L.A.’s Community Foundation loses 11% in Madoff scheme
The L.A. Jewish Journal links to a letter posted on Luke Ford's site, from the leaders of the L.A. Jewish Community Foundation:
Thankfully, none of the Foundation’s Donor Advised Funds were invested with Mr. Madoff’s firm and thus suffered no loss. However, the Foundation’s Common Investment Pool, which primarily consists of the Foundation’s permanent endowment funds and agency custodial funds, including the United Jewish Fund endowment, invested funds with Mr. Madoff’s firm in an amount aggregating $18 million. At the end of October, the investment was valued at approximately $25.5 million out of a total of approximately $238.6 million, representing approximately eleven percent of the assets in the Common Investment Pool.
The Foundation has engaged counsel and we are in the process of determining and assembling the relevant facts. We intend to thoroughly investigate and evaluate all of the facts surrounding this situation and to review the relevant policies, and we will make appropriate modifications in the event they are warranted. We are not in a position to comment further until we complete our factual investigation. As we acquire additional new and material information, we will keep you informed. Our intention is to be totally transparent as we work through this matter together. Notwithstanding any loss that the Common Investment Pool may experience as a result of Mr. Madoff’s conduct, we are proud of the Foundation’s long term record.
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Stacey Young
12/16/08 12:24 AM
Correction: As you will note in press release below, the Jewish Community Foundation of Los Angeles invested a total of $18 million with the Madoff firm, which represented less than 5% of The Foundation’s assets.
For Immediate Release
Contact: Jewish Community Foundation of Los Angeles
Marvin Schotland, President and CEO
323-761-8700
or
Foley/Freisleben LLC
Jerry Freisleben, Lynn Fireside
213-955-0020
JEWISH COMMUNITY FOUNDATION OF LOS ANGELES ISSUES LETTER ON IMPACT OF ALLEGED MADOFF FRAUD
LOS ANGELES (December 15, 2008)—The Jewish Community Foundation of Los Angeles (The Foundation) today issued the following letter to the public regarding the impact of the collapse of the Bernard Madoff investment funds. The Foundation, the largest manager of charitable gift assets for Los Angeles Jewish philanthropists, stated:
Dear Friends,
The Jewish Community Foundation of Los Angeles was shocked and outraged to learn that it is among the many victims of the massive alleged fraud attributed to veteran Wall Street investment advisor Bernard Madoff.
The Foundation invested a total of $18 million with the Madoff firm, representing less than 5% (five percent) of the Foundation’s assets.
Donor Advised Funds were not affected by the Madoff fraud. Donor Advised Funds are held separately in Treasury notes and other government instruments.
The $18 million was part of The Foundation’s Common Investment Pool, set aside for long-term endowment-type uses.
The loss, while unprecedented in The Foundation’s 54-year history, does not threaten The Foundation’s stability, its existing commitments, or its ability to maintain its leading role in the Los Angeles philanthropic community.
Despite this loss, The Foundation has a long-term record of generating favorable returns from its investments. The Foundation’s emphasis on diversification, both of investments and of investment advisors, helped limit the impact of the Madoff collapse.
In light of the substantial recent declines in the stock market as well as the financial impact of the Madoff situation, The Foundation is re-evaluating its investment strategies and examining ways to respond to these changed market conditions. This process includes a full review of The Foundation’s policies, practices and due-diligence procedures.
The Foundation is aggressively pursuing every possible recovery and remedy related to the Madoff situation.
We are committed to a fully transparent sharing of information with our donors, supporters, grant recipients and the community, and will continue to report to The Foundation’s constituencies as we learn more. This will include updates to a dedicated page on The Foundation’s website at http://www.JewishFoundationLA.org.
Sincerely,
Cathy Siegel Weiss Marvin I. Schotland
Chair President and CEO
ABOUT THE FOUNDATION
Established in 1954, the Jewish Community Foundation is the largest manager of charitable assets and the leader in planned giving solutions for Greater Los Angeles Jewish philanthropists. As of December 31, 2007, The Foundation managed assets of nearly $800 million and ranks among the ten largest Los Angeles foundations (based on assets). In 2007, The Foundation and its 1,200-plus donors distributed $78 million in grants to more than 1,850 organizations with programs that span the range of philanthropic giving. For more information, please visit http://www.jewishfoundationla.org
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