Schwab, Fidelity, Vanguard bar SPLC grants from their DAFs

Charles Schwab, Fidelity and Vanguard have prevented grants from the donor-advised funds (DAFs) they sponsor to the Southern Poverty Law Center following the group’s federal indictment in April on counts that include wire fraud, false statements and conspiracy to commit money laundering. The SPLC has pleaded not guilty.

The restrictions apply only to recommendations from DAF accounts the three firms administer. The firms exercised their authority to approve or deny distributions after the indictment was returned.

Financial advisers say the episode highlights a basic legal feature of donor-advised funds: donors can recommend recipients and receive an immediate tax deduction when they contribute assets, but the sponsoring organization retains legal control over whether and when to release money to a particular charity.

Kashif Ahmed, founder and president of American Private Wealth, said many firms want to avoid reputational risk even when legal proceedings are pending. “In this country, you’re still innocent until proven guilty, but I think a lot of companies just don’t want to be exposed to any bad news,” he said.

Jane Searing, managing director in Deloitte Tax’s private wealth practice, said donors have advisory rights only. She said, “You only have advisory privileges. You don’t get to decide where the funds go. You can only advise once it’s in a donor-advised fund, hence the name.”

Advisers recommend that clients review a DAF sponsor’s policies before moving assets into an account. Mark Parthemer, chief wealth strategist at Glenmede, advised donors to check how long assets can sit without distribution, what causes are eligible and whether the sponsor permits international grants. He said those policies vary by sponsor.

Donor-advised funds are commonly used for tax planning. One common tactic, called “bunching,” combines several years of intended charitable gifts into a single tax year so donors can itemize and take a larger deduction, then distribute donations to charities over time. A federal law enacted in July 2025 created a small deduction for cash gifts to public charities: $1,000 for single filers and $2,000 for married couples filing jointly, which can help taxpayers who do not itemize.

DAFs cannot make grants directly to private individuals, and some sponsors limit or prohibit international grants. Donors who need direct individual awards, greater control over timing and recipients, or a permanent public record of giving may use a private foundation instead. Foundations require more administration and public reporting than donor-advised funds.

Advisers tell clients to plan charitable giving several years ahead and to confirm sponsor rules before contributing assets. They also recommend checking both how assets are invested inside a DAF and any potential restrictions on distributions.

The decisions by Schwab, Fidelity and Vanguard prevented those sponsored DAFs from sending recommended grants to the Southern Poverty Law Center while the legal case proceeds.