A recent groundbreaking Bloomberg Businessweek report exposing the identities of a trio of philanthropists, who took great pains to conceal their giving, revealed extensive support for Jewish charities.
Entitled “The $13 Billion Mystery Angels,” the article details how for more than two decades, the partners at little known hedge fund TGS Management – Andrew Shechtel, David Gelbaum and C. Frederick Taylor – have coordinated their donations through lawyers who have helped them cover their tracks.
From 1999 to 2005, the law firm Lowenstein Sandler established more than a dozen anonymous private foundations funded and controlled by limited liability companies. Businessweek noted that according to IRS filings, almost all of these companies have links to either Shechtel, Gelbaum or Taylor.
The generous donors used these anonymous vehicles, as well as various trusts, to direct more than $13 billion to causes relating to human rights, the environment, and medical research, among others. IRS filings show that the foundations have distributed more than $1.8 billion to charity since 2000 alone. Some of the subsidiaries they created also have Hebrew or Israel-related names such as Shekel Funding and Matan B’Seter Foundation, Hebrew for “anonymous gift.”
The Algemeiner was unable to independently verify Taylor’s religion but Gelbaum and Shechtel are Jewish.
According to a chart of their giving compiled by Businessweek, based on IRS filings, the trio donated $137.6 million to at least 26 Jewish charities between 2001 and 2012.
Using a web of subsidiaries to hide their contributions, the bulk was distributed through the donor advised Jewish Communal Fund ($70 million). Outreach group Aish Ha’Torah also received aid ($17 million), as well as the Israel Project ($2 million), United Jewish Communities ($4 million), American Jewish Congress ($240,000), American Israel Education Foundation ($350,000) and Tarbut V’Torah ($23 million), among others.
Other Jewish charities that benefited from their generosity between 2001 and 2012, include, PEF Israel Endowment Funds, American Friends of Tel Aviv Soursasky Medical Center, UJA Federation of New York, Jewish Funders Network, Yeshiva University, Morasha School, Hineni Heritage Foundation, Orange County Jewish Campus, AIPAC Trenton, National Jewish Outreach Program, West Side Hatzolah, American Israel Education Foundation, Jewish Television Network, Hebrew Union College, Orthodox Union Institute, Conference of Presidents, American Friends of Tel Aviv, Mount Sinai Hospital, Auerbach Central Agency for Jewish Education, Israel 21C and the American Jewish Congress.
During the same time period, the partners also funded major watchdog organizations, including the Committee for Accuracy in Middle East Reporting in America ($25,000) and the Middle East Media Research Institute ($300,000).
An additional $1 billion was donated through public foundations such as the Vanguard Charitable Endowment Program, which distributes funds for thousands of donors, making the ultimate destination of their contributions impossible to determine.
The three men cherish their privacy and will not talk to reporters about their wealth and charitable activity. When Businessweek’s reporter introduced himself to Shechtel at a Jewish conference on philanthropy, where his wife gave a presentation, the TGS co-founder declined to talk, dismissed the journalist with a few words and turned away.
Gelbaum avoids talking about the source of his wealth in interviews, but did reluctantly speak to the Los Angeles Times in 2004.
“I don’t think that if you have a lot of money and you give away a lot of money, you should get a lot of recognition. You shouldn’t be able to buy that,” he said. “Most wealthy people spend their lives trying to make more and more money rather than give it away. They wait too long. They are depriving themselves of a lot of joy.”
Before launching TGS, the partners worked for Edward Thorp, known for starting the world’s first quantitative hedge fund, Princeton-Newport Partners, in 1969. Thorp told Businessweek that when the three men opened their own hedge fund in 1989, they practiced a form of statistical arbitrage – seeking to profit from the tendency of stocks that recently fell to rise, and recently rose to fall.
Within a few years, TGS had made enough to return funds to most of its outside investors, according to Thorp and another person with knowledge of the company’s activities. No longer needing to seek outside investors, the three men were able to keep their investments private.
Gelbaum, 65, retired more than a decade ago, leaving Taylor and Shechtel, both 54, to run TGS. He continued his philanthropic endeavors up until 2013, when he and his wife announced that they were “not in a position to give more” to charity, Businessweek noted.
“He lost more than he expected to in the financial crisis,” said his lawyer, Joseph Bartlett, “more than he thought he could possibly lose.”
During his 2004 interview with the LA Times, Gelbaum called his success over the years “all a matter of chance.”
“It certainly wasn’t because I worked 5,000 times as hard as the average person, or was 5,000 times smarter than the average person,” he said.