The Maimonides School, an Orthodox Jewish day school in Boston, is one of the latest Jewish day schools to announce that it was hit hard by the Madoff scandal.
In a letter sent to parents and board members, Jeff Swartz, the chair of the school’s board of directors, said that the school could have lost up to $5 million from a trust left it by Maurice Saval, who died in 1988. That trust had yielded more than $8 million in total, according to the letter.
But much of Saval’s money was in recent years invested with Madoff, and Swartz estimates that $3 million, approximately 60 percent, of the Saval Trust was lost in the Madoff scandal, and perhaps another $2 million, says Swartz:
I say “estimate” and “approximately” only because the fraud investigation is just beginning; the various authorities that are involved are doing whatever such authorities do under circumstances as this. I know that the trustees of the Saval Trust are pursuing the redemption of their remaining investments held by the money manager that were not invested with the alleged perpetrator of the fraud. I also know that they have not yet been able to redeem the funds that they believe are still held by that money manager, and so we cannot say with certainty if the loss is limited to $3 million. Worst case, there could be an additional $2 million invested in New York. At this point, we simply cannot predict whether the Saval Trust will recover the funds still invested or any of the funds that had been entrusted to the alleged thief. As we know more, we will share the details with you.
The loss of the Saval Trust, along with the depressed economy could lead to a need for greater tuition assistance, lo lower enrollment in the school, a reduction in annual giving to the school and to an even smaller return on the remaining endowment.
Swartz made a plea for help:
The need to act with real financial caution with respect to our budget is self-evident. I have been engaged with the principals and the Board for nearly six weeks now, examining what can be done to minimize our expenses and maximize donations to the School. We were motivated by the meltdown in the financial markets and the economy. The incremental horror of the fraud has forced the work we have been doing to become even more urgent.
I appeal to you simply and humbly: The need for financial support for the School is real. For everyone who believes in our School, who benefits from our School, who shares a passion for what our School does, the need is immediate for each soul to bring forward terumah, as your heart motivates you.