A year after Madoff's arrest, charities still picking up pieces
NEW YORK - Nancy Falchuk will never forget the phone call with the bad news. Hadassah, the century-old Jewish charity she had been elected to lead a year earlier, had just lost a big chunk of its endowment in a Ponzi scheme - maybe as much as $90 million.
NEW YORK - Nancy Falchuk will never forget the phone call with the bad news.
Hadassah, the century-old Jewish charity she had been elected to lead a year earlier, had just lost a big chunk of its endowment in a Ponzi scheme - maybe as much as $90 million.
The man responsible for this disaster was Bernard L. Madoff.
"I don't even say his name anymore," Falchuk said in a phone interview this week.
The leaders of scores of charities around the country, and the world, found themselves living a similar nightmare after Madoff's Dec. 11, 2008, arrest on charges he orchestrated the multibillion-dollar fraud, which affected thousands of investors.
With the global financial crisis in full bloom, 2009 was already shaping up to be a grim year for charities, but few have had such rough going as the philanthropies that learned a year ago yesterday that some or all of their finances had been wiped out in the Madoff scandal.
Some, like the $1 billion Picower Foundation, the $240 million Betty and Norman F. Levy Foundation, and the $198 million Chais Family Foundation, lost everything and shuttered within days.
Others survived but have spent the year cutting staff, curtailing grants, and hoping, often in vain, that new donors would step in and help replenish what they lost.
But while several charity directors said they were optimistic about the future, a few wondered whether more bad news lies ahead.
Over the last 12 months, investigators unraveling Madoff's finances have learned that several charities that had invested with the swindler had withdrawn millions of dollars over the years that, unbeknownst to them, were false profits stolen from other investors.
Some of those groups face the possibility that they could be asked to give that money back.