1/14/09

JPost: Do We Pity the Wealthy Charity Madoff Victim?

Rabbi Emanuel Feldman makes a few really incisive observations and suggestions in his JPost Op-Ed article.

In so doing he also opens up the debate we need to have about the billion dollar oxymoron in the room.

How are we supposed to relate to the wealthy-charity Madoff-Merkin victim? There are big Jewish non-profits that have lost millions and assure us that they have taken a licking but they will keep on ticking. UD blog has picked up this JPost essay about Jewish charities and invokes it as a counterpart to her questions about universities.

Indeed it always sickened me to read about the wealth-poverty of the university. We could read in one press release about the massive success of the latest fund raising campaign -- topping hundreds of millions of dollars, even billions more lately, all added to endowments. And the same day we could read in another press release about how faculty salaries had to be held down down down and tuition had to go up up up due to tight budgets.

Now we brace ourselves for all kinds of conflicting appeals from various mega-wealthy-charities. First, we are fine, not to worry. Then later, we are at sea, must have more more money.

You know, some of the authentic non-profit charities really did get wiped out by the Madoff scams. So we should pity them. Or maybe not. They invested with risk - Madoff or Merkin -- and not with no risk - US Treasuries or Municipal Bonds or CDs. That is poor poor poor judgment for a non-profit, for a charity.

Back when I was raising pitifully small endowments for our programs at the U of M, I could swear I was told that our Foundation invested our funds in low risk fixed income instruments that yielded minimal but stable returns.

Something very very very bad happened along the way in the past few years. Non-profits and charities went from helping the needy -- to just being so so so greedy.

Feldman opines as follows:
For example, Long Island Jewish Health Systems lost almost $6m. But not to worry, they tell us, because this was "less than 1 percent of our portfolio." Not a bad portfolio, one that exceeds the real money threshold. Yeshiva University lost $110m. This is not that serious, it says, "because it is only 8% of our endowment total, and our work will not be affected." The Jewish Community Foundation of Los Angeles lost $18m. and the Technion, Bar-Ilan University, Hebrew University and Hadassah all lost heavy millions, but they all assure us that - even though they will never recoup those millions - they are not broke and will continue to operate and function normally.

AN IMPERTINENT question keeps popping up: If these and other Jewish institutions can afford to lose hundreds of millions of dollars without any affect on their programs, this means that each of their endowment funds runs into the billions. Why, then, are these and the others who lost so much constantly asking for funds? Why are they in a perpetual fund-raising feeding frenzy? Instead of raising money constantly, perhaps they should be giving some of it away...more ideas here

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