We came across this article yesterday morning; with all the pre-occupation with Madoff’s sentence we held it for today so as not to be relegated to the back burner. The author, an attorney and law professor, raises questions worthy of discussion.
from The New York Times:
Should Charities Repay Their Madoff Money?
…And another troubling aspect of the Madoff fraud has emerged in the past few weeks. It is now being alleged that certain charitable foundations and individuals on the whole reaped profits in the millions, if not billions of dollars, from Mr. Madoff’s misdeeds.
And much of this money may have been subsequently donated to innocent charities. This situation raises some of the most troubling questions about Bernie’s legacy. First, did charities on the whole benefit from Mr. Madoff’s crime? And second, do these innocent charities have a moral or legal obligation to return the money?
…The bottom line is that there were net winners in the Bernie Madoff scandal, and many charities received money that was at best tainted by Mr. Madoff, and at worst directly attributable to his crime. In the coming months, many of the people who benefited from Mr. Madoff, inappropriately or otherwise, are going to be sued or otherwise asked to return the money they received.
What about the charities who received this money after it was distributed?
Proverb 20:17… “Bread of deceit is sweet to a man; but afterwards his mouth shall be filled with gravel.”
If my bank mistakenly deposits $1000 in my account, I know the money isn’t really mine and that the bank will require it of me one day. I would be foolish to spend what is not rightfully mine, no matter how good the cause.
Since the money Mr. Madoff “gave” to charity was not ever his– it was, for example, the money that belonged to a widow whose husband had died just two weeks before. Mr. Madoff patted her hand, looked her in the eye, and told her she was safe and would be secure. If a person robs a widow in order to look good to the world and to get a tax write-off, how can a charity in good conscience keep that money when a widow now has no home?
Tonight on Charlie Rose I also saw a husband and wife who had put all their money for the last thirty years into a retirement account with Mr. Madoff. They had scrimped and saved and gone without to save that money with a man they felt was insured by the U.S. government (which is not paying back what the victims put in). They lost more than 1.5 million dollars and their home. They have nothing now and are starting over.
Keeping the stolen money Mr. Madoff “gave” is just like Achan in Torah taking the forbidden cloth and gold and hiding it in his tent. His theft was a tragedy for himself, his family, and all of Israel. He tasted the gravel that comes from eating the bread of deceit. The truth came out because G-d hates a lie. Keeping the money that didn’t belong to Madoff and doesn’t belong to the charity would actually make the charities accessories–unwitting perhaps– but when revelation comes there is no more excuse.
The Jewish people are called to be a light to the nations. It is time for Jewish charities to take the high road, to do what is right, and to return whatever unspent money they still have. Sin– even other people’s sin– always takes us farther than we want to go, costs more than we want to pay, and lasts longer than we want to stay. Teshuvah (repentance) must start with the leaders and with the charities. Mr. Madoff faced his day of reckoning today. For all of us, the command still holds, “Thou shalt not steal.” The pop quiz has begun. Will we pass or fail this character test? Will we stand with the bystanders, the victims, or the perpetrators?
I don’t know who Pam is but clearly she’s not of this planet if she thinks charities still have any money left from gifts that were generated by the Madoff Ponzi scheme. First of all, while Madoff made personal contributions, much of the charitable giving came from people like the couple she saw on Charlie Rose – people who lost everything and will now not be able to make the generous charitable contributions they were used to making. The charities that benefitted from people like this couple and many other people who have been wiped out but previously made generous gifts to nonprofits, used the money over the years for their charitable missions. Pam seems to think that these charities have money sitting around. So, Pam, let me tell you as a professional in the nonprofit community, the charities have been financially devestated. Many have been forced to close. Mergers are being discussed. Massive layoffs of staff have taken place leaving charities working at bare bones and their workers on the unemployment line. The services they provide have often been cut back. Every nonprofit from museums to food banks to homeless shelters is suffering. What do you think happens when you make a donation to charity?!! It’s spent!!! Usually right away! Charities are already suffering from the loss of major support from people hurt by Madoff. I don’t think we can or should expect them to do more. These are NONPROFITS Pam, they don’t need to take the high road – THEY ARE THE HIGH ROAD.