Analysis Law and Policy

Exclusive: California Community Foundations Risk Women’s Health by Giving Millions to Crisis Pregnancy Centers

Nicole Knight

Philanthropic institutions that are supposed to serve the greater good in their geographic region are essentially acting as tax-exempt conduits for private donors to bankroll organizations that undermine women’s health, some of which have been shown to flout city and state laws. And the foundations don’t regard this as a problem.

Earlier this year, the president and CEO of the California Community Foundation, Antonia Hernández, accepted one of the Los Angeles Chamber of Commerce’s highest honors, the Civic Medal of Honor. Hernández, a former civil rights attorney, is known locally for bringing a 1975 class action lawsuit against Los Angeles County doctors, the state, and the federal government for sterilizing Latinas without their consent.

In a video tribute prepared by the chamber of commerce, Hernández said the “sole responsibility” of the California Community Foundation “is to improve the quality of life for all Angelenos, in housing, employment, education, the arts, scholarships.” But a review of tax filings from the 101-year-old foundation shows that the charity gave $1.5 million between 2010 and 2014 to fake clinics, commonly known as crisis pregnancy centers, and to anti-choice umbrella groups that operate these facilities across the country. These centers, typically set up as religiously run nonprofits, mislead pregnant people in a way that is antithetical to the mission Hernández described.

A substantial body of evidence from federal and independent investigators, public health experts, and academics describes how crisis pregnancy centers peddle medically inaccurate information to coerce pregnant people into carrying to full term.

Rewire discovered that the California Community Foundation, the 11th largest in the country based on total assets, has funded fake pregnancy clinics for years, as have at least four other community foundations in the state.

Community foundations are public charities ostensibly dedicated to improving the lives of people in a defined geographic area, as the Council on Foundations notes at its website. They receive tax dollars and raise money from the general public, businesses, and wealthy donors, and range widely in size, with assets running from hundreds of thousands to billions of dollars.

Our review of the tax filings of the California Community Foundation, Silicon Valley Community Foundation, San Francisco Foundation, San Diego Foundation, and Los Altos Community Foundation shows that these foundations funneled a combined total of $2.7 million over a five-year period to fake pregnancy clinics.

These organizations’ founding documents do not require them to fund fake clinics. The documents show that these philanthropies were established to improve the well-being of the communities they serve. But instead they are supporting crisis pregnancy centers that try to trick pregnant people into making lifelong decisions that could harm their emotional, physical, or economic welfare.

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Presented with what Rewire had discovered, Antonia Hernández responded in an emailed statement that the California Community Foundation is a “neutral, trusted fiduciary.”

She said, in part, “Our Finance Department conducts the required, in-depth due diligence to ensure 501c3 nonprofit organizations are in good standing with the IRS and comply with the law. Our discretionary grant-making allows us to lead positive systemic change that strengthens Los Angeles County communities in the areas noted in the [chamber of commerce] video.”

Rewire found that the California Community Foundation gave $1.28 million in grants to a dozen fake clinics, primarily in Southern California. An additional $55,000 in grants in 2010 and 2011 also went to a network of New York-based fake pregnancy clinics called Expectant Mother Care (EMC) Frontline Pregnancy Centers. A former leader of the anti-choice extremist organization Operation Rescue, Chris Slattery, founded EMC Frontline Pregnancy Centers in the 1980s. New York Attorney General Eric Schneiderman subpoenaed Slattery in 2013, saying in court filings the facilities “may be engaged in the unauthorized practice of medicine,” reported Anna Merlan in a Village Voice article.

Rewire also discovered that the Silicon Valley Community Foundation, the nation’s largest community foundation as measured by total assets, donated $250,000 in 2012 and $100,000 in 2014 to Real Options, a Northern California chain of fake pregnancy clinics that used smartphone surveillance to target ads to women seeking abortion. The ads directed women to crisis pregnancy centers instead of clinics providing legitimate medical care.

