Making Jewish philanthropy work in a post-Madoff world

My personal mission, like many others', is to take our family's wealth and use it to create a lasting legacy.

By JAY RUDERMAN
June 30, 2009 20:54
3 minute read.
Making Jewish philanthropy work in a post-Madoff world

Bernard Madoff 248 88 . (photo credit: AP)

 
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The sentencing of Bernard Madoff has ignited a media storm of interviews from unsuspecting victims, business associates who knew him (or thought they did) and reports about more Ponzi schemes discovered in the wake of the New York financier's crimes. And for those of us in the Jewish community, pained by a scandal where massive amounts of Jewish philanthropic capital were wiped out overnight, the situation has been heartbreaking. Pair that tragedy with the worldwide financial crisis and you can see why many Jewish funders, truly dedicated to a myriad causes, have become more cautious. In the face of corruption, lost fortunes and unemployment, funders who support Jewish organizations, and those who run them, have had to make tough decisions. Such a loss of faith requires solid solutions for Jewish charitable giving in this new environment. That's why I've chosen to publicly discuss my family foundation's approach, hoping that both nonprofit organizations and their funders might benefit from our experience as they evaluate their relationships with one another in a world where the money that once flowed freely has now slowed to a trickle. MY PERSONAL mission, like many others', is to take our family's wealth and use it to create a lasting legacy. This requires us to continually identify and invest in philanthropic initiatives that can translate our family's values into enduring and practical societal change. Our approach is based on the premise that concentrating one's giving strategically, on a few areas, maximizes the impact of philanthropy. We believe that to enact real change, it is better to go "narrow and deep" than "wide and shallow." For example, given our passion for helping people with special needs, we focused on improving the Jewish education of special-needs children in the greater Boston area. After several years of maintaining this focus, we've ensured that special-needs children can now receive an education in any of the city's 14 Jewish day schools. Knowing that not all funders can work alone, and because there is now a finite amount to be invested in any particular project, partnerships with other like-minded funders can extend a funder's philanthropic reach. Such partnerships can be extremely challenging, but if both parties are seeking to forcefully address a need, it makes sense for them to maximize their impact by joining forces. In addition to such alliances, well-run Jewish organizations need to know the challenges they face and have a "business plan" to address the problem. It's therefore vital for organizations to view their funders' true potential, beyond the financial realm. The days of funders writing large checks and trusting that the organizations they support will use the money wisely are numbered. Indeed, more and more funders are employing the model that our foundation, among so many others, has adopted - that of engaging in full-fledged partnerships with organizations in the projects we're investing in. MANY FUNDERS have achieved success in business, public service and other pursuits. This gives them insight into how to bring similar success to a philanthropic project. Those Jewish organizations that fail to recognize this will soon have difficulty raising the funds they require. In today's extraordinarily difficult economic climate, Jewish funders should then apply sound business practices to their giving. It's important they conduct due diligence just as if they were entering a business venture or making a personal investment. That means demanding full financial transparency from the organizations with which they seek to partner. It's also critically important that they examine the organizations' fiscal policies, including the board's role and ultimate fiduciary responsibility for financial oversight. Too often, Jewish organizations lack sufficient strategic planning and resist adapting to new realities. By taking a "doomsday" approach and telling funders that the organization will not survive without their support, they convey organizational weakness. And nobody I know, whether in business or in philanthropy, wants to invest in an organization that is stating openly that it might collapse. Our tradition obligates us to give back to the community - for those of us most fortunate, all the more so. That's why strategic planning, combined with collaborative partnership efforts among Jewish funders and organizations, are essential ingredients in ensuring that our philanthropy has a lasting impact on the entire Jewish world. The post-Madoff world demands nothing less. The writer is the president of the Ruderman Family Charitable Foundation.

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