Major Donor Pulls Funding, Leaves ACLU and Locals Scrambling

Categories: OC Media, Politics
David-Gelbaum.jpg
An item the New York Times posted online Tuesday night that outed David Gelbaum as a major anonymous donor to the American Civil Liberties Union and reported the Newport Beach philanthropist was cutting off $19 million in yearly donations because of economic setbacks has left the ACLU scrambling, Loretta Sanchez wondering and the man of the hour reaffirming.

The ACLU released a statement today where Gelbaum explains, "For a number of years, your organization has received very substantial charitable contributions from me. My investments in alternative, clean energy companies have placed me in a highly illiquid position as a result of the general credit crisis in the American and world financial systems."

His previous contributions represented one quarter of what the ACLU received annually from donors, according to the Associated Press. But his Newport Beach-based, environmentally friendly investment firm Quercus Trust was down almost 57 percent over the 18 months to late November, according to The Wall Street Journal.

Gelbaum revealed he is also halting some $12 million in yearly gifts to the Sierra Club Foundation and about $50 million annually to the Iraq Afghanistan Deployment Impact Fund, which helps returning service members and veterans.

About 60, the Minnesota native came to Orange County as a teenager, built a fortune at hedge funds, where he pioneered the use of mathematical formulas to help pick stocks and bonds for investors, and has kept a low profile. But he has given plenty to local causes and candidates over the years.

Through the Wildlands Conservancy and the Schwab Fund for Charitable Giving, Gelbaum was a major donor to then-sheriff Mike Carona's now-defunct nonprofit foundation, giving a total of $2.7 million in 2003 and 2004. With Gelbaum as its major donor, the Wildlands Conservancy also gave increasing amounts to the Orange County Board of Education for an outdoors program targeting at-risk youths.

After some eco-activists sought to have the Sierra Club endorse the idea that immigration has aggravated environmental problems, Gelbaum threatened to cut off his donations if the group adopted an anti-immigration stance, he acknowledged in a 2004 Los Angeles Times interview.

He's been a major donor to Democrats, having given Rep. Sanchez (D-Garden Grove) at least $9,000, according to the AP. With rising Vietnamese-American GOP stars aligning to mount a no-doubt bruising 2010 campaign against the Latina superstar, losing any previously counted-on funding must spark concern.

Despite the lost revenue, ACLU Executive Director Anthony D. Romero called Gelbaum "one of America's greatest heroes" and "an unassuming man with a spectacularly generous spirit."

"Every American should be grateful for the selfless commitment to improving the lives of others demonstrated by this remarkable man," Romero says. "While we're clearly disappointed that his desire to remain anonymous was breached, we remain eternally grateful for everything he and his family have done to advance the cause of civil liberties for all Americans."

Romero also expressed hopes others will step forward and replace Gelbaum's donations.

Gelbaum's full statement is below:

STATEMENT BY DAVID GELBAUM FOR USE BY ORGANIZATIONS FACING LARGEST REDUCTIONS IN HIS DONATIONS

December 9, 2009

I understand that you have reached a point in your relations with your supporters and the general public where it would be important to reveal my identity as your largest anonymous donor.

The situation is this. For a number of years, your organization has received very substantial charitable contributions from me. I am willing to be publicly named now because my investments in alternative, clean energy companies have placed me in a highly illiquid position as a result of the general credit crisis in the American and world financial systems.

Consequently, and much to my regret, I will not be able to make donations of this size starting in 2010 and continuing indefinitely. Several of the largest organizations I have funded in the last five years have had to make plans to wind down major areas of their work. These are programs I have been proud to support, including the Iraq Afghanistan Deployment Impact Fund that serves the needs of service members and veterans who served in Iraq and Afghanistan, the race and poverty work of the ACLU Foundation, and the Military Families Outdoors program of the Sierra Club Foundation. The future viability of these programs will depend on the generosity of others.

I have consented to disclosure so that my charitable recipients will not be constrained by donor confidentiality, may fully explain how these programs were created and financed, and may ask others to step forward to help sustain them in the future.

The three charities listed below will experience the greatest reductions, compared to what I have given in the past. These are the amounts that I provided to them in the period from 2005 to 2009, through a combination of donor-advised funds, direct giving, and other philanthropic vehicles.


1. Iraq Afghanistan Deployment Impact Fund at the California Community Foundation
Contact: Amy Fackelmann Gonzalez http://www.calfund.org/learn/iadif.php
$247 million

2. American Civil Liberties Union Foundation
Contact: Anthony Romero http://www.aclu.org/
$ 94 million

3. Sierra Club Foundation
Contact: Peter Martin http://www.sierraclub.org/foundation/
$ 48 million

I request that you make known my support of all three organizations so that everyone understands that the shift in my financial circumstances is the cause of the reduction in giving, and not any disapproval or dissatisfaction with the programs. To the contrary, I hope they will thrive with the generous support of many other donors, large and small.

See attached breakdown of programs.


FUNDING AREAS 2005-2009

1. Iraq-Afghanistan Deployment Impact Fund (IADIF)

IADIF Grants Phase I (2005+) 112,821,643
IADIF Grants Phase II (2007+) 40,784,749
IADIF Grants Phase III (2008+) 92,548,771
IADIF Admin 489,561
  ____________________
IADIF - TOTAL  $   246,644,724


2. American Civil Liberties Union Foundation

For Race and Poverty 13,800,000
For Affiliate Growth 12,500,000
For Drug Law Enforcement Reform 10,700,000
For Prisoners' Rights 7,000,000
For Immigrants' Rights 6,500,000
For Death Penalty Reform 5,000,000
For Voting Rights and Felon Re-enfranchisement 3,700,000
For Women's Rights 3,500,000
For Voting Rights 3,400,000
For Scholarships 500,000
For Youth Programs 500,000
General Operating Expenses 26,400,000
  ____________________
American Civil Liberties Union Foundation - TOTAL 93,500,000


3. Sierra Club Foundation

Military Families Outdoors program 25,562,000
Hunter Angler Outreach programs 5,950,000
Building Bridges to the Outdoors 5,910,402
Environmental Justice and Communities Grassroots Organizing programs 4,299,700
Water Sentinels program 2,500,000
Compact Fluorescent Lightbulb programs 1,103,498
Military Sustainable Housing Fund / Homes For Our Troops 1,000,000
Climate Recovery Project / Protection and Sustainable Biofuels Campaign 658,000
Environmental Career Apprenticeship Program 495,661
National Education project 110,000
LEED Sustainable Housing Fund 100,000
  ____________________
Sierra Club Foundation - TOTAL 47,689,261


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