Around the same time, the San Francisco Foundation, the country’s 12th largest community foundation in terms of total assets, gave $53,550 to a chain of crisis pregnancy centers called First Resort, which had waged a losing, multi-year court battle against San Francisco’s truth-in-advertising ordinance. The law prohibits fake clinics from running ads that make it seem like they’re abortion clinics. San Francisco city attorney Dennis Herrera called First Resort’s ads “an insidious practice” that was “especially problematic because these centers … interfere with women’s time-sensitive, constitutionally protected right to reproductive choice.”

The Los Altos Community Foundation, a charity with only about 5 percent of the assets of the San Francisco Foundation, also funneled $62,000 over five years to First Resort.

Meanwhile, the San Diego Foundation, which has half of the assets of the San Francisco Foundation, gave $339,020 over five years to five fake clinics in Southern California. One of the clinics, Culture of Life Family Services, offers “abortion pill reversal.” Abortion pill reversal is the unscientific, unproven notion, popular in the anti-choice movement, that a medication abortion can be undone with a large dose of hormones.

While these grants represent a fraction of these foundations’ total giving—which encompasses a variety of charities, including groups dedicated to reproductive health care—the money was significant to the crisis pregnancy centers that received the funds, accounting for up to a quarter of their annual revenue in some cases. In other words, money from community foundations helped fake clinics to keep their doors open.

Rewire also discovered that between 2010 and 2014, the San Diego Foundation and California Community Foundation supported another prong of the anti-choice movement: propaganda. The San Diego Foundation gave $1.5 million in 2014 to Live Action, which has produced doctored videos seeking to smear abortion providers.

Meanwhile, the California Community Foundation funneled a total of $50,000 in 2013 and 2014 to Survivors of the Abortion Holocaust, which stages anti-abortion protests around Southern California and across the country.

The San Diego Foundation, the California Community Foundation, and the Silicon Valley Community Foundation also fiscally supported national anti-choice organizations, such as Pro-Life Action Ministries, the American Life League, and Focus on the Family, which actively oppose local pro-choice policies and laws.

As an example of this, just this month the founder of Focus on the Family urged fake clinic operators in California to “go to jail” rather than comply with state’s new reproductive transparency law.

Rewire reviewed the Articles of Incorporation on file with the U.S. Internal Revenue Service for four of these foundations. These founding documents require the San Diego Foundation to operate “exclusively for charitable, scientific and/or educational purposes”; require the Silicon Valley Community Foundation to engage in “charitable activities” that “benefit communities within San Mateo County and Santa Clara County, or communities elsewhere whose needs are of concern to residents of San Mateo County and Santa Clara County”; require the Los Altos Community Foundation (formerly Los Altos Tomorrow) to support “the needs of the communities” of Los Altos, Los Altos Hills, and nearby unincorporated areas; and require the San Francisco Foundation to “engage in charitable activities … that benefit the public, with preference given to activities in the San Francisco Bay area.”

Although articles were not available for the California Community Foundation, its gift agreement indicates that donations to the foundation shall be used “exclusively for general charitable uses and purposes.”

The San Francisco Foundation has given First Resort a total of $53,550, including this donation for “post-abortion counseling.”

It’s no secret that fake clinics present a public health concern.

It was a decade ago that former California Rep. Henry Waxman (D) called for a federal investigation into taxpayer-funded fake clinics. Congressional investigators, posing as pregnant 17-year-olds, visited the facilities in 15 states. The resulting report, False and Misleading Health Information Provided by Federally Funded Pregnancy Resource Centers, described how 87 percent of centers contacted dispensed medical falsehoods, such as that abortion increases the likelihood of breast cancer and of suicide, claims completely debunked by medical research.

Such deception, as the report noted, “denies the teenagers and women vital health information, prevents them from making an informed decision, and is not an accepted public health practice.”

Concerned about the health risk posed by crisis pregnancy centers, the California legislature in 2015 passed a bellwether reproductive transparency law, AB 775, to regulate fake clinics. AB 775 requires the state’s licensed crisis pregnancy centers to post a brief notice about the availability of abortion care, and for unlicensed centers to disclose that they’re not medical facilities. As one of its authors, state Assembly member David Chiu (D-San Francisco) told the Assembly Judiciary Committee in April of that year, ”Unfortunately, we’ve seen a rapidly growing number of organizations who’ve tried to pass themselves off as women’s medical clinics, while providing false information and risking delays to critical early care.”

