It’s hard to separate the two big philanthropy stories of the week, Bernard Madoff’s guilty plea and the UJA-Federation of New York’s decision to lay off 11 percent of its staff.
But there might be a convoluted silver lining here.
Obviously, Madoff bilked billions of dollars from philanthropists and charities, feeding heavily on Jewish prey, and New York was his primary hunting ground. The New York federation did not lose money off of its $675 million endowment through Madoff because it had strict rules prohibiting it from investing with board members or their clients — avoiding a potential nightmare because J. Ezra Merkin, who headed the federation’s investment committee, lost nearly $2 billion of his own clients’ money after investing the entirety of his Ascot Partners hedge fund with Madoff.
Still, the New York federation’s donor base was hit hard by Madoff and most figured the organization would see a heavy drop in this year’s fund-raising totals.
The federation, which raised $154 million through its campaign last year, did cut more than $8 million from its operating expenses, but its president and CEO, John Ruskay, says that his staff and advisers are anticipating only a 10 percent drop off in the campaign this year — and that is including both the Madoff losses and the other huge losses its donor base has taken in the stock market.
Yes, it is a huge dip. But if the assumption was that Madoff had wiped out the Jews of New York, Ruskay and his people would be anticipating a more severe drop.
This underscores another point — our philanthropy problem is not a Bernie Madoff problem. The troubles we faced existed before Madoff’s theft was exposed and they would have worsened had he not bilked one penny from anyone.
The voyeur in all of us wanted to see a trial. We wanted the details of how Madoff committed his crime, but that could have been a year’s long distraction. We were at least saved from that and can hopefully just stick to the work of rebuilding this hurting system.
