Culture, Justice, Mishegas, Politics

Tzuras in the world of Jewish charities and philanthropy

Two major stories have broken recently regarding the effects of the financial, market and credit crises on the world of Jewish philanthropy and its effect on charities.
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First, from the Forward, comes this story about your favorite Jewish casino mogul and mine, Sheldon Adelson. The “richest Jew in the world” has been a major financial supporter of many things, good and bad, top amongst them has been Taglit-Birthright, the program which sends Jewish young adults to Israel for the first time on ten-day trips. More than $70 million has been donated to Taglit-Birthright since 1999 by Sheldon Adelson, a major part of the $110 million spent in the last near decade. However, according to the exclusive report from the Forward, Adelson may defect on a promised $20 million which was to fund trips for this coming summer.
Adelson has reported 95% loss on stock in his Las Vegas Sands Corp. While not the full extent of his wealth, his majority shareholder stake in the company must make a substantial amount of his $26.5 billion, which he is estimated to be worth. According to the Forward, the depreciation of his stock has cost him around $20 billion in paper cash. Adelson’s losses have direct effect on Birthright’s programming,

Birthright, after a record-setting 2008 — boosted, according to Mark, by enthusiasm for Israel’s 60th anniversary — will be shrinking its footprint this year, though by how much is still up in the air. Birthright officials have said that they expect the organization to spend $75 million on 25,000 trips in 2009, although that assumption could change if gifts such as Adelson’s do not materialize.

It may be an unpopular opinion, but perhaps Taglit-Birthright needs to rethink the source of its funds. I, for one, question the validity of sending Jewish youth to Israel under such circumstances. Lest they end up in similar circumstances to our second story that just broke over Shabbat.
Stock Market “wiz,” Hedge Fund manager and former chair of NASDAQ Bernard L. Madoff has been arrested by federal investigators, who have seized the holdings of his company, Bernard L. Madoff Investment Securities, LLC. Madoff is accused of defrauding investors of $50 billion in a pyramid scheme.
Madoff has been a major donor to Jewish causes and institutions. The most painful and shocking realization of this affair is not so much that Madoff’s philanthropy will obviously come to a halt as the feds seize his assets, but rather its effect on those that entrusted Madoff and his company with their investments.
According to the JTA, the Robert I. Lappin Foundation, a Salem, Massachusetts based charity that spreads an average of $1.5 million per year to Jewish causes has been forced to fire all of its employees and close its doors. Sadly, all $8 million the foundation had was invested in Madoff’s fraudulent activities, and now it’s all gone.
As it says in Shemot (Book of Exodus 28:8) “You shall not take a bribe, as bribes blind the wise and pervert the words of the just.”
In my opinion, Jews like Adelson and Madoff give us all a bad name and perpetuate dirty stereotypes. I’m not making a parity between the two situations–Adelson may have made his money from the weakness of peoples’ will (gambling? come on, it’s no holy business) but he, as far as I know, has never been implicated in defrauding charities. Madoff may not have made his money from a depraved business, but stock markets and investment securities are also no holy work.
Let us pray for the time when Jews invest their money with truth and justice, and righteous causes benefit. Let us pray for the end of deceit and fraud in our people’s financial activities. Let us hope that one day we can send our children (or ourselves) on charitably sponsored programs that seek to instill a connection between the land of Israel and Jewish youth knowing that the funds are clean. Let us hope that Jewish charities can safely deposit their money with a Jewish philanthropist knowing that they are not being defrauded, and that the causes such charities support can receive needed funds. Ha’lavai.
At this point, all I can say is, oy veis mir.

14 thoughts on “Tzuras in the world of Jewish charities and philanthropy

  1. For those of you not familiar with the Lappin foundation, they’ve also sent hundreds of teens to Israel for free through their Youth To Israel program, as well as dozens (if not hundreds) of Jewish educators on their Teachers to Israel trip. They’ve made innumerable other contributions to Jewish education and Jewish life on the North Shore. The simple but direct message on their website ( is heartbreaking. For the relatively small Jewish community of Massachusett’s North Shore, the Lappin Foundation was a lifeline.

  2. I get it that people are uncomfortable with money from gambling, but are we really saying that Jewish causes shouldn’t accept money from people who sit farther to the right than we do on the political spectrum? We’re not exactly talking about the New Israel Fund here, we’re talking about taglit/birthright. (Is it problematic that the program that takes such a huge number of young adults to Israel for the first time seems to lean right? Probably, but that’s a different debate.) Do we really fault an Israel trip like this for taking money from someone connected with ZOA? This seems unreasonable to say the least.

