PayPal shielded donors who gave to Wisconsin-based health misinformation outlet

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• The PayPal Charitable Giving Fund has funneled more than $140,000 to groups that have spread COVID-19 misinformation, anti-vaccine content and hate in recent years.
• Such donor-advised funds are a way for controversial tax-exempt organizations to raise money without the donors having to disclose which organizations they fund in their annual reports.
• Other financial institutions such as Vanguard, Fidelity and Charles Schwab also have funneled money to Front Line COVID-19 Critical Care Alliance, a Wisconsin-based group that promotes discredited COVID-19 treatment.

The charitable arm of PayPal, one of the world’s largest digital payment companies, facilitated $141,194 in anonymous donations between 2019 and 2021 to groups trafficking in COVID-19 misinformation, anti-vaccine content and hate, tax records show.

PayPal Giving Fund, known on tax documents as PayPal Charitable Giving Fund, operates as a donor-advised fund (DAF) sponsor. It’s essentially a charity that people can donate to, through PayPal, while recommending where the money should ultimately go. When the money reaches its final destination and shows up on that organization’s tax filings, the DAF sponsor is listed as the donor.

“DAFs make it easy for donors to launder their identity,” said Roger Colinvaux, law professor at The Catholic University of America who studies DAFs. “That’s why I think DAFs are very useful for funding controversial groups. They effect a distance between the donor and the controversy.” 

The large financial institutions tend not to pick and choose which groups can receive contributions, instead adopting a blanket IRS-recognized 501(c)(3) policy, to avoid weighing in on questions of politics or free speech. As a result, controversial groups can receive tax-deductible donations without full transparency of where the money comes from.

In 2021, the most recent year tax data is available, PayPal Charitable Giving Fund gave $23,166 to the Front Line COVID-19 Critical Care Alliance (FLCCC). The group launched in 2020 under the leadership of Dr. Pierre Kory, who had recently left his posts as professor and chief of the Critical Care Service and medical director of the Trauma and Life Support Center at UW Health.

FLCCC promotes discredited treatments for COVID-19, claiming it’s based on the “best” and “most recent” research. One protocol relies on a retracted paper the Journal of Intensive Care Medicine withdrew after learning that Kory had misrepresented data and methods. Another calls for using ivermectin and hydroxychloroquine, neither of which the FDA has approved for COVID. The FDA recommends against treating COVID with ivermectin and warns against using hydroxychloroquine outside of hospitals or clinical trials.

In its newsletter, the group also circulated a debunked anti-vaccine conspiracy. 

FLCCC did not respond to a request for comment. FLCCC is not currently listed on PayPal’s website in search results of charities partnered with PayPal Charitable Giving Fund.

In a statement, a PayPal spokesperson said: “PayPal has a long-standing Acceptable Use Policy and we regularly assess activity against our policies and will discontinue our relationship with account holders who are found to violate them. For privacy reasons, we cannot comment on specific accounts.”

Also in 2021, PayPal Charitable Giving gave $6,272 to Informed Consent Action Network, an anti-vaccine organization identified by the Center for Countering Digital Hate as a key source of anti-vaccine messaging. The group, which did not respond to a request for comment, is also not currently listed on PayPal Charitable Giving’s website.

Donor-advised funds sponsored by some of the nation’s largest investment firms — Vanguard, Fidelity and Charles Schwab — have also funneled anonymous dollars to FLCCC, as reported in Rolling Stone and confirmed by Wisconsin Watch.

The Vanguard Charitable Endowment Program gave $150,000 between 2020 and 2021. Fidelity Investments Charitable Gift Fund gave a total of $196,900 in 2021 and 2022. Schwab Charitable Fund gave $569,284 in the same time frame. 

Fidelity did not return a request for comment. But Vanguard Charitable and Schwab Charitable gave similar statements, noting they permit donors to recommend IRS-qualified public charities of their choice and that “grants do not reflect the values or beliefs” of the DAF sponsors.

Schwab Charitable directed “anyone with concerns about a charitable organization” to the IRS or state regulators. 

Rolling Stone’s investigation, as well as a separate one from The New Republic on hate groups, did not mention PayPal’s DAF arm.

Like DAF sponsors at the big investment banks, PayPal’s has funded other notorious misinformation outlets and Southern Poverty Law Center-designated hate groups. Tax records show PayPal Charitable Giving Fund has given $100,706 between 2019 and 2021 to The Epoch Times Association, which publishes The Epoch Times. Powered by a religious group persecuted in China known as Falun Gong, The Epoch Times began as a propaganda newsletter opposing the Chinese Communist Party and has since directed millions of dollars of advertising in support of former President Donald Trump and published dozens of articles repeating his lies about the election, according to NBC News.

In 2021 PayPal Charitable Giving Fund also gave $5,760 and $5,290 to Alliance Defending Freedom and Pacific Justice Institute, respectively, both of which SPLC designates anti-LGBTQ+ hate groups.  

PayPal still allows people to donate to The Epoch Times Association, Alliance Defending Freedom and Pacific Justice Institute through its website.

As long as the IRS recognizes them as 501(c)(3) public charities, “it’s completely consistent and lawful for Fidelity (or PayPal) to fund these groups,” Colinvaux said. 

DAF sponsors, especially national ones, he said, “rarely” refuse to fund an adviser’s recommended charity. They are “not in the mission business.” 

“If it drives away their donors, because donors get upset about the amount of money funding certain controversial groups, then maybe a DAF sponsor decides not to fund them,” Colinvaux said.

“But it’s a perilous road for them to take because it would force them to make substantive decisions about which groups to fund and why. They would have to decide: What is a controversial group?”

The nonprofit Wisconsin Watch (www.WisconsinWatch.org) collaborates with WPR, PBS Wisconsin, other news media and the University of Wisconsin-Madison School of Journalism and Mass Communication. All works created, published, posted or disseminated by Wisconsin Watch do not necessarily reflect the views or opinions of UW-Madison or any of its affiliates.

This article first appeared on Wisconsin Watch and is republished here under a Creative Commons license.