Tag Archives: Bernard Madoff

We Forgive You Mr. Madoff: Love, Advisors, Nonprofits, & Jewish Community

Dear Mr. Madoff,

We in the Investment Advisory, Nonprofit, and Jewish community forgive you (well maybe not EVERYONE) Let me explain:

About a week ago, I asked people if you could ever be forgiven for the crimes you have committed against charities who help to make others lives better, your own people in the Jewish community, and from advisers in the investment business (which happens to be the same business I’m in). I asked the question whether you could ever be forgiven, not because I believe that you ever will, but because I wanted to know because of my own sense of religious curiosity, whether someone who had committed the crimes you had could ever be forgiven in the eyes of god.

Prior to today, I wondered and questioned whether it was even plausible for someone who had the reputation that you did, to knowingly deceive your fellow Jews, charities who help people, and innocent investors who turned over their life savings to you. I didn’t think that anyone had it in them to be able to look someone squarely in the eye when someone turns over their life savings to you (lot of trust there right, I know, because I have these same conversations every day with people), and KNOW the way you DID that you were GOING to bankrupt them. You looked people in the eye knowing you were going to ruin them.  Whoever read my previous posting on this subject, please forgive me.

Today I learned the truth. You are a monster. You knew exactly what you were doing. Sometimes when the train has left the station, it’s difficult to admit when we have done something wrong. We may tend to ignore difficult things because we don’t like to deal with them, perhaps because we are afraid. Sometimes there are consequences for this.  That’s not what happened in your case though. With you, you knew what you were doing was wrong, you SAID you knew that one day it would catch up with you. Why would you CONTINUE to lure more victims when you knew would get caught? You took money from charities, Jewish ones, as a fellow Jew. You took from CHARITIES and gave to YOURSELF. The enemies of the Jews are rejoicing for what you have done. You ARE a terrorist of the worst kind. You ARE a monster.

Ruth Ann Harnisch and I exchanged a series of emails about you after she posted a comment on my article about you where I questioned whether it was possible for someone to knowingly do what you did. I couldn’t believe it. Perhaps I’m a softee and believe that people deep down want to do the right thing. Ruth Ann Harnisch didn’t think I was looking at reality. She was right. You are the monster. We already know that now though. The discussion that we proceeded to have is worth repeating to others. It has to do with forgiveness. This was the question that I had originally asked. Could you ever be forgiven? The answer we came to was YES.

The kind of forgiveness we are talking about is the same kind of forgiveness someone has when a serial killer murders their child. We forgive the act. We forgive, because WE don’t want to hold on to the poisonous venom that we feel for you for what you have done. We forgive because forgiveness is good for us, Mr. Madoff, not for you. Make no mistake Mr. Madoff, you ARE a murderer.

As I looked into “forgiveness” further, I came across the story about “casting the first stone”

The King James Version of the Bible, in John 8:1 – 11 scribes and Pharisees had caught a woman in the act of adultery (the woman commonly referred to as the prostitute) and told Jesus who was teaching in the temple that the Mosaic Law required she be stoned to death. Trying to make an opportunity of this to trick Jesus that they might accuse Him, they, with stones in hand, asked Jesus what He says about the Law. After Jesus tried to ignore their repeated questioning, He told them “He that is without sin among you, let him first cast a stone at her.” One by one each man dropped his stone and walked away.

Jesus was not arguing with the judgment. Nor was Jesus arguing the law nor the woman’s guilt. Jesus was arguing with our right to execute the woman. Once all the men had dropped their stones Jesus confronted the woman and asked her if any of the men were still there to condemn her. When she answered “No man, Lord”, Jesus told her that neither did He – He forgave her of her sin. He did not excuse the sin of adultery/prostitution, he forgave her of it. All that is sinful before forgiveness is still sinful after forgiveness. Not only was Jesus not afraid to call a sin a sin, He was not afraid to call a sinner a sinner. He even reminded her of the sin of adultery/prostitution by telling her “Go and sin no more.”

