How The Madoff Scandal Affects Philanthropy

The following is a press release from American Friends of ALYN Hospital:

Implications of Madoff Fraud on Philanthropic Community

NEW YORK, NY, December 23, 2008:  Cathy Lanyard, Executive Director of American Friends of ALYN Hospital, a non-profit organization, held a press conference today to discuss the “Implications of Bernard Madoff on Fundraising and Non-Profit Organizations.”

Madoff’s alleged $50 billion Wall Street fraud, one of the largest in U.S. history, has devastated non-profit organizations across the United States, particularly Jewish charities. Coping with pain and anger after disclosure of the alleged multibillion-dollar Ponzi scheme, charities are feeling the affects of distrust and betrayal. The Madoff fraud should serve as an enormous wakeup call to all charities to revisit and redefine best practices.

American Friends of ALYN Hospital announced that it is spearheading a philanthropic coalition. Lanyard invited charities and nonprofit organizations to join ALYN Hospital in ushering in a new era of trust in philanthropy. The coalition will oversee best practices and accountability within nonprofit organizations and philanthropies.

“Charities must adhere to better financial standards and oversight. The same scrutiny one would utilize when investing personal finances should be utilized for investing the fund’s money,” Lanyard said. “Despite the fact that we didn’t have a penny invested with Madoff, the manner in which we protect and safeguard donor funds has been scrutinized, questioned and discussed with our donors endlessly. Large and small charities all over the U.S. are affected by this scandal, and we need to explore options for survival and use this as an opportunity to redefine best practices. This is not an issue solely for the Jewish philanthropic community – it affects all charities.”