Unfortunately, the alleged Ponzi scheme reportedly orchestrated by Bernard L. Madoff continues to cause ripple effects locally in Massachusetts. Aside from wealthy individual investors, many institutional clients have suffered as result of this scheme, including several charitable organizations. While some organizations have suffered substantial financial losses but appear able to absorb the damage without folding, some have suffered a fatal blow.
One such charitable organization is the Picower Foundation of Palm Beach, Florida, run by Jeffry and Barbara Picower, well-known philanthropists. This charitable foundation has been one of the largest philanthropic organizations in the United States, with assets at one point reaching a half a billion dollars. The foundation invested a great deal of its money with Bernard Maddoff, and suffered devastating losses as this scheme collapsed. Barbara Picower, the foundation’s president, announced earlier this week that the foundation has ceased all grant-making activity, and will close its doors. The effect in the Massachusetts medical community will be felt painfully: The Picower Foundation had donated heavily to the Massachusetts Institute of Technology, to fund brain research, and to Harvard Medical School, for diabetes research. Now, that funding, and the important medical results that flow from research in these areas, will cease.
Madoff was arrested by federal authorities earlier this month, on December 11, and charged with orchestrating and running a Ponzi scheme – which essentially pays one set of investors with money from another set. In addition to the Picower Foundation, the Boston family of Carl and Ruth Shapiro, which has funded tens of millions of dollars in medical research in Boston, reportedly lost over $145 million, and the Robert L. Lappin Charitable Foundation in Salem, Massachusetts, was also forced to cease operations last week.