Hate Groups Are Getting Millions Through Raleigh-Based Fidelity's Nonprofit Charity Fund

From 2015 to 2018, $4.8 million was funneled to hate groups nationwide through Fidelity Charitable, the philanthropic arm of Fidelity Investments; another $2.5 million was given to these groups in 2019 for a total of $7.4 million.

Indy Week/November 24, 2021

By Jasmine Gallup

Tucked at the intersection of Creedmoor Road and Glenwood Avenue sits a nondescript office building. It’s squat, tan, and easy to miss—unless you happened to be driving by two weeks ago, when a group of protestors rallied outside.

Hoisting signs that read “Stop funding fascism” and “Lives are at stake,” the dozen or so protestors tried to draw attention to the national headquarters of Fidelity Charitable, the largest grantmaking organization in the country.

When people think of Fidelity, most think of their 401k or investment portfolio, not Klansmen marching through Charlottesville. But financial records show that the company and white supremacy are inextricably linked.

From 2015 to 2018, $4.8 million was funneled to hate groups nationwide through Fidelity Charitable, the philanthropic arm of Fidelity Investments, according to an investigative report by Sludge. In practice, individual donors give money to Fidelity Charitable, which then disperses that money to groups of the donors’ choice.

Another $2.5 million was given to these groups in 2019 (for a total of $7.4 million), according to the most recent tax records available from the IRS.

The 31 organizations to whom some donors sent their money are deemed hate groups by the Southern Poverty Law Center, which tracks groups that “demean or debase an entire other group of people based on their inherent characteristics,” Heidi Beirich, SPLC director of the Intelligence Project, told Sludge.

The list includes such infamous names as VDARE.com, a website that regularly publishes white supremacist and anti-Semitic rhetoric, and the Alliance Defending Freedom, which equates homosexuality with pedophilia and supports the criminalization of sex between LGBTQ people.

Isabel Walsh, who helped organize this month’s protest, wants to spread the word about where the Fidelity Charitable’s money is going.

“The idea that this could be happening fairly openly without any accountability is at the heart of this campaign,” Walsh told the INDY. “It’s sort of one of those things where you’re like, ‘Wow I never thought about that, but now that I have, that’s startling.’”

As a member of the Unmasking Fidelity movement, which originated in Boston and has now come to the Triangle, Walsh wants Fidelity Charitable to publicly disclose all past contributions to white supremacist and other hate groups.

Local protesters are also demanding Fidelity Charitable redistribute the money to people who are targets of hate groups, as well as develop a screening policy that declares certain groups off-limits for donations.

“There’s such a broad spectrum of places you could donate to and Fidelity’s only requirement … is that they’re a 501(c)(3), which can cover a lot of territory,” Walsh says.

Historically, donor-advised funds like Fidelity Charitable are “cause-neutral,” which means they don’t advocate for a specific cause or disallow giving to specific charities. The group simply ensures money is going to legal 501(c)(3) organizations.

Fidelity Charitable did not respond to INDY Week’s request for comment by the print deadline, but officials have made statements to other news organizations about this policy.

“Fidelity Charitable does not make grants to groups that may be involved in illegal activities, such as terrorism, money laundering, hate crimes, or fraud,” spokesman Stephen Austin told The Chronicle of Philanthropy.

The nonprofit also monitors public records to see if the money is being used for non-charitable purposes, Fidelity Investments Vice President Sophie Launay said in an email to Sludge.

“If there are concerning reports identified regarding a specific charity, Fidelity Charitable documents such reports, and considers the information in the event a grant is recommended to the charity involved.”

But Walsh says existing policies and systems are simply not doing enough.

“You can’t really remain neutral when donors are using a lack of limitations to donate certain ways,” she says. “If Fidelity Charitable estables more stringent guidelines around what kind of places you can donate to, that can be a way to redirect funds to places that will be explicitly helpful.”

What is a donor-advised fund?

Ultimately, Fidelity Charitable helps more people give more money to charity more easily. As a donor-advised fund, it can help people donate not just cash, but also stocks, private business interests, or other assets that can’t be traded publicly. By giving to Fidelity Charitable, donors avoid taxes that would cut into their gift.

