Fidelity Investments Charitable Gift Fund

Background

Fidelity Charitable was established in 1991 as a public charity related to financial services firm Fidelity Investments. ¹ In recent years, the fund has grown substantially, reporting just over $3 billion in grants disbursed in 2015 and 2016. ² The fund has continued to grow, distributing $5.2 billion in grants in 2018 and a record-setting $7.3 billion in grants in 2019. ³ In 2016, Fidelity Charitable surpassed United Way as the largest fundraising charity in the country. ⁴ Three years later, Fidelity Charitable surpassed the Gates Foundation to become the largest charitable grantmaking organization in the United States. ⁵ Since 1991, Fidelity Charitable has distributed over $40 billion in grants to over 300,000 different charities. ¹

Fidelity Charitable was the first commercial provider of donor-advised fund (DAFs) and today manages fund accounts for nearly 250,000 donors. ¹ When individuals make a contribution to a DAF account, they become eligible for immediate tax deductions. ⁶ Fidelity Charitable then disburses grants to charities recommended by the donors of each account or invests those funds for tax-free growth which can then be donated to “virtually any IRS-qualified public charity,” either immediately or over time. ⁶ Because Fidelity Charitable disburses grants to almost any charity recommended by individual donors, contributions are spread across thousands of charities with varied political and religious leanings.

Activities

Fidelity Charitable Trustees’ Initiative

Aside from managing DAF accounts, Fidelity Charitable also runs its Trustees’ Initiative, a grantmaking program that is separate from the DAF program. ⁷ The Trustees’ Initiative makes direct grants to improve social sector infrastructure, giving to various nonprofits that promote shared research, networks, and information that maximize donor and nonprofit impact. ⁷

Since its foundation, the Fidelity Charitable Trustees’ Initiative has given over $34 million in direct grants to nonprofits, including $6.4 million in 2019 alone. ⁷ These include grants to databases including GuideStar, Charity Navigator, and VolunteerMatch. ⁸

COVID-19 Pandemic Response

In spring of 2020 when the COVID-19 pandemic reached the United States, Fidelity Charitable created a list of organizations with an immediate need for funding as a guideline for donors looking to increase charitable giving. ⁹

In April 2020, Fidelity Charitable launched an initiative which challenged donors to double their donations to reach $200 million by May 5 in order to respond to the pandemic. ¹⁰ In March of 2019 alone, Fidelity Charitable donors recommended more than $100 million in grants from DAF accounts be made to 4,500 nonprofits dedicated to pandemic response. ¹⁰ Fidelity Charitable reported an increase of 36% of grants in March 2020 when compared to March 2019. ¹⁰

In addition to launching a donor challenge, Fidelity Charitable conducted a study of American donors at large in response to the pandemic. The study found that 79% of donors planned to increase or maintain their giving in the wake of the pandemic, but 47% of volunteers said that the amount of time they volunteer will decrease or stop as a result. ¹¹

Proposed Donor-Advised Fund Regulation

In recent years, donor-advised funds have been criticized as “warehouses” of wealth which allow powerful individuals to get immediate tax breaks on donations without having to disburse those funds to charity on any regular schedule if at all. ¹² Fidelity Charitable, alongside other DAFs, has been criticized for having a “perverse” incentive to keep funds in accounts, rather than disbursing it to charity, given that Fidelity Charitable earns management fees on the money in the DAF accounts. ¹² In 2019 alone, Fidelity Investments received nearly $60 million in revenue generated by fees from DAF management and invested approximately 60% of donor money into other Fidelity funds. ¹³ In 2016, Fidelity Charitable distributed just 18% of its total assets to charitable organizations. ²

In response to these criticisms, various states have considered regulations on DAFs, including Fidelity Charitable. In January 2020, the California state legislature passed Assembly Bill 1712 through committee, which would require greater financial disclosure from DAF accounts. ¹⁴ The bill, if passed, would require that DAFs disclose the details of how often accounts sit on donated funds without actually disbursing the funding to charity, which could provide hard evidence for the often-volleyed criticism of DAFs being used as indefinite tax havens disguised as philanthropic endeavors. ¹⁴ Proponents of DAF regulation also argue in favor of establishing a five-percent minimum payout from all accounts. ¹⁴

The bill sparked a heated battle in California, with the Fidelity Charitable expressing opposition to the proposal while the powerful nonprofit advocacy group CalNonprofits stated its support. ^{14 15 1617} Less than a week after the bill was introduced in the Assembly, it was pulled from the floor. ¹⁸

Controversy

Lawsuit for Alleged Breach of Contract

In May 2019, investment moguls Emily and Malcolm Fairbairn brought a lawsuit against Fidelity Charitable, alleging that their $100 million gift to Fidelity Charitable was mishandled. ¹⁹ The lawsuit charges Fidelity Charitable with breach of contract, misrepresentation, and negligence. ²⁰

