A liberal foundation controlling roughly $1 billion in assets faces accusations of “egregious mismanagement” of funds from the largest Black Lives Matter group in the country.
Black Lives Matter Global Network Foundation (BLM GNF) filed a lawsuit on Monday accusing the Tides Foundation of mishandling funds donated to a “Black Lives Matter Support Fund” administered by Tides, arguing the funds belong to them. Tides, however, contests this by claiming that donations to the fund were actually intended for smaller BLM organizations.
“Resources in the Black Lives Matter Support Fund were never intended to be granted to large, well-funded national organizations like Black Lives Matter Global Network Foundation, and were always intended to be granted to local Black Lives Matter chapters,” Tides told the Daily Caller News Foundation. (RELATED: Black Lives Matter PAC Spent Most Of Its Money In 2023 Paying Its Own Treasurer For ‘Consulting’)
The Tides Center, which is affiliated with the Tides Foundation, previously served as the fiscal sponsor of BLM GNF, allowing the BLM group to accept tax-exempt donations without registering with the Internal Revenue Service. The two groups ended their relationship in December 2020.
“While the Black Lives Matter Foundation seeks to recover its funds unjustly held by the Tides Foundation, our legal challenge extends beyond this specific issue,” BLM GNF told the DCNF. “We aim to establish new rules for Tides and all fiscal sponsors, who operate like unlicensed banks, handling huge donations in ways that blur the lines of legal and fiscal sponsorship without proper oversight,” they continued.
BLM GNF alleges that Tides entered an oral contract with it stipulating that money donated to the fund would eventually be transferred to them. The organization also accuses Tides of unjustly skimming money off their donations by charging service fees.
“Tides assesses fees under its agreements with these organizations, including charging a significant percentage for each contribution dedicated to BLM GNF,” according to the lawsuit.
Tides charges “exorbitant fees to Black and Brown” nonprofits, according to the suit, which BLM GNF argues is illegal because the fees “equate to high interest rate fees similar to commercial bank fees” and “Tides is not organized for the purpose of engaging in the commercial banking business.”
The lawsuit claims this constitutes Tides financially benefiting at the expense of BLM GNF as well as “the communities it serves.”
(REUTERS/Lindsey Wasson)
BLM GNF is seeking $33.4 million in damages from Tides through its lawsuit.
“We are deeply disappointed that it has reached this stage, and that the actions of BLMGNF leaders continue to prevent us from granting funds to Black-led and Black-serving organizations that need it,” Tides said in its statement to the DCNF.
BLM GNF has its own history of alleged financial mismanagement. The organization fell under scrutiny in 2022 when it used charitable funds to purchase a 6,500-square-foot $6 million mansion in Southern California.
BLM GNF was deeply involved in the racial justice movement that sprung up after the death of George Floyd in Minneapolis, Minnesota, in May 2020. After receiving a deluge of donations following Floyd’s death, the organization doled out millions of dollars in grants to aid local BLM chapters and other racial justice activist groups.
The Floyd riots caused over $1 billion in damages, resulting in between $1 billion and $2 billion in paid insurance claims, according to Axios. A total of 24 people died during the riots.
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