November 27, 2019; CBS News
In a decision following on the heels of challenges to a community foundation that released grants from its donor-advised funds to anti-immigration groups, the Charles Schwab charitable fund has declared it will no longer release grants from its donor-advised funds to charities or nonprofits affiliated with the National Rifle Association (NRA). Such bans are rare, but not without precedent.
This decision does not appear to be directly related to a political stance, but to the active investigations into the NRA and affiliated groups stemming from charges of illegal money transfers between the NRA and its foundation, including an ongoing investigation by the New York state attorney general’s office. There are also, as readers likely know, other issues that have plagued the organization’s reputation, including questions about contracts made with board members and disproportionate spending on a vendor firm. The board and executives have, meanwhile, been engaged in a series of internecine battles.
Also, as we reported back in October, two Democratic senators, Minority Leader Chuck Schumer and Senator Ron Wyden of Oregon, submitted a letter to the IRS questioning the NRA’s fitness to be treated as a 501c4 organization in light of a report released by Democrats on the Senate Finance Committee that explored the notion of the NRA as a Russian asset. As Schumer and Wyden write in the letter, “Russia’s interference in the 2016 elections represented an unprecedented attack on American democracy. In light of the continued efforts of Russia to undermine American democracy, IRS must use its full authority to prevent foreign adversaries from again exploiting tax-exempt organizations to undermine American interests.”
Fred Kaynor, a vice president at Schwab Charitable, says that “like other donor-advised fund providers, Schwab Charitable follows IRS guidance and suspends grants to [nonprofit] organizations that are under investigation. In accordance with this policy, Schwab Charitable is not currently facilitating grants to 501c3 public charities involved in the investigation of the NRA.”
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The dollar amount involved is relatively modest. Only $146,000 in grants have been made by Schwab-held donor advised funds to NRA-affiliated charities in the last three years for which there are 990s. In contrast, $375,000 has been granted from the Fidelity Charitable Fund over the past two years. Fidelity has not made a similar commitment, nor has the National Philanthropic Trust.
For its part, the NRA says Schwab’s position makes no real difference to their organization, which is already suffering from depressed donations after a few years of scandal. “We are disappointed in Charles Schwab’s decision; however, it has no material impact on the NRA, its affiliates, or our mission to protect the Second Amendment,” said Andrew Arulanandam, managing director of public affairs. “Our members appreciate that, unfortunately, not every corporation is fully committed to our cause and freedoms.”
Schwab Charitable is currently based in San Francisco, whose board of supervisors recently declared the NRA a “domestic terrorist organization.”—Ruth McCambridge
Corrections: This article has been altered from its initial form to clarify elements of fact. No donations have gone to the NRA because it is a 501c4. Donor-advised funds can only facilitate grants to 501c3 public charities. A quote from Fred Kaynor regarding Schwab’s stance regarding hate groups has been removed; that statement was not made in reference to the NRA or in response to any question about the NRA.