Client Sues WaterStone, Claims He was Blocked From Family Account

Lawsuit could establish rights of advisor to donor-advised fund.

The Christian Community Foundation, also known as WaterStone, is being sued by Philip Peterson, who claims the donor-advised fund won’t communicate with him, revoked his account access, and has failed to make recommended charitable contributions from the family fund.

Waterstone Logo / Photo via Facebook

A donor-advised fund (DAF) can be established by individuals, families, foundations, or businesses with as little as $10,000, according to the National Philanthropic Trust. One common use for a DAF is to contribute appreciated stock to avoid capital gains tax then preserve the asset value for future charitable contributions.

WaterStone was established in 1980 and was a pioneer in establishing donor-advised funds for philanthropic giving. It now manages over $2 billion in assets and makes more than $4.5 million in grants each week, according to its website. It will make grants from DAFs to tax exempt organizations whose mission statement does not conflict with WaterStone’s statement of faith.

Peterson claims that his father, Gordon Peterson, established the Peterson Family Stewardship Fund with WaterStone in 2005 to support Christian ministries. According to the lawsuit, Gordon Peterson passed away in 2019. As of 2023, Peterson claims the account had a balance of more than $21 million.

From 2017 to 2021, WaterStone acknowledged Peterson as a donor advisor on the family fund along with his mother Ruth. When his mother died in 2021, Peterson became the sole advisor to the fund.

WaterStone continued to work with Peterson through 2023, approving and administering his grant recommendations from the Peterson Family Stewardship Fund; however, in March 2024, Peterson claims WaterStone cut off his account access, denied his grant requests, and stopped communicating with him.

One of the grants Peterson said was denied was a $1 million distribution to Operation Mobilization, a Christian missionary organization that focuses on evangelism and discipleship worldwide. Peterson’s family had a history of supporting Operation Mobilization.

Peterson claims WaterStone CEO Ken Harrison joined him for a Zoom call on March 5, 2024, during which the plaintiff claims Harrison “swore at him and used abusive language,” told the plaintiff that WaterStone would be cutting off all further communication, and abruptly ended the call.

On March 11, Peterson said he sent an email attempting to reestablish the relationship and account access, but was unsuccessful.

Peterson also claims to have reached out to several of WaterStone’s board members over the next several months to apprise them of the situation and seek their help in resolving it, but he never received a reply.

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In February 2025, Peterson said WaterStone agreed to make distributions of $400,000 from his DAF. The plaintiff agreed to those distributions, but said he reminded WaterStone it was $4.5 million behind in charitable contributions for previous years.

According to Peterson’s attorney Andrew Nussbaum, WaterStone told Peterson, “We owe you no duties, and we don’t have to talk to you and give you access to the fund’s performance.”

“My client asked for the original 2005 contract, and they wouldn’t give him that. We’re talking about advisory rights,” Nussbaum said, adding that there is “almost no case law involving what rights a donor-advised fund owes to the advisors of the fund.”

WaterStone’s website explains that once the fund is established, its balance grows and the person who established the fund can “recommend grants to support [their] favorite charities over time.”

Peterson offered more about the deteriorating relationship in an interview with the Denver Gazette. He said in 2023, after both of his parents had died, WaterStone approached him about changing the way the account was funded, but he said he disagreed with them.

In his lawsuit, Peterson claims WaterStone has breached its contract by failing to honor grant recommendations, imposing unauthorized fees, failing to provide a timely and accurate accounting, and failing to communicate with him.

He also claims WaterStone has violated the Colorado Consumer Protection Act by engaging in deceptive trade practices.

He is seeking an accounting of the fund, a declaratory judgment that clarifies the rights and duties that exist between Peterson and WaterStone, and an injunction requiring WaterStone to carry out its duties, including making recommended grants.

Peterson is also asking for the court to require WaterStone to transfer the DAF to another organization of his choice.

“This is my dad’s donor-advised fund – it’s not mine,” he said. “My role is to direct this money to organizations my father wanted to support and had supported for years in amounts he wanted.”

In the MinistryWatch 1000 Database, WaterStone has three out of five stars for financial efficiency, an “A” transparency grade, and Donor Confidence Score of 95 out of 100, meaning donors can give with confidence.

WaterStone has not yet filed an answer to the lawsuit and did not reply to a request for statement by MinistryWatch before the time of publication.

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