Pre-eminent civil-rights group faces cash crunch in wake of economic crisis


A wealthy financier who kept his anonymity for years as a major donor to numerous activist groups, including the ACLU, has come out of the closet to urge others to donate after the recession took a bite out of his finances.

An article published in the New York Times on Tuesday outed David Gelbaum as the man who had been giving the ACLU more than $20 million per year in recent years, amounting to a quarter of the civil-rights group's income.

The Times reported that the ACLU is facing a major cash crunch in the wake of Gelbaum's announcement that he can no longer afford to make his donations. That news sparked fears among some civil-rights activists that the US's most prominent civil liberties group would no longer be able to carry on some of its work.

The ACLU has been at the forefront of numerous civil-rights controversies in recent years. It has fought for the release of photos showing detainees being tortured in US custody. It has been in the front lines of civil libertarians' battles against increased police and surveillance powers.

On Wednesday, Gelbaum issued a statement officially outing himself as the ACLU's anonymous donor. He revealed that, since 2005, he had donated $94 million to the ACLU, $48 million to the environmentalist Sierra Club -- and a stunning $247 million to the Iraq Afghanistan Deployment Impact Fund, which provides assistance to soldiers deployed in war zones and their families.

"The future viability of these programs will depend on the generosity of others," Gelbaum said in his letter, which was published by the ACLU.

The former hedge fund manager made it clear that the financial crisis that has spread throughout the world over the last year is at the heart of his inability to continue funding charitable causes.

"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," Gelbaum wrote. "Consequently, and much to my regret, I will not be able to make donations of this size starting in 2010 and continuing indefinitely."

The ACLU's statement on the matter noted that Gelbaum had "reaffirmed" his support for the group -- likely an effort by the group to quell suspicions that its largest donor may have abandoned it for political or personal reasons.

The Times noted that the civil-liberties group has already taken steps to deal with a slow-down in revenue, and will have to take more in the coming months.

Late last year, suffering from a decline in charitable giving caused by the economic downturn as well as the loss of income from two foundations hit by the Bernard L. Madoff scandal, the A.C.L.U. pared 10 percent of its national staff, or 36 jobs, and Mr. Romero agreed to a 15 percent cut in his salary, reducing it to $302,048 this year, compared with $355,000 in the prior year.

The organization also instituted a hiring freeze, curtailed travel and canceled conferences.

“Even with this incredible outpouring of support, we may still not have sufficient resources to replace our revenue gap,” Mr. Romero said. “Therefore we will need to consider a number of budget reductions as well as the possibility of drawing down from our reserve funds if necessary.”