Shawn Vestal: A year later, Innovia foundation says it’s closed the pipeline to hate groups

There’s a good news-bad news scenario tucked deep in the latest tax returns filed by the Innovia Foundation, a year after it was shamed for repeatedly funneling money to a hate group on behalf of an anonymous donor.

On the one hand, the return shows another $7,500 directed to VDARE, a Connecticut-based white nationalist organization whose star has really been rising in recent years and which reaps incredible donations.

It is, the foundation says, the last money it will direct to VDARE, to whom it has granted tens of thousands of dollars since 2015, and it represents a gift made before the foundation formally changed its policies to prevent that in the future. The latest tax returns cover fiscal year 2019, which ended June 30, 2020 – just a couple months after news of the VDARE donations was made public.

The grants were made over the years on behalf of an unnamed donor, but they traded on the good name of Innovia to obscure that fact – and when that came to light, it became a well-earned humiliation for the foundation, which had resisted internal calls to stop giving to VDARE for years.

So this final tendril of the VDARE snake is unsettling. The good news in the tax returns comes in the explanation of that donation that Innovia appended to its return.

“On April 2, 2020, Innovia’s board of directors formally adopted an anti-hate policy that made it clear to donor-advisers that contributions to organizations that foster hate would no longer be funded by donor-advised funds at Innovia,” the return says.

“It was regrettable that the adoption of this policy occurred after the funding request that is reported on Schedule 1 this year, but the application of this policy has strictly prohibited similar funding after the date of adoptions.”

The passage goes on to relate the story of a request from a donor for Innovia to direct money to a “potential hate group.”

“We requested that a third party evaluate the organization and the comprehensive review found that the organization’s activities violated the Innovia anti-hate policy. The donor was unaware of this activity, and when presented with the research, withdrew the grant request. We continue our work, internally and with the entire sector, to stem the philanthropic funding of groups that promote hate.”

Whether this change came soon enough, given the many years that Innovia – formerly the Inland Northwest Community Foundation – has been aware of the problems with VDARE, is an open question. But the note signals a change at the foundation, and it’s one that many other foundations, whose donors use them as cover to give money to groups like VDARE, have not yet learned.

In fact, one of the authors of the initial report that brought the link between VDARE and Innovia to light says that, whatever the exact details of what happened over the past five years, the foundation has now made important strides that are helping set an example for other foundations.

That man, Abbas Barzegar, is a former researcher with the Council on American Islamic Relations and now the director of The Horizon Forum, which is working with dozens of community foundations to encourage them to stop helping funnel money to extremist groups. Several of those foundations have given the Horizon Forum operational grants, including Innovia; Barzegar did not want to specify the grant figure, but he said it amounted to less than 5% of the organization’s funding.

He gives Innovia credit for being a leader in how to “develop, pass and implement protocols to prevent hate-group funding at the community level.”

“Innovia is seen amongst its peers in the philanthropic space, in the grant-making community, as a real trailblazer,” he said, adding, “For the last two years, Innovia’s been at the forefront of this conversation and I expect it to continue to be.”

Innovia CEO Shelly O’Quinn in an interview last week said there has been thoroughgoing change at the foundation, and insisted that the evolution had been in the works before last year’s revelation.

“You’re seeing that we’ve completely changed the organization in the last four years,” O’Quinn said. “We didn’t just start this work last March because Mark raised an issue.”

‘Attempt to whitewash’

Mark – former foundation CEO Mark Hurtubise – definitely raised an issue last year. He tried for years to persuade the foundation to put a stop to VDARE donations, both during his time as CEO and after his departure, without success.

He went public last March, helping provide information Barzegar co-authored for the Southern Poverty Law Center report that was quickly followed up in the local press. The reports revealed that Innovia had funneled money for years to VDARE, despite the fact that Hurtubise had provided evidence to the board of the group’s ugly ideas and activities.

If the foundation was slow to change beforehand, it was very quick to change after.

“Two weeks after we went public,” he said, “they announced that policy.”

VDARE and its founder, Peter Brimelow, do not exist in some kind of gray area. It promotes the white-genocide theory, a belief that has fueled terror attacks worldwide and that is creeping into mainstream conservatism alarmingly, and supported the Charlottesville marchers, Derek Chauvin and the Jan. 6 insurrectionists.

Brimelow’s past statements include the claim that America was performing a “demographic mutilation of itself” through immigration, that “Hispanics do specialize in rape, particularly of children,” and “I think America is a white nation.”

The notion that money flowed to this group with a stamp of approval from Innovia was repellant. It struck me as a form of money-laundering for racist support, and I wrote as much in a column at the time. (Innovia sponsors community programs in partnership with The Spokesman-Review).

