The SPLC and Fundraising Up-Close

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Over the years SPLC has drawn considerable scrutiny for its fundraising practices. According to SPLC’s 2008 990 returns, the Center listed $167 million as its total portfolio (net assets). Charity watch examiners, financial analysts, and news organizations have scrutinized SPLC’s nonprofit operation: the Center’s vast asset portfolio, aggressive investment strategy, annual program expenditures versus total annual funds raised, and selectively cherry-picking high-profile cases to exploit for publicity and fundraising purposes.

Some left-wing critics have accused SPLC of exploiting alleged victims of discrimination, violence, and intolerance for financial gain. These critics, including former SPLC staffers, have pointed to the Center’s use of exaggerating the domestic threat of far-right fringe groups as a fundraising ploy for raising millions of dollars from liberal and far-left philanthropists. Others have raised ethical critiques of the Center’s annual aggressive fundraising (maintaining tens of millions of dollars in assets and investments) while expenditures remained less than total annual funds raised. For example, in 2008 the Center raised $32.4 million. The Center’s 2008 expenditures were listed at $30.7 million.

In 2005 the Center received the lowest rating from the American Institute of Philanthropy (August 2005, AIP Charity Rating Guide & Watchdog Report, Vol. No. 40, p. 18). The Institute dropped SPLC’s rating from a “C” to an “F” in the category of “Charities with Large Asset Reserves.”

Another major organization monitoring nonprofit charities, the Foundation Center, likewise drew attention to the SPLC’s questionable fundraising practices (Egerton, John. “The Klan basher,” Foundation News vol. 29 [May-June 1988] p. 38-43).

The Better Business Bureau’s (BBB) annual “Wise Giving Report” is one indicator of a charity’s openness to public scrutiny — providing full disclosure of its nonprofit finances. The BBB rates charities on a range of criteria, provides useful information to the public, and evaluates whether a charity measures up its own independent standards. SPLC has refused to comply with the Bureau’s requests for information in order to determine if the Center meets the BBB standards for “wise giving” as a charity. SPLC’s refusal to provide the Bureau with annual financial information — complying with the BBB’s requests to assess the Center’s standards for charitable giving — raises further questions about the worthiness of the public’s trust of SPLC.

Initial Assessments

An early exposé of SPLC’s fundraising tactics was John Egerton’s “Poverty Palace: How the Southern Poverty Law Center got rich fighting the Klan” in The Progessive (July 1988: 14-17). Egerton, a freelance writer and author of several books on the South, southern living, education reforms and desegregation policies, noted that

Dees and his associates have drawn financial support from about half a million Americans in the last eighteen years. The number of contributors and the amount they have given are probably greater than any left-of-center group has recorded in a comparable period in the history of American philanthropy.

The Center’s annual income from fundraising letters such as the one signed by [George] McGovern is in the $5million range —about twice as much as it manages to spend each year. Regular surpluses and income from investments managed by a New York financial firm have swelled the Center’s permanent endowment to more than $22 million.

Egerton’s article quoted former SPLC staffers and associates of SPLC co-founder Morris Dees on the Center’s questionable fund-raising efforts. Former SPLC lawyer Deborah Ellis recalled, “I felt that Morris was on the Klan kick because it was such an easy target — easy to beat in court, easy to raise big money on. The Klan is no longer one of the South’s biggest problems— not because racism has gone away, but because the racists simply can’t get away with terrorism any more.”

In one fundraising pitch, Egerton points out that attorney’s for The New York Times“charged that the Southern Poverty Law Center had edited a story from the newspaper to the point of changing its meaning and had then reproduced it on newsprint to make it look like a clipping from The Times.” Atlanta attorney Millard Farmer, famous for his description of Morris Dees as “the Jim and Tammy Faye Bakker of the civil rights movement,” explained how naïve he was in forming “Team Defense” — an Atlanta-based project co-sponsored by the SPLC to combat the death penalty in the South.

Egerton recalls how Randall Williams, a journalist who worked at the Center in the 1970s and eventually helped SPLC establish Klanwatch, noted how the anti-Klan emphasis was a “brilliant” fund-raising tactic.

‘The money poured in,’ Williams says. ‘Everybody, it seems, was against the Klan. We developed a whole new donor base, anchored by wealthy Jewish contributors on the East and West Coasts, and they gave big bucks. Our budget shot up tremendously — and still, we were sometimes able to raise as much as $3 million a year more than we could spend.’

Williams left in 1986 noting that “the Center had changed significantly.”

‘We were sharing information with the FBI, the police, undercover agents,’ he notes. ‘Instead of defending clients and victims, we were more of a super snoop outfit, an arm of law enforcement.’

In 1996, Weekly Standard contributor Tucker Carlson took aim at Dees in his feature article, “With Friends Like Dees…” Carlson explained how Dees exploited the bombing of the Murrah Federal Building in Oklahoma City to raise vast sums of money for the Center.