Donations to Catholic Diocese of Spokane, Salvation Army through group also funding far-right interests draws scrutiny

A Virginia-based charity that facilitated donations to the Catholic Diocese of Spokane and the local chapter of the Salvation Army in 2020 also handled funds that were given to groups espousing white nationalist views and one group that helped organize a rally before the Jan. 6 attack on the U.S. Capitol.

Both kinds of donations from DonorsTrust, an organization that accepts tax-deductible gifts and facilitates their anonymous awarding to other groups nationwide, demonstrate the complicated nature of giving under federal tax laws. They should also prompt discussions among recipients and DonorsTrust about whether giving to groups espousing hate and violence undermines the charitable intent of other funds under their umbrella, said Mark Hurtubise, the former president of the Innovia Foundation who blew the whistle on that Spokane group’s own charitable practices.

“I don’t think it’s their obligation to take every donation and figure out its source,” said Hurtubise of the church and the Salvation Army, which received donations totaling $25,500 and $10,000, respectively, overseen by DonorsTrust. But once aware of the charity’s ties to giving to groups with hateful motives, he said, “they need to have a discussion” about whether a continued relationship is appropriate.

The donations to the two local charitable organizations make up a small fraction of DonorsTrust’s $180 million in giving in 2020, according to a tax filing first obtained by CNBC and linked to Spokane by the news outlet National Catholic Reporter earlier this month. That document also contained evidence of giving, through what are known as “donor-advised funds,” to a group called VDARE, whose founder has espoused white nationalist views, and the Tea Party Patriots Foundation, a Georgia-based organization that helped organize the rally featuring President Donald Trump before some attendees violently breached the Capitol Building. DonorsTrust paid out $75,000 to the VDARE Foundation in 2020, according to the tax filing, and $250,000 to the tea party group.

In response to questions about whether DonorsTrust would reconsider their giving to such groups in the future, the charity’s president issued a statement touting the total giving of the organization and that donor recipients have met all legal requirements.

“At DonorsTrust, we believe passionately in protecting philanthropic freedom and donor intent. Sometimes that means supporting efforts in the marketplace of ideas where there may be disagreement,” said DonorsTrust President Lawson Bader in the statement. “Our account holders use their own time and treasure to address problems as they see them, provide physical and emotional relief, advance knowledge, and, in general, contribute to efforts that enable our collective civic society to flourish.

“Since its founding in 2001, DonorsTrust has distributed more than $1.6 billion to thousands of institutions focused on science, medicine, religion, public policy, the arts, civics, and health,” the statement continues. “This support reflects our core belief in preserving donor intent and donor freedom to support charities that align with our client’s diverse interests and are in good standing with and approved by the IRS to be a 501(c)(3) charitable organization. If at any point, this status is revoked, such entities would no longer be eligible for contributions from DonorsTrust or any other donor-advised fund.”

Donor-advised funds allow a giver to deposit an amount of money with a charity that is immediately tax-deductible, and the donor can then make recommendations about how that money is distributed over time.

Neither the church nor the Salvation Army gave any money to DonorsTrust, and their donations came from donors who recommended the gifts but who may have no connection to the other foundations to which DonorsTrust dispensed funds. DonorsTrust describes itself as an organization that “supports charities and sponsor(s) programs that promote liberty” in tax filings with the IRS. Both the diocese and the Salvation Army issued statements in response to questions for this story indicating they were aware of the donations, but downplaying any connection between their own receipts and the motives of any other donor.

“Donations are routed to us through a variety of means, including checks from a financial institution on behalf of a donor,” a diocese statement read. “The donations in question are within a normal tithing range of some of our parishioners and would not stand out as unusual or influence our decision-making.”

“Thank you for sharing this information with us; our development team confirmed that TSA Spokane has received some funding from Donors Trust, a donor advised fund,” Brian Pickering, director of communications for the Salvation Army in Spokane, wrote in an email. “It is not common practice in our development work to evaluate or conduct further background research on donors that support us via Donors Trust; to my knowledge we accept all funding that helps us serve those in need.”

DonorsTrust, and several of the entities for which it handles donations, is established under tax code as what’s known as a 501(c)(3) group, referring to the specific provision in federal law granting it tax-exempt status and allowing the charity to keep its donors anonymous. Such groups may engage in some political activity, but a majority of their work must not be intended to influence policy.

That might explain why groups such as DonorsTrust handle donations for churches and other civic organizations, said Travis Ridout, the Thomas S. Foley Distinguished Professor of Government and Public Policy at Washington State University who studies political giving and spending.

“I didn’t find it particularly surprising,” Ridout said of DonorsTrust’s activity. “These groups that are involved in politics, if they want to remain dark money groups and keep that tax-exempt status, they have to at least pretend that really their primary purpose isn’t political, and may donate to nonpolitical groups as well as the political groups.”

Among the donations DonorsTrust lists on its tax forms is a $50,000 gift to support research into new therapies for Alzheimer’s patients and $10,500 for air purifiers intended to reduce the risk of COVID-19 at a private Christian school in Wisconsin. But there are also donations to groups intended to influence public policy, including the Freedom Foundation, a nonprofit think tank with offices in Olympia, and the unaffiliated Idaho Freedom Foundation, a conservative, libertarian think tank that issues a so-called “Freedom Index” ranking of Gem State legislators on their willingness to expand government.

The Idaho Freedom Foundation did not provide an on-the-record statement regarding their relationship with Donors Trust. The Freedom Foundation in Washington, which has two registered lobbyists working at the state Capitol in Olympia, said in a statement that it accepted donations based on its mission.

“The Freedom Foundation is supported by thousands of donors around the country who give generously because they believe in our mission to free public sector employees from government unions,” wrote Ashley Varner, vice president of communications and federal affairs for the foundation, in an email. “We do not comment on what else those donors also choose to support.”

The political affiliations behind the groups receiving donations from DonorsTrust also aren’t monolithic, and the causes are wide-ranging. There’s a $10,000 donation to the Marijuana Policy Project Foundation, which supports the work of those seeking to reform cannabis laws in the United States. Some of the money for the local diocese was routed directly to Our Lady of Lourdes Cathedral, the downtown church that saw some of its parishioners actively campaign against a downtown Spokane marijuana shop that opened nearby in 2016.

Hurtubise said that in addition to the organization overseeing the funds, the IRS has a duty to re-evaluate whether those groups receiving tax-exempt status meet the legal definitions contained in federal law for such a designation. An analysis of DonorsTrust and other organizations overseeing donor-advised funds by the nonprofit investigative news outlet Sludge found that hundreds of thousands of dollars were being funneled to groups expressing anti-Muslim, anti-immigrant and anti-LGBTQ sentiments.

It was a donation to VDARE, the same white nationalist group that received some money from DonorsTrust, that prompted the Innovia Foundation to adopt a policy statement prohibiting donations to groups espousing hate, Hurtubise noted.

“What these monolithic commercial foundations are doing is taking the position they’re cause-neutral,” Hurtubise said. “When you know a check is going to an anti-Muslim group, you can’t say we’re cause-neutral.”

Hurtubise and others have called for Congressional hearings into IRS oversight of these tax-exemption determinations. He points specifically at a requirement in the code, that any organization identifying itself as a charity work “to eliminate prejudice and discrimination,” as evidence the IRS isn’t enforcing its own regulations.

“When the IRS becomes aware that there’s a charity that’s outside the confines of the charitable purpose, they’re not doing their work,” he said.