The Shameful Hypocrisy of Schwab’s Donor-Advised Fund Affiliate

In 2023, Washington, D.C. District Attorney Brian Schwalb launched an investigation into Leonard Leo’s network of nonprofits. Politico reporting and allegations from watchdog groups like CREW documented that Leo was steering funds to groups that he effectively controlled (like the 85 Fund), which in turn paid his consulting firm tens of millions of dollars in contracts. 

Leo refused to cooperate, arguing that the charges were politically motivated, and that D.A. Schwalb lacked the authority to investigate. And Leo moved the 85 Fund and other entities to Texas, where they would avoid further scrutiny. 

In response, not only did Schwab-affiliated DAFgiving360 not pause funding to the 85 Fund (one of its very largest grantees), but it chose to award the nonprofit $160 million that year and $148 million the next, accounting for almost the entirety of the group’s revenue. 

The contrast with its behavior towards the Southern Poverty Law Center couldn’t be starker.

Why DAFgiving360’s explanation doesn’t pass the smell test

In April the Justice Department filed what most saw as highly suspect and politically motivated charges of financial fraud against the Southern Poverty Law Center (SPLC). Shortly afterwards, DAFgiving360, the donor-advised fund (DAF) sponsor affiliated with financial services giant Charles Schwab, and also known as Schwab Charitable, blocked donors from making grants to the civil rights group.

DAFgiving360’s move followed similar actions by the DAF affiliates of Fidelity and Vanguard, the other major commercial firms whose DAF sponsors now dominate the field: Together, they ranked as three of the top five U.S. public charities receiving the most contributions in 2024. All three sponsors have come under sharp criticism for capitulating to the Trump Administration’s mounting attacks on opponents, but DAFgiving360’s action had an especially hypocritical stench.

According to the New York Times, a spokesperson for the fund said, “If a governing body of a charity declares an investigation into a charity it oversees, DAFgiving360 may suspend grants to the organization.”

And yet, over the past several years, DAFgiving360 has continued to funnel hundreds of millions of dollars to the 85 Fund, a charitable conduit of Leonard Leo, one of the country’s most influential conservative legal strategists and kingmakers. DAFgiving360 has supported Leo’s slush fund even as he came under investigation for enriching himself by using money from the charity and other nonprofits he controlled to pay tens of millions of dollars to his own consulting business.

The long tale of Leo and Schwab Charitable

To understand how instrumental donor-advised funds are to Leo’s influence network, it’s important to look back further. In 2021, Leonard Leo’s dark money group Marble Freedom Trust received $1.6 billion from billionaire Barre Seid – one of the largest political advocacy gifts in history. In the years since (through April 2025), Marble has moved $587 million to a donor-advised fund at DAFgiving360.

During roughly that same period (July 2021 through June 2025), DAFgiving360 made grants to the 85 Fund totaling $561 million, accounting for almost all the group’s revenue ($564 million from 2021 through 2024; its 2025 data is not yet available).

This funding pattern alone violated DAFgiving360’s own internal guidelines. And it became even more suspect in 2023, when reports alleged that Leo was personally benefiting from charitable grants to nonprofits that he controlled – grants like those from DAFgiving360. In February 2024, Bloomberg reported on $100 million in payments to Leo’s firm (CRC Advisors) from groups he founded or with whom he was affiliated. Later that year, top D.C. watchdog group Citizens for Responsibility and Ethics in Washington (CREW) highlighted the same pattern of payments and apparent self-dealing. They followed up in June 2025, with a piece showing how Leonard Leo’s firm continues to rake in millions from his own dark money network.

The 85 Fund is Leo’s primary 501(c)(3) vehicle, and functions primarily to grant money to an array of conservative organizations. Though structured as a public charity, a letter obtained by Axios in 2024 revealed how Leo intended to use the Fund to reshape the conservative movement: He threatened to cut off groups unless they shifted from “ideation” towards “weaponizing those ideas and policies to crush liberal dominance at the choke points of influence and power in our society.”

Politico first reported this maneuvering in March of 2023: “A network of political non-profits formed by judicial activist Leonard Leo moved at least $43 million to a new firm he is leading, raising questions about how his conservative legal movement is funded.”

