Israeli Nonprofits, Shaken by Madoff Collapse, Rethink Strategies

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JERUSALEM — The collapse of Bernard L. Madoff’s $65 billion Ponzi scheme, whose victims included many American Jewish organizations and philanthropists, has also hammered a number of Israeli social service groups and wiped out at least three foundations that supported Israeli causes.

The aftershocks are still being felt here, but it appears that the scheme created losses in Israel amounting to at least hundreds of millions of dollars. It also damaged dozens of organizations, from the venerable matriarch of the American Zionist movement, Hadassah, whose hospital employees in Israel are taking pay cuts, to lesser known groups, like one that works with runaway Jewish and Arab teenagers and is weighing layoffs.

The Madoff scheme’s collapse has forced educational institutions and organizations that aid the sick and the needy to reassess their investment strategies, and Israel, which depends heavily on the nonprofit sector to provide such services, has been forced once again to confront its dependence on American donors’ largess.

The crisis “has exposed a very substantial weakness” among nonprofits here, said Eliezer Yaari, executive director of the New Israel Fund, an advocacy organization that promotes equality and social justice in Israel.

http://www.nytimes.com/2009/04/05/world/middleeast/05israel.html?_r=1&partner=rss&emc=rss

[GoesTo11]

1. It's worse to Ponzi a bunch of non-profits than to Ponzi a bunch of wealthy investors

I have to think he did this on purpose. He is just so evil. He couldn't have caused more harm if he'd wanted to.

[bemildred]

2. It's all about the money.

It's a mistake to think he gave a shit about anything but the money.

[Idealism]

3. It wasn't a campaign against non-profits, just one man's greed willing to steal from anyone. n/t

[GoesTo11]

4. I guess non-profits were more trusting

He did seem to get a disproportionate amount from them, but you're right, it's probably just that they made an easy target. Stealing from the collection plate.

[Idealism]

5. Non-profits use word of mouth references more for their fundraising needs it seems

and many people trusted the former chair of NASDAQ...

[bemildred]

6. All Ponzi schemes rely on trust.

It's nothing particular to this one. Lots of them work off of religious connections, or other institutions that are "faith based".