California, Chiu continued, “has a compelling state interest to make sure that all pregnant women have timely access to health care … whether prenatal care or an abortion.”

More recently, Shannon Smith-Crowley, director of government relations for the Northern California chapter of the American Congress of Obstetricians and Gynecologists, urged the Oakland City Council to pass a truth-in-advertising ordinance to stop crisis pregnancy centers from running deceptive ads to lure women seeking abortion care.

“When women arrive for appointments, they are subjected to a barrage of medical misinformation and manipulative tactics to pressure them to continue their pregnancies,” Smith-Crowley wrote in a June 2016 letter to the city council describing women’s experiences at fake clinics. “By interfering with women’s reproductive health choices, CPCs cause delays that can result in the need for a more expensive or invasive option to terminate their pregnancy, or losing the option to terminate the pregnancy altogether.”

Joanne D. Rosen, with Johns Hopkins Bloomberg School of Public Health, made a similar point on a national level in a 2012 research survey, “The Public Health Risk of Crisis Pregnancy Centers.” Rosen said that fake clinics delay women’s access to abortion, postpone prenatal care, and potentially increase the number of unintended births.

“These practices jeopardize the health of women and their children,” Rosen wrote.

Last year, the advocacy group NARAL Pro-Choice America revealed in a report that 91 percent of the fake clinics it visited in California falsely linked abortion care to an increased risk of breast cancer, infertility, mental health problems, and death. The report noted that two multi-million-dollar umbrella groups for fake clinics, Heartbeat International and Care Net, spent more than $18,000 a month on pay-per-click ads targeting individuals searching for abortion clinics, with the goal of diverting these people to crisis pregnancy centers instead.

Care Net and Heartbeat International have both received funding from community foundations, Rewire discovered, with the California Community Foundation giving a total of $220,200 between 2011 and 2014 to Care Net, and the San Diego Foundation funneling $306,000 between 2010 and 2013 to Heartbeat International.

By extending financial support to crisis pregnancy centers, Dr. Pratima Gupta, a former fellow with Physicians for Reproductive Health who is familiar with fake clinics, told Rewire it “implies that these community foundations are supporting the mission statement of these crisis pregnancy centers and their agendas and their dissemination of incorrect information.”

“It makes you wonder if the foundations are aware of where their money is going,” Gupta said.

It’s difficult to argue, however, that these philanthropies are ignorant of the types of organizations they’re supporting.

Rewire contacted the staff and in some cases the CEOs of each of the five community foundations, emailing them spreadsheets listing their grants to fake clinics, and asking for an explanation of these grants.

Foundation representatives insisted across the board that they’re following the wishes of donors who want to fund fake clinics, and who’ve given money to the foundations through something called a donor-advised fund.

Laurel Iverson, a spokesperson for the Los Altos Community Foundation, explained the grants to fake clinics in this way: “We didn’t make the decision to give to that organization, we were directed by the person who gave the money” in the donor-advised fund.

But contrary to her claim, these foundations are making the decision to fund fake clinics, Rewire learned.

Donor-advised funds are a tax-free financial instrument that works like this: a donor deposits money, stock, or some sort of asset with the community foundation and suggests which charities to support.

Foundations typically earn administrative fees of around 1 percent off these funds, and donors get the benefit of an immediate tax write-off and privacy.

Philanthropy experts told Rewire that a 1969 change in tax law made donor-advised funds more advantageous than private foundations, and today community foundations house billions of dollars in donor-advised funds. In fact, almost 95 percent of the Silicon Valley Community Foundation’s $5.46 billion in net assets are held in donor-advised funds, according to its 2014 tax filing, the most recent available. Meanwhile, donor-advised funds account for nearly 40 percent of the assets of the California Community Foundation, according to its 2014-2015 annual report.

Community foundations, however, are in no way compelled to either accept money in a donor-advised fund or spend it on crisis pregnancy centers.