The following month the Campaign for Accountability filed a complaint calling on the IRS to investigate Leo’s network of nonprofits. As The Guardian reported, “Leonard Leo, a rightwing legal activist, has raked in more than $73 million over six years from non-profit groups that may be diverting money illegally to his businesses, according to a watchdog complaint seen by The Guardian.”

Then in August, Politico reported that Washington, D.C. District Attorney Brian Schwalb had opened an investigation into Leo’s network of nonprofits and the possibility that The Federalist Society co-chair had abused nonprofit laws for personal enrichment.

Leo refused to cooperate with the investigation, arguing that the charges were politically motivated and that Schwalb lacked the authority to investigate. And he moved the 85 Fund and other entities to Texas, where they would avoid further scrutiny. 

We have no further knowledge of the D.A.’s investigation, or of how DAFgiving360 may have addressed the matter directly with Leonard Leo. In the time since, however, reports show how Leo’s network of nonprofits continued paying his firm tens of millions of dollars, and DAFgiving360 continued to direct hundreds of millions of dollars to the 85 Fund.

Alongside these allegations and DA Schwalb’s investigation, Leo and the 85 Fund came under further scrutiny from a different angle: Revelations came to light that Leo had secretly steered funding to Ginni Thomas, wife of Supreme Court Justice Clarence Thomas, using the Judicial Education Project (the 85 Fund’s earlier name) as a conduit. As the Washington Post reported, “In January 2012, Leo instructed the GOP pollster Kellyanne Conway to bill a nonprofit group he advises and use that money to pay Virginia “Ginni” Thomas…The same year, the nonprofit, the Judicial Education Project, filed a brief to the Supreme Court in a landmark voting rights case.”

Amidst this flurry of reportage questioning the legality and propriety of Leo’s funding schemes, his organizations remained top echelon clients of Schwab’s charitable affiliate. Since receiving its initial $1.6 billion windfall from Barre Seid, Marble Freedom Trust has transferred nearly $600 million to a donor-advised-fund at DAFgiving360, which in turn has granted nearly $600 million to the 85 Fund, making it among the sponsor’s top five grantees each of its last four fiscal years:

2022 – $142 million, 2nd largest
2023 – $141 million, 2nd largest
2024 – $160 million, 4th largest
2025 – $148 million, 5th largest

The Judicial Education Project was at number 6 in 2021, with a grant of $39.8 million, before the big money from Marble Freedom Trust kicked in.

Funding from DAFgiving360 has in turn made up almost all of the 85 Fund’s revenue during this period. Here is the 85 Fund’s total revenue for recent years from currently available data:

2021 – $117 million
2022 – $135 million
2023 – $143 million
2024 – $169 million

Without these grants, the Fund would not qualify as a public charity. As we have explained here and again, the grants violated both the intent of IRS rules ensuring that public charities are not controlled by private interests, as well as DAFgiving360’s own internal grant guidelines that purport to follow those IRS rules: “DAFgiving360  generally will not approve grants to organizations that would likely be considered non-operating foundations absent the DAFgiving360 grants.”

And since the source of those funds, Marble Freedom Trust, is also controlled by Leo, DAFgiving360’s grants also violate its guidelines aimed at preventing self-dealing: “DAFgiving360 generally will not approve a grant recommendation to an organization that is controlled by the recommending DAFgiving360 account holder and/or their family members and/or their affiliates.” 

The upshot

Schwab’s DAFgiving360 affiliate is acting arbitrarily, applying its guidelines inconsistently, and giving credence to accusations that cutting off SPLC is a politically motivated choice.

They say they will “generally” not approve grants under certain conditions, just as they tell the New York Times that they “may” cut funding to a group that comes under investigation. But for Leonard Leo they’ve kept the spigot on, while for SPLC they closed it off immediately. In a word, this stinks. 

Philanthropic capital continues to accumulate in donor-advised fund sponsors, which manage hundreds of billions of dollars in assets and comprise 8 of the nation’s top 10 best-funded public charities. 

We should all be profoundly concerned about these sponsors’ biases and concentrated power. By choosing to withhold grants based on the preferences of a corrupt administration, they deprive donors of their own voice and determine a great deal about what remains of our civil society.

What is at first glance a case of hypocrisy at a single sponsor warns of what can happen when financial institutions position themselves at crucial choke points of democracy.