In 2017, the Fairbairns’ $100 million donation included shares of Energous, a wireless charging technology company with substantial recent appreciation. ¹⁹ The lawsuit alleges that the Fairbairns were promised that Fidelity Charitable would sell the shares over time and not let any sale exceed 10 percent of the daily trading volume, in order to maintain the value of the shares. ¹⁹ Fidelity Charitable sold all of the shares on the day they received them, resulting in a $5 million total loss from the sale of the shares due to the price per share dropping by nearly $8 from the beginning to end of trading in a single day. ²⁰

A spokesman for Fidelity Charitable responded that it is the Fund’s policy to sell any securities as soon as they are received, and that the Fairbairns were informed of that policy when they made their gift. ¹⁹ Lawyers for the Fairbairns disputed the claims, alleging that Fidelity Charitable told the couple that their stock would be sold gradually in order to maintain the price. ¹⁹

Fidelity Charitable filed a motion to dismiss the suit in the United States District Court for the Northern District of California. ²¹ Judge Jacqueline Corley denied the motion to dismiss, allowing the case to proceed. ²¹ In March 2020, Fidelity Charitable moved to receive a ruling from a magistrate ahead of moving to trial. ²² Fidelity Charitable’s motion was denied on March 2, and the court granted the Fairbairns’ motion to reject some of Fidelity’s legal defenses, including an argument that the Fairbairns couldn’t bring claims on the grounds that Emily Fairbairn used non-public information to manipulate stock price. ²² The case has yet to go to trial as of April 2020.

Lack of Transparency in Executive Pay

In 2015, Fidelity Charitable faced controversy over lack of transparency in executive pay. ²³ Rather than paying executive officials directly (and being thereby forced to report their compensation on public tax documents), Fidelity Charitable paid FMR LLC, the parent company to Fidelity Investments. ²³ In return, FMR LLC, a private company, paid Fidelity Charitable executives. ²³ In 2015, Fidelity Charitable paid $32,548,005 to FMR LLC. ²³ Fidelity has not since changed its policy, paying FMR LLC $46,250,730 in 2016. ²

Criticisms from the Left

Fidelity Charitable maintains a policy which states that it is “cause neutral,” meaning that it does not deny grants recommended by donors based on the ideology of the recipient organization. ¹³ Fidelity Charitable will only deny donations to organizations which are not in good standing with the United States IRS. ¹³

Although Fidelity Charitable gives donors near total discretion over the disbursement of their gift accounts, the Fund has nonetheless been relentlessly attacked by left-of-center organizations for supporting alleged “hate groups” as designated by the radical, left-wing Southern Poverty Law Center (SPLC). The SPLC list includes mainstream conservative organizations, including the Alliance Defending Freedom (ADF), the Pacific Justice Institute, and the Family Research Council. ²⁴

These criticisms ignore the fact that Fidelity Charitable does not exercise any control over disbursements from DAF accounts, instead allowing individual donors to exercise discretion over their gifts. In fact, Fidelity Charitable has made large contributions to left-of-center organizations as well, including millions of dollars of contributions to the SPLC itself. ^{25 26} The criticisms are primarily leveled by left-wing publication Sludge, specifically by radical journalist Alex Kotch.

Anti-Abortion Funding

From January to June of 2019, five states passed new measures designed to limit abortions. ²⁷ In June of 2019, left-wing publication Sludge published a report claiming that state and national groups spent millions on lobbying to pass “abortion bans,” detailing where twenty pro-life groups received their funding. ²⁷

Sludge criticized Fidelity Charitable for providing $890,000 in funding between 2013 and 2017 to 14 organizations which Sludge deemed to be anti-abortion. ²⁷ The report further criticized Fidelity Charitable for providing funding to the ADF, though the ADF was not directly linked to any of the pro-life bills which passed in early 2019. ²⁷ Between 2013 and 2017, Fidelity Charitable gave $1.75 million in grants to ADF. ²⁷ The report also condemned donations made from Fidelity Charitable to the Charlotte Lozier Institute Legal Defense Fund ($638,125), National Right to Life ($77,913), and Concerned Women for America ($82,775). ²⁷

Southern Poverty Law Center (SPLC) “Hate Group” Controversy

In February 2019, Sludge released an expose accusing Fidelity Investments Charitable Gift Fund of “funneling millions to hate groups from anonymous donors.” ²⁸ The report alleged that the Fund was part of a group of four DAFs which gave over $10 million to 34 “hate groups,” as determined by the controversial, left-wing Southern Poverty Law Center (SPLC). ²⁸ This list includes mainstream conservative organizations, including the ADF and the Family Research Council which received $2.7 million and $548,000 from the DAFs respectively between 2014 and 2017. ²⁸

Fidelity Charitable defended itself from the allegations, noting that donors exercise control of their funds and explaining that if there are concerning reports regarding a specific charity, Fidelity Charitable considers those reports before giving a grant to the organization. ²⁸