I asked my Rabbi about the process of asking for forgiveness when you have committed a sin against another. He told me that in Judaism, part of  repentance is the process of providing some form of restitution. Another smart man named Randy Pausch, whose “The Last Lecture” became an instant classic about how to live said this; “When you do something bad and want to apologize, know that a good apology has three parts.  1) I screwed up 2) I’m sorry 3) (This is the part most people don’t do) How can I make it right?”

Today in court Mr. Madoff, I heard you say you screwed up, and that you were sorry. What I didn’t hear was any interest in making good on the wrong you had done. READ WHAT MADOFF TOLD THE JUDGE Fortunately for you Mr. Madoff, you will have a lot of time to figure out how to make it right. Frankly, I’m not interested and don’t really care what you do. I’ve learned that to forgive, does not necessarily mean you have to “receive” someone back into your life. So with that Mr. Madoff, I’ll let you know that I’ve forgiven you, and now I’m done with you.

“You Go, and Sin No More”


Investment Advisors, Nonprofits, and your friends in the Jewish community

Read my earlier post Can Madoff Ever Earn Forgiveness?

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Can Bernard Madoff Earn Forgiveness?

For months now, we’ve taken great comfort in reminiscing and sharing in our disgust of Bernard Madoff, and as Rabbi Marc Gellman of “The God Squad” put it in his “Open Letter to Madoff” in Newsweek, his “financial terrorism” against his own, and against charities who do good for others is “an abomination”.

Earlier today, I had a discussion with Deborah Coltin, Executive Director of the Robert I. Lappin Foundation who was one of the charities that was bankrupted by Bernard Madoff. I was interested in speaking to her because I had been intrigued with an article she wrote that I came across on eJewishphilanthropy.com where she discussed in detail how Bernard Madoff came into the life of Lappin, and then bankrupted the foundation. While this is a story that has been repeated over and over, this one was different. It came as no surprise to me, but it was the first one that I had seen that proved to me that I might be onto something. You see, the Robert I. Lapin Foundation is rising like a phoenix from the ashes, fueled purely by the passion of its employees and of Mr. Lappin himself, an 80 something year old man with left with little, who said, “I will not quit”. Shortly after seeing this story, I saw another story about Elie Wiesel’s foundation vow to rebuild from the ashes. From these two stories, I made a gentleman’s bet with my friend Robert Powell who writes for Marketwatch. I bet Bob a dollar that we would continue to see more stories of these charities rebuilding from ruin, and passion overcoming what others see as impossible. What drives these people? What lessons do they have to teach us?

At some point in life, we all will take a look and ask the important questions. Did I lead a good life? How will people remember me? Did I make a difference? What I have I recognized in these stories, and in others like my friend Jim Maclaren, one of my heroes, is that we define our limits in life. Nobody controls our destiny, not even Bernard Madoff.

So the topic of this article was “Can Bernard Madoff Earn Forgiveness?”. Can he? As a member of the Jewish community, I shared the disgust and outrage felt by so many others. It is my opinion that Bernard Madoff did not know or have any ability to comprehend the harm his actions could have on charities, and his own people. To allow my mind to think otherwise would be to go to a place reserved only for the true monsters in history. I cannot allow myself to believe that a man would knowingly line his own pockets at the risk of what has actually come to pass. Ask yourselves, did anyone foresee the financial meltdown in the markets that has actually occurred. While a few people might have, the financial community at large did not. I believe that Madoff’s greed caught up with him when he could no longer hide what he was doing. I don’t believe he ever could have anticipated his greed would have harmed so many people. I have to believe this for my own sanity and peace of mind.

