The billions of dollars that were lost when Bernard Madoff's alleged Ponzi scheme was exposed earlier this month, compounded by the loss of wealth suffered by millions of investors in the financial markets this fall, has led many Jewish community leaders to warn of a possible shakeout in the Jewish nonprofit world, the Boston Globe reports.
The Madoff scandal has significantly affected many well-known Jewish institutions and organizations, including three in New York City: Yeshiva University, which may have lost as much as $110 million in the scam; Hadassah, which lost $90 million; and the American Technion Society, which lost $72 million. In addition, at least four foundations — the Robert I. Lappin, Chais Family, JEHT, and Picower foundations — have announced they will be forced to close their doors because of their exposure to Madoff. "There are organizations we will see, within the next couple of months, close down, and others will merge, and others will be changed forever," said Jewish Funders Network president Mark Charendoff.
In addition to the losses suffered by foundations and charities, many organizations will be affected indirectly because they depend on donors who invested with Madoff. For instance, Carl and Ruth Shapiro, who have given about $60 million to Brandeis University over the past decade, lost between 40 percent and 45 percent of their foundation's assets, which had been valued at roughly $345 million before the scam came to light. Indeed, the loss of wealth by individual Jewish donors could be far-reaching. According to a 2007 Center on Philanthropy at Indiana University study, 91 percent of Jews give to charity, with the vast majority of that giving going to non-Jewish organizations such as hospitals, museums, and universities.
Despite such concerns, it is far too early to predict, as some have, the demise of Jewish philanthropy. According to Gary A. Tobin, president of the Institute for Jewish and Community Research, the situation, while "serious, hurtful, and painful," is "not devastating."
Barry Shrage, president of Combined Jewish Philanthropies, also expressed confidence that Jewish philanthropy will survive Madoff. "It seems hard to believe that this could affect more than 1 percent of donors, or even 1 percent of major donors," said Shrage. "This is a massive piece of economic news, on top of a lot of other bad economic news, but the Jewish people have been through a lot in 3,500 years, and this is not the time to panic."