Leaders of the UJA-Federation of New York sent our an e-mail over the weekend assuring supporters that it had "no direct or indirect investments" with Bernard Madoff’s firm. The organization has extra reason to breath a sigh of relief, considering that J. Ezra Merkin played a role in determining its investment decisions. But unlike several other organizations and institutions, most notably Yeshiva Univeristy, the New York federation had strict policies that prevented Merkin from putting its money into a fund that he in turn placed in Madoff’s hands. As the UJA-Federation leaders put it in their emai: "There is much to say and learn here, but we are pleased that UJA-Federation’s internal governance procedures and oversight — designed to avoid conflicts of interests and ensure transparency — achieved their objective: to preserve financial resources for our community today and in the future."
Here’s the full letter:
In November, as the implications of the economic downturn became increasingly evident, UJA-Federation sent a Letter for Leadership that outlined the multiple steps we are taking to secure the community.
Since that time, as events have continued to unfold at a fast pace, we have intensified our efforts to reach out to donors to ask “those who can” to stand with us and provide the essential resources needed to respond to the challenges that face our region and our community. We are working with leaders at our beneficiary agencies to mobilize the extraordinary resources from our network to provide added support for families, such as financial counseling and pro bono legal support to those in need. We will keep you posted as these plans become clearer.
In the meantime, our community has had to absorb another shock to our system: the revelation that Bernard Madoff has been charged with massive fraud connected to his Bernard L. Madoff Investment Securities firm. Given the rumors and press reports that have circulated, we wanted to directly communicate with our donors and leaders.
UJA-Federation had no direct or indirect investments with the Madoff firm. There is much to say and learn here, but we are pleased that UJA-Federation’s internal governance procedures and oversight — designed to avoid conflicts of interests and ensure transparency — achieved their objective: to preserve financial resources for our community today and in the future.
Having said this, we are aware that many friends of UJA-Federation and generous supporters of Jewish and other organizations have experienced a substantial loss of assets. We open our hearts, extend our hands, and are gratified that the unique services of our network agencies are available to all who have been hurt. When combined with the already substantial decline in wealth as a result of the downturn of Wall Street and the economy, this is certain to lead to an increase in the human suffering, and to a reduction in philanthropic giving during the next few years. When further combined with cuts in government funding, we face a perfect storm of increased need and declines in both governmental and philanthropic resources.
We continue to take steps to tighten our budget without reducing money given to agencies for key services. We are busy at work making certain that we will be able to respond to this challenge for those who need our help and the growing numbers who will likely join their ranks in the next few months. Said differently, this crisis — as serious as it is — demonstrates yet again the unique ability of UJA-Federation and our network of agencies to provide a vital safety net. We will continue to communicate with you in the mont hs ahead. We invite your ideas and reactions.
We trust you will join us in volunteering and, for those who can, in contributing — all to make certain that UJA-Federation will be able to sustain and strengthen our community in the months ahead.
And let us add, happy Chanukah and best wishes for the new year to you and your family.
John M. Shapiro, President Jerry W. Levin, Chair of the Board John S. Ruskay, Executive Vice President & CEO
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