Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Saturday, January 31, 2009

Madoff's destruction of private foundations

Madoff_bernard

By now, most people are aware that Bernard Madoff's schemes cost wealthy individuals a huge amount of money.

But, what is not as often discussed is the impact of his schemes on small private foundations.

Here are some excerpts from  Nicholas Kristof, Madoff and America’s (poorer) Foundations, NY Times, Jan. 29, 2009:

I’ve obtained a list of nearly all the private foundations that invested money directly with Mr. Madoff, at least at the time of their most recent tax filings. Even in the unlikely event that they cashed out since then, they may still have to repay the money to others.

What is staggering is how many of these 147 foundations had all their assets invested with Mr. Madoff and may have been wiped out as a result. For example, the Avery and Janet Fisher Foundation, which supported everything from various museums to meals-on-wheels programs, appears to have been fully invested with Mr. Madoff. And the same is true of dozens more.

The Picower Foundation of Palm Beach, Florida, with nearly $1 billion in assets and a major contributor to non-profits across the nation, has already announced that it will close down because of its Madoff investments. Its beneficiaries have included a neurological research institute at MIT, the New York Public Library and the Children’s Health Fund.

Many non-profit organizations invested with Mr. Madoff and will suffer a double-whammy, losing not only their own savings but also the support of foundations that previously donated regularly but are now broke. And they will also lose some of their individual donors who were invested with Mr. Madoff as well. * * *

I’m posting the list because this is a matter of public concern: These foundations serve the public interest, and if the non-profits that rely on them have been financially crippled we should get a heads up.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2009/01/madoffs-destruc.html

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