Major Donor Pulls Funding, Leaves ACLU and Locals Scrambling

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

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:


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
$247 million

2. American Civil Liberties Union Foundation
Contact: Anthony Romero
$ 94 million

3. Sierra Club Foundation
Contact: Peter Martin
$ 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.


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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