The largest Black Lives Matter group in the country, Black Lives Matter Global Network Foundation (BLM GNF), has filed a lawsuit against the Tides Foundation, alleging significant mismanagement of funds. The lawsuit claims that the Tides Foundation mishandled donations meant for a “Black Lives Matter Support Fund” administered by them, arguing that the funds rightfully belong to BLM GNF. On the other hand, Tides Foundation disputes this by asserting that the donations 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 said.
The Tides Center, associated with the Tides Foundation, formerly acted as the fiscal sponsor for BLM GNF, enabling the BLM organization to receive tax-deductible contributions without the need to register with the Internal Revenue Service. However, their partnership came to an end 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 announced. “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 claims that Tides made an oral agreement with them, stating that funds donated to the organization would be passed on to them. Additionally, the group accuses Tides of unfairly taking a portion of their donations through 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.”
While seeking $34 million in damages, Tides said “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.”
BLM GNF has a controversial history regarding its financial management. In 2022, the organization faced scrutiny when it utilized charitable funds to acquire a luxurious mansion worth $6 million in Southern California, spanning an area of 6,500 square feet. BLM GNF played a significant role in the racial justice movement that emerged after the tragic demise of George Floyd in Minneapolis, Minnesota, in May 2020. Following Floyd’s death, the organization received an overwhelming influx of donations and subsequently allocated millions of dollars in grants to support local BLM chapters and other activist groups advocating for racial justice.
The riots that ensued after Floyd’s death resulted in extensive damages amounting to over $1 billion, leading to insurance claims ranging between $1 billion and $2 billion, as reported by Axios. Tragically, these riots also claimed the lives of 24 individuals.
