The Madoff fallout continues

An orthodox friend of mine referred to Bernie Madoff as "the Jewish Enron"--so much of his client acquisition was done through his social connections on the Jewish philanthropy circuit that when he imploded, the Jewish community was disproportionately affected.

I hadn't thought of what that would mean for Brandeis, but Felix Salmon suggests that it's become a major problem for their already-strained endowment:

The problems at Brandeis are exacerbated, said French, by the fact that "we have historically relied on gifts to support our operations more than other institutions" -- or, to put it another way, donations are a very important source of income for Brandeis, as opposed to simply being a way to boost the endowment, as they are elsewhere. Clearly Brandeis has seen a large part of its expected future donations disappear, thanks to Bernie Madoff: the promised and expected gifts didn't "ripen" in time, to use the euphemistic phrase of the philanthropic world, which means that the donor has finally dropped dead.

Neither French nor Reinharz ever quite came out and said that they needed future cashflow to replace the gifts which have been nuked by Bernie Madoff and the recession, but that was the clear message all the same. And in the absence of any other way of getting money, they've decided to start raiding their art closet, otherwise known as the Rose Art Museum.

They're still no doubt better of than Yeshiva, which lost $110 million to Madoff.  But this puts their decision to sell of the art from the Rose Museum in a different light.

Update  Daily Beast:  "Did Bernie Bankrupt Brandeis?"


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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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