Jewish Charities Scramble to Cover Losses to Trader
Wednesday, December 24, 2008
NEW YORK, Dec. 23 -- According to the 12th-century Jewish philosopher Maimonides, one of the highest categories of philanthropy is giving so the recipient doesn't know the donor, and the donor doesn't know the recipient.
On Tuesday, about three dozen of the biggest Jewish foundations in the country convened an emergency meeting to come up with a plan to anonymously help the Jewish nonprofits that fell victim to a $50 billion Ponzi scheme that Wall Street trader Bernard L. Madoff is charged with operating, and to try to restore the community's faith in its values, said organizers of the meeting.
"Because of the act of one alleged criminal, centuries of Jewish philanthropy should not be besmirched," said Jeffrey Solomon, president of the New York-based Andrea and Charles Bronfman Philanthropies. "Clearly, this was the opposite of what Jewish values are all about. This man literally stole from funds that were serving the needy."
Madoff's alleged scheme did enormous damage to some of the country's most prominent Jewish foundations and nonprofit organizations: The Carl and Ruth Shapiro Family Foundation lost $145 million; Yeshiva University lost $110 million; Hadassah, the Women's Zionist Organization of America, lost $90 million; the Elie Wiesel Foundation for Humanity lost $15 million; director Steven Spielberg's Wunderkinder Foundation lost an undisclosed amount. Several small foundations have had to close because they lost most of their assets.
During the three-hour meeting Tuesday, the foundations decided to set up a clearinghouse to allow the nonprofits to share resources, publicize their needs and sound the alarm if they are in danger of foundering. The foundations will also set up a bank of lawyers, accountants and strategic planners to provide expert help. And they will try to raise money to patch the holes created by the losses.
"It's like putting out the fire in the kitchen of the Titanic while the ship is going down," said Felicia Herman, the executive director of Natan, a foundation financed by young Jewish philanthropists, speaking about the fallout from the Madoff-linked losses in the midst of a larger global financial crisis.
Still, she said, "there's a shared sense of a need to respond to right this wrong in this way."
Madoff attended Far Rockaway High School in Queens among Jews of various social classes and became a prominent figure in high-powered Jewish circles around the country, from Oak Ridge Country Club in suburban Hopkins, Minn., to the exclusive Palm Beach Country Club in Florida.
Many of those who entrusted their investments to him were friends, neighbors and fellow club members -- as well as Jewish charities and foundations. Now the question that keeps turning over in people's minds is: How could he hurt those closest to him?
"Beyond the financial fallout, I think the potential erosion of trust is really quite severe," said Mark Charendoff, president of the Jewish Funders Network. "Madoff's whole recruitment technique was a function of community. It's not just being assaulted, but assaulted by a member of the family."
"He wiped out a generation of Jewish wealth," said Brad Friedman, a lawyer representing some of Madoff's reported victims.
The meeting of foundations began with a report from a program officer of the Chais Family Foundation, which had to shut down, said Murray Galinson, chairman of the Jewish Funders Network board.
The program officer, who was not identified, has been spending his days calling nonprofit groups the foundation had committed to fund and telling them there was no money left, Charendoff said.
"It was heart-wrenching," he said.
"This is the kind of meeting that takes place after any tragedy, whether it is a natural disaster, like a tsunami or Hurricane Katrina, or September 11, or a local storm," said Solomon, president of the Bronfman foundation. "After moments like this, people involved in philanthropy come together to try to think, 'How do we help? "
The meeting of the foundations came on the same day that Rene-Thierry Magon de la Villehuchet, who ran a fund that invested with Madoff, was found dead at his Manhattan office after an apparent suicide.