The US$ 50 billion securities fraud by New York investment manager Bernard Madoff has serious repercussions for some non-profit organizations. Madoff, the founder of Bernard L. Madoff Investment Securities, was arrested last week. At least two Jewish foundations have been forced to close because they had invested their funds with Madoff. The Robert I. Lappin Foundation in Massachussetts announced it would shut down after losing US$ 8 million, its entire capital. And the Chais Family Foundation, which gives out some US$ 12.5 million each year to Jewish causes in Israel, the former Soviet Union and eastern Europe, announced its closure on Sunday. The Gift of Life Foundation, a Jewish bone marrow registry that relied heavily on Madoff as a benefactor, announced on its website Sunday that it would immediately need to raise US$ 1.8 million to make up for recent losses. Sources close to New York's Yeshiva University, where Madoff served as treasurer of the Board of Trustees, said the school had lost at least US$ 100 million.
Philanthropic insiders say the fallout from Madoff's scheme could be even greater, according to JTA. They note that Madoff and others heavily invested in his fraudulent fund were major supporters of a plethora of non-profit organizations, served on their boards or advised those organizations on how to invest their money, in some cases placing large sums of the groups' capital in Madoff's hands. In Los Angeles, the Jewish Community Foundation's US$ 238 million Common Investment Pool lost US$ 18 million it had invested with Madoff, according to a letter sent out by the foundation. Among other Jewish institutions and foundations believed to be hit by the Madoff scandal are the American Jewish Congress, the Technion-Israel Institute of Technology, Steven Spielberg's Wunderkinder Foundation, Elie Wiesel's Foundation for Humanity and Carl Shapiro's charitable foundation.
