“We maintain a robust global database of nonprofit organizations that are in good standing, but it is our corporate clients that determine whether those organizations are eligible for inclusion in their respective corporate or workplace giving programs,” said a statement released by American Online Giving Foundation and its affiliated for-profit, Benevity. “We can tell you that many companies exclude the NRA and other controversial organizations from their programs.”
Renaissance Charitable Foundation, another donor-advised-fund sponsor, said that it allows contributions to any charity that is still listed as a 501(c)(3) by the IRS.
“I’m aware of the possible investigation,” said Gregory Baker, president of Renaissance Charitable Foundation in an email. “Our policy is to not police possibilities or maybes. If a legitimate charitable organization is registered and current with the IRS (and the tax code set by Congress), then that organization can receive grants from our DAFs.”
