Is Your Fidelity Charitable Donation Reaching its Destination?

By Marla Stein

According to recent NYT article, Fidelity Charitable “… has become the largest grant maker in the country, managing thousands of individual donor-advised funds.” (“As needs surge in pandemic, donors step up,” Paul Sullivan, July 2, 2020). Further, the article quotes Fidelity Charitable President, Pamela Norley, “Despite the economic environment, all the uncertainly on a personal level, people looked outside of themselves and gave to charity.”

However, donations through Fidelity Charitable don’t always reach their destination and donors are not properly notified. This problem has been exacerbated by the COVID-19 crisis.

The problem seems to be, in part, ridiculously simple. When NGOs change locations, their addresses aren’t automatically updated on Fidelity records. Fidelity donations, often sent via regular mail, are returned and voided. Fidelity does not agree to have their checks forwarded for security reasons. During the pandemic, many offices have temporarily closed with staff working from home – including University Hillels and PEF, itself a donor-advised conduit to Israeli nonprofits that don’t have 501(c)3 status. Unless they have pro-actively changed their mailing address with Fidelity, these organizations will not receive their donation checks and they are not notified that something went awry. The donors are sent an email with a subject heading “Adjustment Confirmation” – an insufficient phrase to draw attention to the problem.

My husband and I have had at least five donations voided in the last few months and we only found out inadvertently. I called Fidelity to try sorting this out. While I spoke to a very polite representative, clearly Fidelity is a mega-bureaucracy that is not able or intending to update their records systematically. I also spoke to several NGOs. I heard many complaints of how frustrating and difficult it is to work with Fidelity. We donors pay a management fee to Fidelity Charitable; we expect better service!

Here are my suggestions for action:

NGOs:

• Make sure your address is listed correctly in the Fidelity system. Be sure to notify Fidelity of an address change – even if your move is temporary.
• The Fidelity number for NGOs is: 1-800-262-6039 #4. Evidently, you can request an address change on the phone.
• Do not depend on mail forwarding. Fidelity does not forward checks for security reasons and donations will be voided.
• Enlist a trusted donor to log in to their account to confirm that the necessary changes show up correctly.
• Consider using a PO Box instead of a street address to avoid this problem.
• Have your board members write the Fidelity Board of Trustees insisting they refine their systems to be more user-friendly for the NGOs. Request that they send you a report of any donations that were voided.

Take the time to change your address even if you are not expecting donations through Fidelity. Sometimes donors, just like us, have been inspired to donate without notifying an NGO first. Or we are repeating a donation from a previous year. Either way, we assume the information on the Fidelity site is correct and we simply click the button. Bottom line, you may be missing funds you were expecting as well as funds you weren’t expecting. You might even have missed a donation in progress before you made the address change on the Fidelity system.

Instead of receiving checks by mail, you can request to have funds sent through EFT (Electronic Funds Transfer) instead. Note: This is an either/or situation. But, beware: in the case of an EFT, Fidelity may not provide crucial details about which donor(s) made the donation and any special donor request. You may just receive a lump sum in your NGO’s bank account and not know if it’s from one donor or several donors. In PEF’s case, they didn’t receive important information as to which NGO the donor would like the funds to be transferred. While it might be easier for PEF to receive an electronic transfer, the donations are meaningless unless they have this crucial information, so PEF reverted back to receiving checks by regular mail. Except that, now, during the pandemic, the checks are not getting through.

Fidelity:

Fidelity, we donors pay you a management fee. Please make sure that all of the donations you have approved actually reach their destination and with all of the appropriate information! Would you please clarify and revise your system to do the following:

• Notify NGOs when there is a problem – not just the donor.
• When you notify the donor, please explicitly alert the donor with an email subject line: “Your donation has been voided.” Currently, the subject line is “Adjustment Confirmation” which is insufficient. Further down, the letter mentions a “miscellaneous transaction.” And only if you click on the link do you find that a donation has been voided.
• Please generate and send reports to each NGO that has had donations voided. This report could be processed yearly, if not 2-4 times a year.
• In above-mentioned report, include the donor, amount of donation, and reason the funds were not delivered.
• Please find a way to make Electronic Funds Transfers more effective. The grantee must have full information on the donor(s), the amount that has been donated by each donor as well as any requests by the donor. For instance, is the donation meant to be passed on to another NGO (in the case of PEF)? If so, how much money is to be passed on? It is reasonable to think that IT staff of an organization of Fidelity’s size could figure this out. Consider surveying NGOs about their needs including what has or has not worked for them in the past.

Donors:

• Pay attention to your emails from Fidelity. If a donation check has been returned/voided, you will receive an “Adjustment Confirmation” email.
• Contact the NGO to alert them of a problem. NGOs are short staffed and struggling now more than ever. They need our help. Note, however, that the NGO itself must request the address change. Donors can technically request a donation be sent to a certain mailing address, but Fidelity will not heed the request without the NGO’s confirmation.
• Please write to the Fidelity Charitable Board of Trustees to insist they be more pro-active about the problems described above. See mailing address below. Ask that Fidelity alert NGOs about the importance of changing their address through a variety of means including direct email and through promotional material, philanthropy newsletters, etc.
• Request that Fidelity generate and send reports to NGOs detailing voided donations.

I was told by the Fidelity representative on the phone that they are not in the habit of printing such reports, and that I would have to direct my request BY MAIL to their Cincinnati office:

Fidelity Charitable Trustees
PO Box 77001
Cincinnati, Ohio 45277

JFN:

We all want to impact the world through our philanthropy – especially now, during the pandemic. JFN, you provide excellent programming and resources; can you help remedy this situation?

• Can you assign a staff person or an intern to further research this problem? Take an informal survey of JFN members: How many JFN members donate through Fidelity Charitable or other DAFs? Are they aware of this problem? How many donations do they make through Fidelity Charitable? How many reach their destination and how many are voided? How do other DAFs handle these issues?

With all of the value-setting, mapping, vetting, relationship-building, evaluation, etc. that philanthropy entails, if the donations don’t get through, then the system is broken.

Let’s work together to solve this seemingly simple, yet very damaging problem!

Marla Stein
JFN Member
Co-Chair, Green Funders’ Forum