So as Bernard Madoff sits in his cell reflecting on what he has done, I must imagine he is remorseful. It pains me inside to think of what kind of pain he must be going through. For those who have been hurt by him, this is likely the kind of pain they and other members of the Jewish community wish on him for all eternity. I began thinking, regardless of whether one is Jewish, Christian, Islamic, Buddhist, or Hindu, I believe that religion makes room for those who repent and express remorse for what they have done. From a scholarly perspective, I began to wonder what would God say? What would Bernard Madoff have to do in the eyes of God to be forgiven for perpetrating such harm on his fellow Jews and on his fellow man. My next question is aimed at the Jewish community. If Bernard Madoff consulted with rabbinical leaders and made good in the eyes of what Judiasm deems as acceptable, would it be enough? While we would all be quick to say “no”, think about that one and get back to me.

Are some crimes so outrageous that no good deed can repair the damage, regardless or how much remorse is shown? Is Bernard Madoff doomed to Hell, or can he earn forgiveness? What do you choose to remember, Madoff, or the stories of heroes who are brushing themselves off after being knocked down. Do we in the Jewish community have responsibility to all lend our hand and right the wrong that has been done? We all have a little hero in us don’t we? I prefer to hang in the company of heroes who know that ordinary people achieve the extraordinary and know that one person can make a difference. The secret is, life’s a lot more fun when you let your passion lead the way in good times and bad.

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Filed under Current Events, FOUNDATIONS, NON-PROFIT & CHARITY

Nonprofit Recession Survival Guide to Getting Donations

First the markets, then Madoff, now the Obama administration is proposing reductions in the charitable tax deduction for your biggest donors. What else could possibly go wrong? Oh yeah, I forgot to mention the snow day and nobody came to work. One thing is for certain; raising funds in the current environment is much more difficult that it was last year at this time. Here are some specific suggestions and things to keep in mind as you talk to donors:

Speak the Unspoken Truth
Personally, I like this tactic. Call it like it is. What are the most powerful four words in the English language? “I NEED YOUR HELP”. Talk to your existing donors about what is happening and the state of your organization. Tell them you need help. Let your donors know how the current environment is impacting your organization.

Be Specific With The Ask
This is something that is always a good idea. Even before the mess the last year, donor fatigue was certainly an issue. I believe that in general, nonprofits do a poor job marketing themselves when it comes to being specific about their accomplishments, how donations help, and making specific connections between the ask and the impact. Kiva.org is the opposite of everything I just said. Their supporters choose the cause (lending to a specific entrepreneur who needs a loan), and Kiva reports back on the status of the loan from the individual it was given to. It’s a terrific example of the donor getting involved directly with the cause that they support. Strategic, venture, or tactical philanthropy; call it what you want, people have been demanding more accountability in recent years. This trend towards greater accountability and transparency is only likely going to increase. Help your donors go from a “spray and pray” approach go giving, to being focused and knowing exactly what they are giving to.

Create A Donor Adviser Panel
Invite your top donors into a room for a “Manhattan Project” style round table. The objective of the group is not to gang up on them and tell them how badly you need their money, but to come together and brainstorm new ideas for raising funds. Let them know how much you have appreciated their past support and you are offering them a “no money required” way to help make a huge difference with the organization. Ally you want is their input. Not only will they feel appreciated, do you think there might be a possibility they could cough up a little extra after sitting in on that? If I were a betting man, I’d say your odds are pretty good. That’s not the objective though. Remember that. You are after their ideas and things you are not thinking about right now.

Address Financial Fear
Your donors are shell shocked with what’s going on in the markets now. Everyone is. Do you want to be someone’s hero? Address this head on. This is the one I think that nonprofits have traditionally been the most uncomfortable with. Even large organizations that have planned giving departments have struggled with “the line of control” that exists between donors and their professional advisory team. While planned giving folks want to “get that seat at the table”, and be INVOLVED in the conversation with the financial adviser, attorney, or CPA at the time giving decisions are being made, often they are not. Understand that there is a line, and there should be. Generally speaking, the unspoken truth is that donors know that planned giving officers have one motive, to get money for their organization. This is nothing new though, so what?

