Three men have quietly given away billions of dollars to charity using a complicated web of financial tools to shield them from public view, but an investigation by Bloomberg Businessweek (May 8) figured out their identities and the extent of their donations.
David Gelbaum, Andrew Schechtel, and C. Frederick Taylor, who co-founded the successful and secretive hedge fund TGS Management, have become among the nation’s most generous philanthropists through their donations to causes such as human rights, the environment, and disease research.
In combing through an Internal Revenue Service database, the magazine’s reporter discovered the Gabriel Trust and Endurance Funding Trust, which together hold about $9.7-billion, much more than big foundations like Rockefeller and Robert Wood Johnson. By following clues, the reporter realized the trusts were created by Mr. Schechtel.
The three men took great pains to maintain their anonymity by establishing layers of companies that controlled their trusts and foundations. They created companies in Nevada and Wyoming to control the charitable funds, and those companies were managed by other corporations in Delaware.
IRS filings show that since 2000, more than a dozen private foundations controlled by these companies have concealed the donors’ identities while giving out $1.8-billion, including more than $700-million to find a cure for Huntington’s disease, a cause favored by Mr. Schechtel. Another $1-billion has gone to donor-advised funds such as the Vanguard Charitable Endowment Program. Billions of dollars are yet to be donated, the article claims.
All three men declined to talk to the magazine.
The magazine suggests that the donors’ elaborate matrix of secrecy may not be entirely altruistic: “They’re also avoiding public scrutiny of how they made their fortunes, and how they’ve chosen to give them away.”
To read more, go to businessweek.com.
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Mark Zuckerberg’s headline-grabbing $100-million gift in 2010 has brought mixed results for public schools in Newark, N.J., that were meant to benefit, according to The New Yorker (May 19).
The article, which includes a rare interview with the billionaire co-founder of Facebook, tracks the efforts of Gov. Chris Christie of New Jersey and Cory Booker, then the mayor of Newark, to improve the city’s failing school system, Mr. Booker’s wooing of Mr. Zuckerberg’s support, and how the money has been spent.
The Newark experiment, the article suggests, underscores the limits of big-dollar philanthropy in forcing social change. Despite some progress, the article says, the plan to overhaul the city’s decaying schools and better serve its mostly high-poverty students has proved difficult to implement.
Among the problems: the rapid siphoning of about $20-million of Mr. Zuckerberg’s money to a host of consultants. “Everybody’s getting paid, but Raheem still can’t read,” said Vivian Cox Fraser, head of the Urban League of Essex County.
Mark Tercek, the former Goldman Sachs partner who now runs the Nature Conservancy, and his controversial strategy of including big business in the fight to save the environment also comes under scrutiny in The New Yorker (May 12).
The article paints Mr. Tercek as a pragmatist who “willingly engages with least-bad alternatives. He does not oppose genetically modified food, nuclear power, or fracking, hoping only to play a role in easing their environmental impacts.”
During his six years at the charity’s helm, Mr. Tercek has used the tools of business, such as assigning a monetary value to natural resources, to persuade corporations to conduct their business more sustainably. He and Peter Kareiva, the charity’s top scientist, have tangled with more traditional conservationists, who fear the group’s approach is harming their movement. But Mr. Tercek has pleaded with his critics to focus on “outcomes, not strategies,” noting that on his watch, another 25 million acres have come under the conservancy’s protection.
To read both stories, go to newyorker.com.
