(Bloomberg) — Steven and Mitchell Rales, the billionaire brothers behind industrial conglomerate Danaher Corp., shifted $3.3 billion in shares to their charitable foundations in one of the largest ever transfers of its kind.

The move earlier this month allocates billions for future donations from two of the world’s wealthiest people, who’ve eschewed the limelight while building a high-tech manufacturing empire. In addition to life sciences-focused Danaher, they own stakes in machinery company Colfax Corp. and advanced instrumentation-maker Fortive Corp.

“We’re not leaving the Earth with any money,” Mitchell told the Washington Post in 2018. “When we go, there’s not going to be money bestowed on children and grandchildren in any meaningful way.”

Steven, 70, and Mitchell, 64, are worth $10 billion and $7.9 billion, respectively, according to the Bloomberg Billionaires Index, making them the 250th and 358th richest people in the world.

Their fortunes have been propelled by shares of Washington, D.C.-based Danaher, the firm they founded almost four decades ago. Its stock is up 22% this year to a record high, boosted by hunger for lab products and this month’s $9.6 billion cash purchase of Aldevron, a maker of the building blocks of mRNA vaccines.

Little Fanfare

Their gift, disclosed in a June 10 filing, was emblematic of how the Pittsburgh-born pair operate: with little fanfare and close control. It also highlights how the Rales’s have structured their vast fortune, using techniques popular among the super-rich for reducing tax burdens.

The filings didn’t identify the recipient foundations, but noted each brother was the sole director. It’s the first time Steven has donated Danaher stock, though Mitchell — who signed the Giving Pledge, promising to give away most of his fortune during his lifetime — gifted an average of about 2 million of the company’s shares annually from 2008 to 2019, according to filings.

This month’s transfers give “their respective foundations sufficient capital to carry on with funding their philanthropic priorities,” a spokeswoman said in a statement. A foundation in Steven’s name had no assets in 2018, according to its most recent filing, while one in Mitchell’s name contributed about $2 million to unidentified charities.

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Mitchell’s gift could have been to the foundation that controls Glenstone, an outdoor sculpture park and museum on 230 acres in Potomac, Maryland, that displays his 1,300-piece collection of post-war art and is free to the public. His wife, Emily Wei Rales, is the director and curator. Its most recent tax filing, before the latest gift of Danaher shares, showed a net asset value of $1.8 billion.

Film Production

Steven, also a contemporary art collector, helped fund an art center at his alma mater, DePauw University, and is a frequent donor to the Democratic party. He also owns film production company Indian Paintbrush, which has co-produced Wes Anderson movies. The family, including youngest brother Joshua, founded the children’s-health focused Rales Center at Johns Hopkins University through a foundation named after their parents, Norman and Ruth.

Raised in a New York City orphanage, Norman never attended college but built various property and construction-supply businesses that served as examples and a launchpad for his two sons’ foray into the world of corporate dealmaking. Steven and Mitchell formed Danaher in the early 1980s, converting a real estate investment trust into a shell for scooping up struggling, little-known manufacturing businesses.

They were among the first in North America to adopt the Japanese management philosophy of kaizen, which emphasizes efficiency and continuous improvement. That’s led to a shift in focus to life sciences, illustrated by Danaher’s acquisition last year of the biopharma unit of General Electric Co., whose chief executive officer, Larry Culp, previously headed Danaher for 14 years.

The kaizen-inspired operating system has been credited for the company’s consistent returns. Its stock has outperformed Warren Buffett’s Berkshire Hathaway Inc. by almost 7% over the past 30 years.

Along with efficiency, another of the brothers’ hallmarks is a reliance on credit. The Rales built up Danaher through a slew of debt-financed takeovers, leading Forbes to dub them “raiders in short pants” in a 1985 profile. They’ve also liberally used debt secured by their shares to manage their personal fortunes for years. The brothers currently have each pledged more than 85% of their respective stakes in Danaher as collateral against lines of credit at unspecified banks.

‘Good Fortune’

The maximum amount the Rales are allowed to borrow against their Danaher shares is capped at 25% of the value of their pledged stakes, according to the firm’s proxy. That’s equal to $2.1 billion for Steven and $1.7 billion for Mitchell at current values for the most recently disclosed pledged shares. Those amounts are excluded from their net worth estimates.

Share-backed loans are common among the ultra-wealthy, allowing them to capitalize on low interest rates and access cash to invest or pay for the billionaire lifestyle without selling stock and triggering a capital gains tax. Indeed, neither brother has sold Danaher stock since 2012, during which time the stock has appreciated almost 600%. The interest expense is also sometimes tax deductible.

Still, any potential interest deduction would be dwarfed by the write-off made possible from their $3.3 billion gift. More may be coming if Mitchell makes good on his commitment to give it all away.

“This is about reallocating the money we had the good fortune of making to other causes,” Mitchell said in the Washington Post interview.

(Updates with Glenstone curator in ninth paragraph.)

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