Schwab Charitable has suspended customers’ ability to donate to the National Rifle Association through the company's $10 billion donor-advised charitable fund.
Continue Reading Below
According to CBS News, the charitable fund decided several months ago to halt donations to charities with ties to the NRA, one of the most powerful lobbying groups in the U.S. It comes in the midst of a drop in donations to the NRA, as well as allegations that it abused its nonprofit status.
In the past three fiscal years, Schwab Charitable's fund donated $146,000 to NRA-affiliated charities, according to IRS filings.
Attorneys general from New York and Washington, D.C., launched probes earlier this year into whether the NRA illegally transferred money from its nonprofit, the NRA Foundation, to the parent organization. Donations to the nonprofit are tax-exempt, while donations to the NRA itself are not. The NRA has previously said its tax filings are “verified by one of the most reputable firms in the world," and its outside counsel, William A. Brewer III, said the NRA "remains confident in its business practices."
"Like other donor-advised fund providers, Schwab Charitable follows IRS guidance and suspends grants to [nonprofit] organizations that are under investigation,” Fred Kaynor, a vice president at Schwab Charitable, told CBS. “In accordance with this policy, Schwab Charitable is not currently facilitating grants to 501(c)(3) public charities involved in the investigation of the NRA."
“We are disappointed in Schwab’s decision, but it has no material impact on the NRA, its affiliates, or our mission to protect the Second Amendment,” Andrew Arulanandam, managing director of public affairs for the NRA, told FOX Business. “Our members appreciate that, unfortunately, not every corporation is fully committed to our cause and freedoms.”
A donor-advised fund, or DAF, allows individuals to make a charitable contribution, receive an immediate tax deduction and then recommend grants from the fund over time. Money in a DAF can be invested before it’s granted out, but the growth on that money won’t be taxed. Plus, DAFs can reduce tax burdens if an individual receives a sudden windfall of money, like an inheritance, by allowing individuals to take an immediate tax deduction when they make a charitable contribution.
This story has been updated to reflect that the fund is called Schwab Charitable and is independent of Charles Schwab.