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Few Charities Go Public With Policies for Reform
One year after the arrest of Bernard Madoff sent shockwaves through the world of Jewish philanthropy, only a handful of charities and foundations that had invested in Madoff's funds have publicly outlined reforms of their investment processes. Many others have yet to identify measures taken to change these practices, while still others say they have little intention of doing anything differently at all.
"The Madoff experience has been devastating in the Jewish community," said Mark Charendoff, president of the Jewish Funders Network, an influential organization that supports Jewish donors and foundations. "I think the only outcome that can be worse than going through this is going through it and not learning any lessons."
But in the year since Madoff's December 11, 2008, arrest for masterminding a $65 billion Ponzi scheme, it's not clear how many lessons have been learned. Charendoff says that while there was a sense immediately after the scandal broke that investment policies among Jewish foundations required re-examination, he has not yet seen major changes as a result.
In the broader not-for-profit world, some individual institutions have publicly discussed measures to reform their procedures, including the Jewish Community Foundation of Los Angeles, where Madoff investments were valued at $18 million, and Yeshiva University, which had indirect investments with Madoff valued at $110 million. The North Shore-Long island Jewish Health System, which had $5.7 million worth of investments with Madoff, has also discussed the measures it has taken to address flaws in its investment practices.
As if to illustrate Charendoff's point, however, some foundations that suffered Madoff losses told the Forward that they saw no need to examine and change their investment practices. One, the Robert I. Lappin Charitable Foundation, a major player in the Boston Jewish community until it lost to Madoff the entirety of its $8 million endowment, says that it will not make significant alterations to its governance or practices.
When asked what went wrong, the foundation's sole trustee, Robert Lappin, said that the answer is "very simple. We got involved with a crook."
"That question I think assumes that there was some flaw or mistake in making the investment," Lappin said....