But in addition to helping give more money to charity, the nonprofit also allows donors to maintain anonymity, perhaps making them feel more at ease when donating to hate groups. The nonprofit targets big money donors like business owners and entrepreneurs.

In 2019, more than 200,000 people gave money to charity through Fidelity Charitable, donating about $5.2 billion in total to groups like the American Civil Liberties Union (ACLU) and Sierra Club Foundation. About .05 percent of that money went to hate groups that were chosen by donors.

Still, that .05 percent adds up. In 2019, the $1 million given to the Alliance Defending Freedom constituted 2 percent of their overall donations, a small but significant percentage. Add in the money given to the Alliance from other donor-advised funds like Schwab Charitable Fund and Goldman Sachs Philanthropy Fund, and you get another $500,000. That’s before counting the thousands of other donor-advised funds across the country.

As the largest grantmaking organization in the country, Fidelity Charitable has a significant impact on where donations go. By continuing to include hate groups in their list of eligible charities, the nonprofit is propping up these organizations, allowing them to continue spreading vitriol that can, indirectly, lead to discriminatory laws and even hate crimes.

What makes a non-profit a charity?

While the work Fidelity Charitable is doing isn’t all good, the controversy over donor-advised funds reveals a much larger problem.

Fidelity Charitable, like AmazonSmile and other philanthropic organizations, is designed to do good by giving to nonprofit organizations. So why are some hate groups classified as 501(c)(3) nonprofits?

The Israelite School of Universal Practical Knowledge, for example, is a prominent general hate group operating as a nonprofit. The group, which is anti-LGBT and anti-Semitic, has six chapters in North Carolina—in Durham, Charlotte, Greensboro, Winston-Salem, Fayetteville, and Greenville.

William Gheen, president of anti-immigrant hate group Americans for Legal Immigration (or ALIPAC), also runs a nonprofit out of Raleigh dubbed the American Defense Network. Billed as a community engagement organization, the group publishes anti-immigrant rhetoric and spreads the word about ALIPAC fundraisers. Because it’s a 501(c)(3) organization, it’s Facebook page includes a “Create a Fundraiser” button that allows users to raise money for the group.

Likewise, the hate groups that receive money from Fidelity Charitable mostly characterize themselves as conservative research centers and advocacy organizations. They claim to defend threats to American freedom and religious liberty. In reality, they’re severely anti-immigrant, anti-Muslim, and anti-LGBTQ, spreading milatiristic rhetoric about the need for people to fight for white, heterosexual United States.

Critics of the Southern Poverty Law Center’s Hate Map argue the organization is simply against conservatism. There are dozens of conservative organizations, however, that are not categorized as hate groups by the SPLC, including many that support Zionism, support tighter restrictions on immigration, and oppose same-sex marriage.

In order to make SPLC’s list, a group has to reach a level of radicalism equivalent to the KKK or Proud Boys. It’s worth noting, however, that many of the hate groups classified as nonprofits have not historically been recognized as threats by the United States or its leaders.

The U.S. government has been mostly passive in the face of anti-Muslim sentiment, which reached an all-time high after September 11, 2001. Following the attacks, many people conflated traditional Islam with radical groups like al Qaeda.

Government surveillance of Muslim communities, which was conducted under the veil of fighting terrorism, only exacerbated the problem. Islamophobia continues to this day, as groups like the David Horowitz Freedom Center—which received more than half a million dollars through Fidelity Charitable in 2019—spreads anti-Muslim rhetoric in the name of national security.

The U.S. has also been relatively accepting of white supremacy, especially after Donald Trump was elected in 2016, enabling political leaders to openly share anti-immigrant and anti-Black sentiments. Likewise, homophobic comments have routinely been made by lawmakers and officials—one of the most recent scandals arose in North Carolina when Lt. Gov. Mark Robinson called homosexuality “filth.”

Fidelity Charitable is a big company that is helping give a lot of money to hate groups, but the real problem here is a loophole in the tax code governing nonprofits. “Where is the money going?” is a question we should all start to ask.

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