The real opportunity to be a hero here is to talk about some of the things that donors are afraid of now and things that they can do to feel more financially secure. The number one concern of the wealthy is that they will lose what they have. While this has always been the biggest concern, the fear is now being realized. Understand that unless your donors feel financially secure, they will likely not give at the levels they had given previously. You cannot help them feel more secure, but you can make recommendations that will. One of the things that’s at the top of the list is recognizing that donors and high net worth clients traditionally have had multiple advisers giving them advice. Their accountant is discussing their returns, their attorney discusses their will (or might not have in a while), and their “financial adviser” is talking only about their investments. Most people have no idea who they should be talking to about the big picture and their ability to achieve what’s important to them.  No wonder you have such a hard time getting a seat at the table, that’s because there usually IS NO table. The advice your donors receive is sporadic and fragmented in professional silos and generally NOBODY is discussing the big picture! Markets aside, the tax changes occurring are faster than the drop in their portfolio value and now is a good time for them to be meeting with their team to reassess where they are and reevaluate their goals.

The key to success lies in your ability to have a trusted relationship with your donor, understand what attracted them to you, what inspires them, what they are afraid of, and how to connect them with the appropriate resources who can help them achieve everything that’s important to them. To the extent you make yourself a master networker and not make it about you and your cause, you’ll be a hero. Ask your donors, “How can I help, YOU?”

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Filed under Current Events, ECONOMY, ESTATE PLANNING, Financial Life Planning, FINANCIAL PLANNING, INVESTING, NON-PROFIT & CHARITY, TAX, venture philanthropy

Council on Foundations Report: 28% Decline in Assets, Changing Investment Managers

A February 2, 2009 report published by the Council on Foundations showed that foundation assets had declined by 28% in 2008 among the 127 respondents who completed the survey. While the report points out that the decline included both grants and losses due to investment performance, questions remain about how foundations should invest money in an investment climate that continues to remain uncertain. The report highlights the fact that while many foundations had not made changes to their overall investment strategy, most were making changes to the investment managers, diversification, or overall risk levels in their portfolios.

Foundations are changing Investment Managers

  • 90% of foundations reported using outside investment managers
  • 48.6% of foundations had either changed, or were considering changing investment managers
  • 67% of foundations with assets greater than $100 Million had either changed, or were considering changing managers
  • Larger foundations (greater than $100 Million) were more likely to switch investment managers (67% vs. 41%) compared to smaller foundations under $100M

Increased use of Investment Policy Statements

  • 96% of foundations with assets greater than $25 Million had a written investment policy statement
  • Of those with written policies, 25% had reported changing their written policies since June 30, 2008
  • Smaller foundations with less than $100 Million were more likely to have changed their written policies
  • Use of written investment policies up among all groups

The report also pointed out that there was a significant trend toward attempting to lower investment fees, and a shift away from equity investments in favor of more conservative fixed income or cash. Nearly 41% of foundations surveyed held an average of almost 8% in hedge funds, although the report did not mention what impact if any the Bernard Madoff reports were having on hedge fund investments.

Richie’s Bottom Line:

Based on these findings, it appears that foundations are in panic mode. While most went into 2008 having written investment policy statements with their investment managers, foundations are giving them their pink slips anyway.  This begs a few questions in this manger’s view:

  • Do foundations understand what’s in their investment policy statement?
  • Is the investment dog wagging the foundation strategy or does the foundation strategy drive the investment mix?
  • Does the investment team have a meaningful relationship and understanding of where the foundations program objectives are or are they just being hired to manage a model portfolio allocation?

In my opinion, these are some of the critical questions that foundations should be asking as they make decisions about their advisors. While performance, fees, and written policies  seem to go without saying here, the real question foundations should be asking is; “Do I feel loved?” While that may seem like a silly question, it’s really no different than any other relationship. Do they love me for who I am or only for my money? How can you tell? Come on, you don’t really need me to answer that do you? Ok, fine I will… next time…“How to tell if my investment manager loves me”.

Click here to see the complete Council on Foundations Report

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