One month later, following the release of the Sludge report, 20 left-of-center foundations and philanthropists launched a campaign called “Hate Is Not Charitable” in an effort to pressure the charities named in the report to implement policies which would bar donations from DAF accounts to nonprofits considered by the SPLC to be hate groups. ²⁸ Supporters of the coalition include radical, left-wing organizations including Race Forward, the Liberty Hill Foundation, and the Amalgamated Charitable Foundation, a provider of DAFs associated with the SEIU-controlled Amalgamated Bank. ²⁹

In November of 2019, Sludge took further aim at Fidelity Charitable, accusing it of funding an “anti-immigrant hate group” responsible for spreading “white nationalist ideas.” ³⁰ The charge came as part of a larger report against the Foundation for the Carolinas, a charity which donated $900,000 to the Center for Immigration Studies (CIS) in 2016. ³¹ The CIS, which pushes for restrictionist immigration policies and frequently consults with the Trump administration on immigration policy, has been deemed a hate group by the SPLC. ³¹

Fidelity Charitable paid out just $19,000 to the Center for Immigration Studies (CIS) between 2016 and 2018. ³¹ Sludge alleged that CIS promotes “racist arguments” which are responsible for the El Paso mass shooting which killed 22 people in August 2019. ³¹

SPLC 2026 Indictment

In April 2026, Fidelity Charitable announced it would suspend all services towards processing donations to the SPLC after a Grand Jury in Montgomery, Alabama indicted the group on 11 counts of wire fraud, bank fraud, and conspiracy to commit money laundering. In addition, the U.S Department of Justice (DOJ) accused the group of using donations to fund extremist groups it was reporting on including the Ku Klux Clan and the National Socialist Party of America. ^{32 33}

Council on American-Islamic Relations (CAIR) Controversy

In May 2019, the Council on American-Islamic Relations (CAIR) published a report alleging that more than 1,000 American nonprofit foundations donated $125 million to purportedly anti-Muslim organizations from 2014-2016, including Fidelity Charitable, which gave $8.7 million. ³⁴ CAIR report authors alleged that the groups, including Fidelity Charitable, were funding what they called the “Islamophobia Network.” ³⁵

CAIR claimed that the organizations which had donated to any of 39 groups deemed “anti-Muslim” by CAIR share “an ideology of extreme anti-Muslim animus and work with one another to negatively influence public opinion and government policy about Muslims and Islam.” ³⁴ The report went so far as to call the “Islamophobia Network” an “institutional feature of American philanthropy.” ³⁴ The so-called Islamophobia Network included mainstream political organizations, including the American Islamic Forum for Democracy (AIFD), an organization created by and for American Muslims which opposes Islamism, the ideology that ties the Muslim faith to an Islamic political state. ^{36 37}

Accusations of Sexism

In July 2021, Inside Philanthropy accused Fidelity Charitable of inadvertent sexism in its 2021 Women and Giving report. ³⁸ According to Inside Philanthropy writer, Dawn Wolfe, Fidelity Charitable examined female charitable giving “like the character Barclay’s holodeck fantasy about Counselor Troi in ‘Star Trek: The Next Generation.’”³⁸ Fidelity Charitable’s report gave information on gender discrepancies in charitable giving. The report concluded that women are more likely to make non-monetary charitable contributions through volunteering, item donation, and choosing to shop at sustainable or charitable organizations rather than through charitable investments or microloans. ³⁹ Inside Philanthropy admits that the information in Fidelity Charitable’s report is reputable but claims that “the lovely gender essentialist framing” decreased the academic value of the report. ³⁸

Leadership

Jacob Pruitt is the president of Fidelity Charitable, serving in the role as of October 2021, replacing Pamela Norley. ⁴⁰ Pruitt previously served as Head of Workplace Investors and Donor Advised Funds at T. Row Price from 2014-2021, a multi-national investment firm. He also was Regional Head of Asset Management for The Vanguard Group from 2007-2014. ⁴¹  Vanguard has been a subject of controversy for its investments in mainland China, with Vanguard returning $21 billion in assets to government clients in 2020. ⁴²

Financials

According to its 2022 990 form, the organization reported a revenue of $19,858,151,933, expenses at $11,634,379,981, and total assets of $48,314,187,764. ⁴³

Funding

According to their 2024 giving report, Fidelity Charitable gifted roughly $11.8 billion in over 2,340,165 unique grants during the fiscal year 2023. Several of the top organizations that received grants include: ⁴⁴

1. Doctors Without Borders USA
2. St. Jude Children’s Research Hospital
3. American Red Cross
4. The Salvation Army
5. Habitat for Humanity
6. Planned Parenthood
7. United Way
8. World Central Kitchen
9. The Nature Conservancy (TNC)
10. Alzheimer’s Association
11. Wikimedia
12. Pan-Mass Challenge
13. Tunnel to Towers
14. American Cancer Society
15. United States Fund for UNICEF
16. Southern Poverty Law Center (SPLC)
17. YMCA
18. American Civil Liberties Union (ACLU) Foundation
19. Samaritan’s Purse
20. International Rescue Committee