Madoff Case Creates Worst Loss for Jewish Charities

December 17, 2008

Author: Philip Boroff and Patrick Cole

Source: Bloomberg

http://www.bloomberg.com/apps/news?pid=20601088&sid=ay38_dO238P8&refer=muse

New York’s Museum of Jewish Heritage recently cut its staff by 12 percent as it projects smaller donations following the worst year for U.S. stocks since 1931.

In the wake of the arrest of Bernard Madoff in what’s being called the biggest scandal in philanthropic history, museum Deputy Director Ivy Barsky expects more pain.

“It’s devastating, even for those of us who aren’t directly affected,” she said.

Madoff’s wealthy Jewish clients in New York, Boston and Palm Beach, Florida, are coping with pain and anger after disclosure of the alleged multibillion-dollar Ponzi scheme. The nonprofits they’ve funded will likely contend with budget cuts.

“I can’t think of anything since the Great Depression that had an impact of this size,” said Melissa Berman, president of Rockefeller Philanthropy Advisors in New York.

Jews in the U.S. give more than $5 billion to Jewish causes. Although they comprise just 2 percent of the population, Jews contribute 25 percent of the largest gifts to higher education, according to a recent study cited by Gary Tobin, president of the San Francisco-based Institute for Jewish and Community Research.

“To see foundations losing big parts or all of their assets through fraud has never happened before,” he said. “This is a tremendous violation of the public trust.”

The losses to Jewish philanthropists -- who include film director Steven Spielberg and real-estate developer Mortimer Zuckerman -- are in the hundreds of millions, if not billions.