The alleged pyramid scheme run by Bernard Madoff has wounded the world of Jewish philanthropy. Several charities have already shut down after discovering their endowments had disappeared overnight, and many others are worrying how they will survive without the support of some major philanthropists who were wiped out as well.
In the world of Jewish philanthropy these are what you'd call the go-to givers, the pillars of the community and the ones with their names on buildings — from Steven Spielberg to Elie Wiesel to billionaire Mort Zuckerman, who says he found out by e-mail that $30 million — a portion of his charitable trust — no longer existed.
"I have to put this kind of bluntly," Zuckerman says. "I made the money, contributed to charity. And to find out this kind of money dissipated is just infuriating," not to mention tragic for the community, says Zuckerman, who says he will definitely have to make cuts in his giving.
"This money was devoted to the task of cancer care, education, scholarship, food for the poor — I could go on," he says. "And to have these funds lost — this one just leaves me breathless."
The casualties are still hard to calculate. Not only do the givers have less to give, but also many charities themselves had the bulk of their monies invested with Madoff, at a time when they were already struggling because of the market meltdown.
Jeffrey Solomon, president of the Andrea and Charles Bronfman Philanthropies — one of the foundations not invested with Madoff — says every phone call and meeting these days starts with a conversation about who got hit.
He compares the situation to the aftermath of a hurricane, when the lights are still out and you can't tell who has been crushed and who is still standing, but you know it's bad.
A few organizations have already shut down, including the Massachusetts-based Robert I. Lappin Charitable Foundation, an organization that ran Israel trips for teens. It lost $8 million and closed up, as did the California-based Chase Foundation, which gave more than $12 million to at-risk youth in Israel.
Yeshiva University is not commenting on reports that it lost more than $100 million, and there are countless smaller organizations that may be crippled.
"They simply don't know where to make up these lost revenues from," Solomon says. "And in some cases, the very existence" of those nonprofits is at risk.
The Carl and Ruth Shapiro Family Foundation says it lost $145 million, but a spokesperson says the family will honor all its commitments this year, including a $15 million gift to a Boston hospital to begin building the Shapiro Ambulatory Care Center.
But Dan Brown, a consultant with eJewish Philanthropy, an Internet consultancy for Jewish organizations, says when a foundation loses half its money, something has to change next year.
"Is the foundation going to cut everybody back 50 percent in 2009, or are they going to fund some fully and cut others completely?" Brown says. "Are they going to honor all pledges they've already made and not make new pledges for three years, to build their assets back up? I doubt foundations know the answer to that yet."
Charities are already improvising. The Gift Of Life Foundation, a bone marrow registry, took a $2 million hit, and Jay Fineberg, the organization's founder, has now launched a new campaign to find a "white knight" to help clean up the mess left by Madoff.
"You know, when you're a cancer patient, you can't look at it any other way," Fineberg says. "You always have to look at 'OK, I'm faced with a challenge or adversity, and how do I move ahead and never feel bad or sorry?' Just make it happen."
Ultimately the world of Jewish philanthropy might see the kinds of changes that for-profit industries experience in hard times — some will shut down, others will downsize and, fundraisers say, you can also expect to see a lot of mergers.