The gifts to VDARE came through what is known as a donor-advised fund – in which donors give money to a foundation and request that the foundation disburse the donation to the specific grantees.

O’Quinn has insisted it could not reject such grants without a formal policy in place, but Hurtubise said the agreement signed with donors gives the board explicit final authority over donations.

“For Innovia’s CEO, board, and the foundation’s legal counsel to state otherwise is their anemic attempt to whitewash for our region that they knowingly linked arms with a donor to fund hate in this politically flammable climate,” he wrote in a letter recently that he sent out to colleagues with information about the foundation’s latest tax return.

Hurtubise sees this as an urgent example of the way racist activities become mainstreamed, thanks in large part to the passive acceptance of people who are reluctant to make waves. He believes Congress should examine the relationship between community foundations and hate groups that take cover as charities under federal tax laws.

‘Unprecedented haul’

VDARE is a particularly apt example of this dynamic.

The organization’s reach and fundraising all exploded during the past few years, as influential figures on the right helped elevate the “anti-immigrant, anti-democratic world view” of the Trump presidency, according to the new report by the Southern Poverty Law Center’s HateWatch and the Center for Media and Democracy.

Donations to the group skyrocketed during fiscal 2019, shooting from a half-million the year before to nearly $4.3 million.

“The large sum represents an unprecedented annual haul for an American white nationalist group and suggest that big-money donors of the conservative movement may be moving their riches to more extreme causes in the aftermath of Donald Trump’s rise,” according to a report on the fundraising by the organizations.

One of the key sources of income for the group comes from donor-advisers.

DonorsTrust, a right-wing foundation with ties to the Koch brothers, granted $1.5 million to the VDARE foundation in fiscal 2019. It’s just one example the report cites of mainstream foundations directing funds to hate groups – while protecting the identities of donors and getting them a tax deduction to boot.

The SPLC report cited one example of a foundation that took formal steps to end its relationship with VDARE: Innovia. However, it credited Hurtubise and the public pressure created by the embarrassing news coverage with forcing the change.

“Despite repeated pleas from its (former) CEO to adopt an anti-hate policy, it was only after national press attention … that the foundation’s board did so,” the report says.

‘We’ve made a commitment’

O’Quinn says it is not true that Innovia changed its path because of pressure and publicity.

She took over as head of the foundation in 2017, and has been involved with making a sweeping series of changes – including adding diversity, equity and inclusion standards, broadening the representation on the board and among grantees, and others.

The foundation disperses funds in two ways: One is distributing grants to organizations in a competitive process from a general fund. In that process, she said, Innovia has rejected past applicants who did not meet the foundation’s anti-discrimination standards.

It also manages donor-advised funds, in which a donor gives money and asks that it be directed to certain grantees. Until last April, Innovia had no specific policy preventing a donation to VDARE, which is registered as a 501©3 charity with the IRS, O’Quinn said.

Innovia raised concerns with the donor in question, who was insistent that VDARE receive the money and threatened legal action, she said.

“We were advised by legal counsel that we had no foundation to deny the grant,” she said.

Many have questioned this rationale, including Hurtubise, who points out that the foundation could have drawn a clear moral line and not suffered negative fallout if indeed there were a lawsuit. Sometimes not getting sued isn’t the highest principle at stake.

Barzegas said he has come to believe Innovia’s leadership was already at work on an anti-hate policy when the news broke – or at least was in the process of discussing such issues and looking to make change.

He also said that he came to have some qualms about the “tone” of the initial report, though not the facts; he said that he’s learned of some of the nuances involved that complicated the matter for the foundation, including contractual strictures the VDARE donor had placed on the foundation that, he said, did make it difficult for the foundation to implement changes.

However, he said the most important consideration in his mind is not whether Hurtubise or O’Quinn is correct about the events of the past several years – it’s what’s happening now. On that front, he praises the foundation for partnering with other foundations and setting a positive example that remains quite rare in the field.

Innovia’s work late in 2020 illustrates why it is an important community institution – one with a name and reputation to be safeguarded with the highest standards.

Between September and December, it administered $25 million in CARES Act grants, and processed three times as many gifts and grants as the previous year.

O’Quinn feels the story of what happened between Innovia and VDARE has not been fully told, and she regrets not moving faster to put up roadblocks to such grants.

“Am I super-sad we didn’t advance our donor-advised funds (policy) faster? Yes,” she said. “I will forever wish we had made that happen faster.”

At the same time, she said the organization has made wholesale improvements and is working with other foundations as they try to change their own policies.

“We’ve made a commitment as an organization – a very intentional one,” she said.