Foundations to aid groups Madoff hurt

Many of the largest Jewish foundations in the nation yesterday said they will try to provide financial and legal assistance to nonprofits that lost money in the Bernard L. Madoff scandal, which has caused significant damage to the world of Jewish philanthropy.

At a meeting in New York hosted by the Jewish Funders Network, officials representing 35 large foundations said they would launch an effort to assist organizations that were supposed to get money from charities that no longer can honor commitments because of Madoff, to provide free consulting services to small nonprofits facing legal or tax problems related to the alleged fraud, and to offer bridge loans to charities facing potential collapse, said Mark Charendoff, president of the network.

He said the organizations represented at the meeting have billions of dollars in assets, and most were not directly harmed by the $50 billion Ponzi scheme allegedly carried out by Madoff, who managed money for many Jewish organizations, as well as hedge funds, individuals, and others.

Authorities charged Madoff on Dec. 11 with securities fraud for running a scheme that paid one set of investors with money from another.

Among the foundations represented was the Chais Family Foundation, a Jerusalem-based foundation assisting Jewish causes in Israel and the United States. Last year, it claimed $178 million in assets but it's closing because it had invested with Madoff.

Charendoff, offering the highest estimate to date of damage to the Jewish community, said he believes the losses are at least $2.5 billion, and "it's getting bigger."

Among the affected philanthropies were the Robert I. Lappin Foundation of Salem, which closed this month because its estimated $8 million endowment had been invested with Madoff, and the Elie Wiesel Foundation for Humanity Inc., which had nearly all of its assets of $15.2 million invested with him.

"There was a good deal of anger in the room," Charendoff said. "These are all people who have committed their lives to Jewish philanthropy, and here this guy went around and partly used this facade of being a Jewish philanthropist in order to identify and exploit his victims."

Charendoff said the foundation leaders plan to reach out to the network of Jewish federations around the country, such as Combined Jewish Philanthropies in Boston, to try to help.

"Just to be clear, we're not under any impression that we can solve or fix this," Charendoff said. "Jewish tradition teaches us that there's no one who is responsible to complete the work, but that doesn't mean that you have no responsibility to contribute to the work, and that's what this is all about."

To help nonprofits in danger of closing, Charendoff said, the large foundations will try to determine whether there are surviving foundations willing to fulfill pledges made by failing foundations. And, he said, the remaining foundations would try to help nonprofits that express a desire to merge or otherwise collaborate, rather than close their doors.

He said the group will also try to create a "pro-bono human resources bank," which would provide legal, accounting, and human resources assistance to nonprofits.

He said the legal help could be used by nonprofits that want to litigate in an effort to recoup some of their losses, or to help charities that made money with Madoff and face efforts at "clawbacks" from other creditors.

Michael Paulson can be reached at mpaulson@globe.com.