Madoff fallout hits funding for charities
Share Now on:
TEXT OF STORY
Tess Vigeland: The Bernie Madoff Ponzi scheme keeps rippling beyond our shores. Today an Irish hedge fund sued to recover $3 billion. Charities and foundations here in the U.S. still appear to be among Madoff’s biggest victims. Several were forced to shut down. Others are struggling to fill gaps in funding. Some of Madoff’s victims gathered in St. Petersburg, Fla., recently, where they talked to Marketplace’s Amy Scott.
AMY SCOTT: Even the Florida sunshine couldn’t drive away the clouds hanging over the annual meeting of the Jewish Funders Network. Many of the foundations at the conference have lost 30 percent or more of their money from the market downturn. And then there’s the wreckage left by Bernie Madoff, who specifically targeted the Jewish community.
MARK CHARENDOFF: We have one member who lost a billion dollars just in their foundation.
Mark Charendoff is president of the Jewish Funders Network. He says the group’s members didn’t just lose billions of dollars.
CHARENDOFF: For the people here, for people of wealth, it’s very hard to find people you trust. Everyone wants something from them. So you end up the only way you can live your life is you find this little circle of people that you trust, and you rely on them. Here’s a man who broke into that circle by saying, “No, no, no I don’t want anything from you, I’m one of you.” It’s not just that money was lost, that fabric of community, which is really very precious, was betrayed.
One of Madoff’s most famous victims is Elie Wiesel, the keynote speaker at the conference. He survived the Holocaust, and won the Nobel Peace Prize. Wiesel’s charitable foundation and personal wealth were nearly wiped out by the Madoff fraud. He says supporters have made up for some of those losses.
ELIE WIESEL: We had hundreds and hundreds of people on the Internet, sending in small amounts — $5, $10 — it was heartwarming.
Many nonprofit groups that depend on donations from Jewish philanthropists were at the conference. Myriam Lasry is with an Israeli group called the Ayalim Association. It promotes the settlement of the Negev and Galilee regions of Israel. She says her group lost $800,000, about 20 percent of its budget when the Chais Family Foundation closed. Chais had invested all its money with Madoff.
MYRIAM LASRY: It changed us from being a very stable and uh, long-term, we had long-term plans, to not knowing what will happen the next day and fighting every month to find the paychecks.
I spoke with Lasry at a networking event that put nonprofits together with potential funders. Rabbi Seth Farber was there promoting Itim. It’s a group that helps Jews navigate the religious establishment in Israel.
SETH FARBER: What I’m holding here is life-cycle manuals.
Farber says several of his donors were hit by Madoff. He came here looking for new support, but wasn’t encouraged.
FARBER: It’s pretty evident to me that I’m not going to bring on any new funders in this kind of environment.
The Jewish Funders Network has created a crisis loan fund to help nonprofits hurt by the Madoff fraud. But it may be a long time before some members can put the disaster behind them.
The IRS is looking at taxing board members of private foundations that invested with Madoff. A court-appointed trustee could go after foundations and charities that made money from the ponzi scheme. The recovered cash would help pay back other investors.
In St. Petersburg, Fla., I’m Amy Scott for Marketplace.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?