“Image is everything,” tennis pro Andre Agassi told TV viewers in 1989. Today, corporations and businesses still agree. Take Fidelity Investments and its philanthropic arm, Fidelity Charitable, the largest sponsoring organization for donor-advised funds (DAFs) in the United States.
According to the Fidelity Charitable website, using donor-advised funds is “tax-smart giving,” because it allows money “to grow, tax free, while you decide which charities to support.”
During the past decade, this argument has gained significant traction among investors.
“Your corporations have shoveled millions of dollars to hate groups by enabling wealthy individuals to use Fidelity’s donor-advised funds to make anonymous donations to them.”
In fact, the National Philanthropic Trust, a group that provides information about philanthropy to individual donors, foundations, and financial institutions, notes that DAFs are experiencing a huge growth spurt. Contributions went up by more than 20 percent between 2017 and 2018 and the Trust reports that $34.67 billion was distributed to nonprofits in 2020, a 27 percent increase over 2019.
Brooklyn-based philanthropic coach and consultant Marjorie Fine attributes this surge to the anonymity that DAFs offer, a benefit that protects donors from additional funding requests and unwanted publicity. In addition, she says, “the donor can just let the money sit in the DAF account. There is no requirement that it be donated within a set time frame. The donor simply pays an annual fee to the sponsoring organization for administering the fund.”
This suits Fidelity Charitable, a company whose promotional materials crow that it “puts people and relationships first” and trusts its donors to suss out what causes or organizations they wish to support.
“Fidelity is committed to continually strengthening diversity and inclusivity in our workplace and in our communities,” its website boasts. “We believe that building and sustaining this culture is both the right thing to do and a business imperative.”
Indeed, Fidelity Investments’ charitable arm—which last year disbursed $10.3 billion in donor-advised donations to 187,000 charities—has provided money to community-based groups that house the homeless, feed the hungry, shelter people recovering from environmental calamities, and assist foster kids as they age out of the system. What’s more, Fidelity’s DAFs have supported a raft of cultural institutions, from the literary to the artistic.
But a report released at the end of March, “The People Disclose,” compiled by the Massachusetts-based Unmasking Fidelity Coalition, charges that these good works have been tainted by Fidelity Charitable’s financial support of anti-Muslim, anti-LGBTQ+, and anti-immigrant organizations.
And we’re not talking chump change. These groups—including Alliance Defending Freedom, Central Fund of Israel, David Horowitz Freedom Center, Family Research Council, VDARE, and Turning Point USA—have received $35.7 million since 2016 from DAFs managed by Fidelity.
The Family Research Council, for one, works to promote “a Biblical worldview, particularly in areas touching society’s foundational cornerstone, the family.” Fiercely anti-LGBTQ+, the Family Research Council rails against “special privileges for sexual orientation and gender identity.” The group’s efforts have been bolstered by the Alliance Defending Freedom, an overtly evangelical Christian law firm founded in 1993 to litigate in support of abortion restrictions and against marriage equality.
VDARE’s advocacy includes lobbying for the immediate deportation of 115,000 “illegal aliens” per week, a proposal put forward by Representative Paul Gosar, Republican of Arizona. Meanwhile, the Horowitz Freedom Center uses its platforms—Front Page Magazine and Jihad Watch—to demonize Muslims. Its current campaigns further include “stopping the K-12 indoctrination of students,” through so-called Critical Race Theory and programs that encourage diversity, equity, and inclusion in public school classrooms.
For its part, Turning Point USA maintains a professor watchlist to “expose and document college professors who discriminate against conservative students and advance leftist propaganda in the classroom.”
Lastly, the Central Fund of Israel provides support for Gush EtZion, eighteen West Bank communities that Palestinians and anti-Zionists consider illegal settlements.
Michael Aalto, vice president of external communications at Fidelity Investments, does not deny that funding has been provided to these organizations. Nonetheless, he disagrees with the coalition about the DAFs’ responsibilities and obligations.
“As a donor-advised fund sponsor, Fidelity Charitable does not set or limit the values and priorities that guide giving choices for the quarter of a million donors that leverage our platform,” he wrote in an email. The IRS, he continues, determines a charity’s legitimacy and issues 501(c)(3) nonprofit status to those it determines are eligible.
“Fidelity Charitable does not limit grantmaking to specific charitable activities or fields of interest, to specific geographic or demographic criteria, or to specific organizations based on political, religious, or philosophical grounds,” Aalto wrote. He also emphasizes that DAF grants “don’t necessarily reflect the views of, or represent, an endorsement by Fidelity Charitable or the Fidelity Charitable Board of Trustees.”
Unsurprisingly, the Unmaking Fidelity Coalition disagrees. In a 2019 letter to Fidelity CEO Abigail Johnson, coalition members urged the company to screen out organizations that promote discrimination. A 2021 follow-up letter signed by thirty groups—including Color of Change, UltraViolet, and Americans for Financial Reform—was directed to Johnson and to Pamela Norley, president of Fidelity Charitable.
“Your corporations have shoveled millions of dollars to hate groups by enabling wealthy individuals to use Fidelity’s donor-advised funds to make anonymous donations to them,” the letter said. “We demand that you act swiftly and decisively to ban your donor-advised funds from making donations to hate groups.”
Ethan Fauré, research analyst at Political Research Associates and one of the authors of “The People Disclose,” tells The Progressive that the group is continuing to push Fidelity Charitable to change the way it does business by “publicizing the fact that Fidelity profits from facilitating these donations in direct opposition to the company’s professed support for diversity and inclusion.”
“We’re now in the base-building stage of the campaign,” Fauré says. “We’ve distributed flyers outside of Fidelity during lunch hour and are hoping to mobilize Fidelity staff and account holders to demand that Fidelity Charitable stop supporting bigotry and systemic oppression. Fidelity does not need to fund these groups.”
Precedence for this shift already exists. In December 2019, both Fidelity and Schwab Charitable—the two largest DAFs in the United States—agreed that they would suspend donor-advised grants to charities affiliated with the National Rifle Association.
Expanding this to include groups that malign or attack entire classes of people because of their race, ethnicity, religion, national origin, gender, or sexual orientation, Fauré adds, needs to happen now, before DAFs grow to be even more influential and the obfuscation they allow becomes even more pervasive.