The California Community Foundation’s own gift agreement spells this out, noting that donor “recommendations are not binding on the Foundation and may be accepted or rejected, in whole or in part, by the Foundation in its sole and absolute discretion.”

And the U.S. Internal Revenue Service, which regulates tax-exempt charities, also makes this clear, writing, “[o]nce the donor makes the contribution, the organization has legal control over it.”

“They can say no. They can say no anytime they want to,” explained Richard Fox, a shareholder specializing in taxation and nonprofits with Buchanan, Ingersoll & Rooney, PC, and a fellow of the American College of Trust and Estate Counsel.

“Community foundations are the owners of the money, and they have full discretion over that money—that’s how the law works,” Fox, who recently tried a case where the Nevada Supreme Court affirmed that foundations control the money in donor-advised funds, told Rewire in a phone interview.

But rather than saying “no,” it appears that these community foundations are instead giving their donors near carte blanche. Here’s how Sue McAllister, marketing director with the Silicon Valley Community Foundation, explained its process in an email to Rewire:

For example, if you wished to do your charitable giving through Silicon Valley Community Foundation, you could set up a donor advised fund with us for a minimum donation of $5,000. Then, as long as there is still a balance in your fund, you can ‘recommend’ grants for distribution to any nonprofit organization that is in good standing with the IRS (or equivalent international charities), and we send out the grant funds to those organizations. You could recommend grants to an alma mater, for example, or a food bank in your area, or to a global environmental organization. As long as the organization is a verified nonprofit, SVCF will distribute the grant as you recommended.

When Rewire asked foundation representatives how the grants to fake clinics were in keeping with their missions, Gail Fuller, vice president of marketing and strategic communications with the San Francisco Foundation, acknowledged in an email that donations to fake clinics did not “represent its programmatic focus.”

However, Emmett Carson, CEO and president of the Silicon Valley Community Foundation, described its grantmaking as “consistent with the very best traditions of American democracy.”

“SVCF’s donors support nonprofit organizations that may have different goals, values and points of view,” he noted in a statement emailed to Rewire. “As a community foundation, we understand and support that different people and segments within the community hold different views and that grants from SVCF will reflect this philanthropic diversity.”

Representatives from the Silicon Valley Community Foundation and the San Francisco Foundation also told Rewire that they have rejected donors’ requests in the past.

Hernández, CEO of the California Community Foundation, said in a statement to Rewire that the foundation houses nearly 1,600 donor funds, “helping donors with their philanthropic giving all over the world.”

“Often our donors have opposing interests and viewpoints from one another,” she noted. “As a community foundation, it is our duty to honor the intentions of our donors alongside fulfilling our mission through discretionary grantmaking.”

In other words, philanthropic institutions that are supposed to serve the greater good in their geographic region are essentially acting as tax-exempt conduits for private donors to bankroll organizations that undermine women’s health, some of which have been shown to flout city and state laws. And the foundations don’t regard this as a problem.

Foundation representatives across the board said they abide by IRS tax laws and declined to discuss specific grants.

“Grants from donor-advised funds are advised by donors,” offered Justin Nunez, director of communications with the San Diego Foundation, in an email. “Our donors give grants to a variety of organizations and causes.”

In reality, this means that public charities are furnishing some of the means for fake clinics to continue misleading pregnant people in a state where nearly half of pregnancies are unintended.

One of the California Community Foundation’s grantees, a fake clinic called Los Angeles Pregnancy Services, made this point in a 2014 promotional video.

California Community Foundation gave Los Angeles Pregnancy Services a total of $189,160 between 2012 and 2014. In 2014, the same year as the video, tax filings indicate that roughly one-fifth of Los Angeles Pregnancy Services’ total revenue that year came from a $75,300 grant from the California Community Foundation.

In the video, Astrid Bennett Gutierrez, CEO of the fake clinic, stands on the sidewalk outside Los Angeles Pregnancy Services, trumpeting its record of discouraging women from ending their pregnancies.

“More than 800 babies have been saved from abortion,” Gutierrez declares. “And women have been spared the horrible trauma of going through [with] an abortion.”

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