Bernie Madoff, Jewish Charities and Tzedakah

Why Charity by Jews is Important to World Causes

Jul 17, 2009

Bernard Madoff's crimes dismayed the Jewish community not only because of the magnitude of their impact, but because such actions attack the very ethics of Judaism.

Much has been written about the effect of Madoff’s Ponzi scheme on the financial health of charities and charity foundations. Online articles range from outward rage to analysis of the implications of the disappearance of more than $50 billion from financial markets.

What isn’t discussed as often is the ethical and religious implications of Madoff’s actions as they relate to charities and Jewish charitable giving – what is called tzedakah in Judaism.

Tzedakah – Jewish Charitable Giving

Tzedakah is at the heart of Jewish principles, and a cornerstone of the Jewish religion. Often translated as “Jewish charity,” tzedakah means “justice,” or "righteousness" in Hebrew and is much more than a casual form of benevolence.

In earlier generations (and still evident in traditionally observant homes), counter spaces and windowsills were lined with pushke, or tzedakah boxes, for weekly donations. As many can still remember about their grandparents’ homes (particularly if their families had immigrated from Eastern Europe), there wasn’t one container, but many, and the charities could range from planting trees in Israel to feeding children in impoverished countries.

Nor is tzedakah limited to Jewish charities or Jewish foundations. The Mishneh Torah, Judaism’s Oral Law, points out in relation to the mitzvah to save a life, that all human life is considered sacred.

The Importance of Tzedakah

The 12th-century Jewish scholar, Rabbi Moses Maimonides stated that there are eight levels of charity. Each has its merits, but the most benevolent of all is the individual who extends a hand to the poor, either in partnership, a loan or another act that “strengthens the hand” of the recipient.

The seventh level is where the donor does not know the recipient he is aiding, and the recipient does not know his benefactor. The act of benevolence is performed without any gain to the donor in stature or recognition.

Some of the organizations that lost money through Bernard L. Madoff Investments Securities, LLC were responsible for coordinating support for unemployed or poor individuals in various countries. Others, like Morse Life, in Florida, provided housing and nutritional support for senior citizens and other populations.

The charities that lost money – and in some cases were wiped out – relied upon the “unseen” charity donor that either through the pushke can or donation checks were fulfilling Maimonides’ seventh level of charity.

Jewish Donations to Humanitarian Causes

According to research conducted by the non-profit Institute for Jewish and Community Research, 25 percent of the largest donations that are received by educational institutions are from Jewish donors. More than 70 percent of grants that Jewish foundations make for humanitarian needs go to non-Jewish causes. Tzedakah as a Jewish ethical and religious principle has a profound effect not only on the survival and success of Jewish charities, but upon the health of North American humanitarian causes in general.

“The loss of trust and stability that donors and nonprofit groups are experiencing gets to the heart of the real damage Mr. Madoff has done to the American charitable spirit,” the late philanthropist and scholar Gary Tobin wrote in his recent article, "Madoff: Atomic Bomb for Jewish Charities," which was published in The Chronicle of Philanthropy.

Madoff’s actions, said Tobin “introduced fear and uncertainty about how nonprofit groups use their money.”

According to Tobin, the financial effects of the scandal are already evident. Reduced charity donations from Jewish sources reflect the public’s reticence to commit funds during uncertain times. Organizations that have relied upon the generosity and in some cases, the moral implications of tzedakah, are now suffering.

Since the 1960s Jews and the Israeli government have enthusiastically provided educational support for Russian Jewish children. According to a July 14, 2009 blog by Jacob Berkman on JTA.org, the 26-school program is at risk of closing for lack of funding. Most of the $100 million it receives in support comes in small donations from Jewish and Christian donors, and this year, the bulk of the donations aren't there.

Maimonides' Seventh Level of Tzedakah

It may be too soon to tell how deeply the scandal has scarred the Jewish community’s trust of nonprofit organizations. Unfortunately, recent events underscore Maimonides’ perceptive advice that, “(one) should not contribute to a charity fund unless one knows that the person appointed over the fund is trustworthy and wise and a proper administrator...”

While it can be argued that the investors who were burned in the scandal are not to blame for Madoff’s deceptions, Maimonides’ statements still carry a painful ring of truth.

The copyright of the article Bernie Madoff, Jewish Charities and Tzedakah in Judaism is owned by Jan Lee. Permission to republish Bernie Madoff, Jewish Charities and Tzedakah in print or online must be granted by the author in writing.