  3. dlevy-
    I intentionally left out his support of the swift boat ads, the ZOA and Bush policies because those are his personal politics. I am very aware of his right-wingedness. My question is should we be taking money from casino moguls, irrelevant of their politics. You bring up an excellent point that plagues the left, there is a wideheld belief that right=wrong, and that’s just not fair. But, it is a sad thing that Adelson must default on his $20 million pledge. That doesn’t have to do with his politics, or really his casinos. My point is more, here are these two rich Jews who have screwed Jewish charities, should we not be more careful who we take money from? That’s all. I don’t care if they’re right- or left-wing; I just want them to be honest people.

  4. Justin – I was mostly responding to the othe comments, but now that you mention it… I don’t see how losing buckets of money in a crash = screwing charities.
    I can’t afford to make all of my usual donations this December. Am I screwing my charities?

  5. dlevy-
    No, Adelson is a different case. There are two issues in the post-1) Bernie Madoff’s douchebaggery, 2) Adelson’s money and do we really want it anyways; unless he orchestrated to crash to get out of making the donation 😉 j/k

  6. Hi Justin,
    you said:
    That’s all. I don’t care if they’re right- or left-wing; I just want them to be honest people
    I have no problem arguing facts with left or right wing people. Gambling is a legal business, nasty political smears are in fact not honest, no matter what side of the aisle they’re from. i have more of an issue with the lying than the gambling, personally.

  7. well, thats fewer cluster bombs for Israel (ablessed by rabbis), fewer stones to build houses on illegal land, fewer stones therefore to throw at arab kids, the list is endless, I for one am celebrating, what is it about these rich jews that contribute to making the world a less safe place, give me doctors and dentists and film producers any day although Iam sure they send their shekels to Israel too, thank you for this posting

  8. Let me get this straight: YU, UJA’s, Lappion Foundation etc. are taking charity money and investing into hedgefunds?! Is that ethical?
    Would you contribute funds to a non-profit had you known it was being invested like this?
    Also is a hedgefund typically low risk or similar to any other market investment?
    Something stinks in the charity business . . .

  9. Adelson may have commited but his stock plummeted 95%, reneging on commitments is never cool but he has obligations to his shareholders. Imagine how it would look if he filed bankrupcy (which his company is teetering with) and contributed 20 mil to some Jewish cause. There would be an outrage . . .

  10. YU, UJA’s, Lappion Foundation etc. are taking charity money and investing into hedgefunds?! Is that ethical?
    A huge portion of the money invested in private equity and hedge funds comes from nonprofit sources. The biggest investors tend to be the major university endowments and state pension funds. But there are plenty of good old fashioned charities holding “alternative investments” as well.
    These investments are indeed much more risky than keeping funds in cash or government-issued bonds, but they can also return a lot more money. At Harvard’s endowment, for example, private equity investments returned double the overall 10 year return through June 30, 2008. They’ve lost a ton of money since then, but I’ll bet that their alternative investments have still yielded better long-term results than their overall portfolio.
    Why would it be unethical to seek better returns for a nonprofit’s endowment? I can see how it would be irresponsible to put all an organization’s eggs in one basket, but unethical?

  11. Merliner — You need to distinguis the donor’s personal assets from those of the business. They generally are not the same. If, for example, Adelson personally pledged x amount of dollars, those may be dollars already “socked away” from prior, successful years. If he has them, he can do whatever he wants to with them; regardless of the financial condition of the business. But, if the donation was pledged by the corp., then fiduciary responsibility to the business comes first.
    themicah — directors/trustees of non-profits walk a tightrope in these situations. When interest rates were meaningful, endowments could be held in CDs, Treasuries and other bonds, and principal was preserved and income flowed. With interest rates low, trustees look for greater returns for the benefit of the organization. Obviously, they seek to avoid loss of principal. Consequently, the seek out “qualified” money managers to turn to. Sometimes, despite the best due diligence, the money manager proves to be unqualified, such as Madoff appears to be.
    I’m not really uncomfortable with how Adelson, or someone like him, makes his money; I just want it donated to my kid’s dayschool, to control the rise in my tuition payment.

  12. Tool Old to Jewschool Steve: Adelson invested nearly half a bil from his back pocket into his company to help keep it afloat. So you cant always distinguish between private assets and corporate interests – they are often interdependent.

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