Madoff Fallout Hits Jewish Foundations Hard Many Jewish foundations and charities have suffered large losses through the alleged Ponzi scheme run by Bernard Madoff. Some have already closed their doors. Others are assessing the damage.
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Madoff Fallout Hits Jewish Foundations Hard

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Madoff Fallout Hits Jewish Foundations Hard

Madoff Fallout Hits Jewish Foundations Hard

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Jewish philanthropy has been hit hard by Bernard Madoff's alleged Ponzi scheme. Several charities have already been forced to shut down after discovering their endowments had disappeared overnight. Many others are worrying about how they'll survive without the support of some major donors who've lost millions of dollars. NPR's Tovia Smith has that story.

TOVIA SMITH: In the world of Jewish philanthropy, these are what you'd call the big machers, the go-to givers, the pillars of the community, the ones with their own foundation and their names on buildings - from Steven Spielberg to Elie Wiesel and billionaire Mort Zuckerman, who says he found out by email that $30 million, a portion of his charitable trust, no longer existed.

BLOCK: I have to put this kind of bluntly. I made the money. I contributed to charity. And to find out this kind of money dissipated is just infuriating.

SMITH: Not to mention tragic for the community, says Zuckerman. He says he'll definitely have to make cuts in his giving.

BLOCK: This money was devoted to the task of cancer care, education, scholarship programs, food for the poor, blah blah blah - I could go on. And to have these funds lost, this one just leaves me breathless.

SMITH: 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, that at a time when they were already struggling because of the market meltdown.

BLOCK: In many ways, this is the perfect storm.

SMITH: Jeffrey Solomon is president of the Andrea and Charles Bronfman Philanthropies, one of the lucky foundations that was not invested with Madoff. Solomon says his every phone call and meeting these days starts with a conversation about who got hit. He compares it to the aftermath of a hurricane, when the lights are still out and you can't tell who has been crushed and who's still standing, but you know it's bad.

BLOCK: This is a classic telegram that says, start worrying, details to follow.

SMITH: A few organizations have already shut down. In Massachusetts, the Robert Lappin Foundation that ran Israel trips for teens lost $8 million and closed up, as did the California-based Chais Foundation that 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. Again, Jeffrey Solomon.

BLOCK: They simply don't know where they're going to make up these lost revenues from. And in some cases, the very existence of those nonprofits are at risk.

SMITH: The Carl and Ruth Shapiro Foundation says it lost $145 million. A spokesperson says the family will honor all their commitments this year, including a $15 million gift to a Boston hospital to begin building the Shapiro Ambulatory Care Center this week. But Dan Brown, a consultant with eJewish Philanthropy, says when a foundation loses half its money, something will have to change next year.

BLOCK: I mean, I wonder is the foundation going to cut everybody back 50 percent in 2009, or you know, are they going to leave some programs full and cut some programs completely? Are they going to honor, for example, all the pledges they've already made and not make new pledges for three years to try to build their assets back up? I doubt the foundation knows the answer to that yet.

SMITH: Charities are already improvising. The Gift of Life Foundation took a $2 million hit. Jay Feinberg, who founded the Jewish Bone Marrow Registry after his own experience searching for a match, has now launched a new campaign to find a white knight to help clean up the mess left by Madoff.

BLOCK: You know, when you're a cancer patient, you can't look at it any other way. You always have to look at, OK, I'm faced with a challenge or an adversity. And how do I move ahead and never feel bad or sorry, just, you know, make it happen?

SMITH: 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. Tovia Smith, NPR News, Boston.

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