Shapiro foundation reviews options
Madoff money scandal has area's nonprofits fearing funding hits
Boston's philanthropic Carl and Ruth Shapiro Family Foundation, which lost nearly half of its assets to Wall Street financier Bernard L. Madoff, yesterday said it expects to continue supporting its beneficiaries, including healthcare, education, and arts organizations. But the foundation stopped short of saying it would fund all groups in the future at the same levels it has in the past.
The foundation lost about $145 million in Madoff's alleged $50 billion Ponzi scheme, which came to light last week, potentially jeopardizing its stature as an engine of philanthropy.
Foundation officials are working with the Shapiros to determine how they can continue funding the scores of organizations that depend on its financial support - and at what levels - a spokeswoman said.
"We have every anticipation that we will be able to continue a strong level of support for our initiative grant recipients going forward," said the Shapiro family foundation spokeswoman, who asked that her name be withheld due to the sensitivity of the situation. "However, we are still assessing the full impact of the situation and our next steps."
Among the foundation's options would be to operate at a reduced level by making smaller gifts to individual organizations, continue the same level of funding by drawing down more from the foundation's principal in coming years than it has historically, or add new donations from Shapiro family members to bolster the 47-year-old foundation.
The spokeswoman wouldn't discuss which approach is being considered, however.
The foundation's value was about $323.9 million at the end of 2007, according to documents filed with the Internal Revenue Service.
News that the Shapiro foundation had been stung by Madoff's alleged fraud has rippled through the world of Boston-area nonprofits, which had been bracing for state budget cuts and a decline in contributions from other private organizations as the economic downturn extends into 2009.
"It's taken what was already a high level of apprehension up significantly," said Paul S. Grogan, president and chief executive of the Boston Foundation, the largest funder of nonprofit organizations in Massachusetts. "None of us know what the full effects of this is going to be. The anxiety that people are feeling is really palpable."
Grogan said the Shapiro family has been stalwart backers of a range of organizations, large and small. "They're emblematic of how incredibly generous the successful Jewish families have been in philanthropy in the Boston community," he said. If the Shapiros can step up their contributions in the face of the Madoff scandal, "it would set a tremendous example for the whole community," Grogan said.
The foundation, launched by Ruth and Carl Shapiro, who founded and later sold the Kay Windsor women's apparel manufacturing company in New Bedford, has given more than $80.3 million over the past decade to hundreds of schools, hospitals, arts groups, and community-based nonprofits in the Boston area and beyond.
Last year alone, it donated about $12.8 million to 146 organizations, ranging from Brandeis University and Beth Israel Deaconess Medical Center to the Boston Ballet and the Museum of Fine Arts to the West End Boys and Girls Club and Project Hope, which operates a shelter in North Dorchester.
Mikko Nissinen, artistic director for the Boston Ballet, said the Shapiro foundation is in its fifth and final year of funding the position of resident choreographer Jorma Elo, who's brought international attention to the organization. Boston Ballet received $55,000 last year.
While the foundation has said it will honor funding commitments it already has made, Nissinen said he was worried about future funding. "It's a concern," he said. "We are already in a bare-bones situation. There is no further place to cut."
Catherine E. Peterson, executive director of Arts Boston, the city's largest arts service organization, cited grants from the Shapiro organization that have helped expose children to the arts and make the arts accessible for people with physical disabilities.
"Now is the time when we need to say thank you for all the things they've done for us," she said. "If there's a silver lining, they've made the infrastructure of the arts organizations strong, and that will continue to have an impact."
But foundation beneficiaries have been struggling to assess the fallout and understand what it might mean for their organizations.
The nonprofit Pier Park Sailing Center in East Boston, which teaches disabled children and adults to sail in the summer, has received $24,000 annually from the Shapiros for staff salaries and equipment.
"This is really bad news for us," said the center's sailing coordinator, Maureen McKinnon-Tucker. "We don't know whether we'll be funded or end up getting cut. This is such a shock to everyone."
Deborah Bieri, senior vice president for institutional advancement at Berklee College of Music in Boston, said the school was grateful for the Shapiros' support of its music program for urban youth. The foundation donated $30,000 to Berklee College last year.
"They are an incredibly philanthropic family and have made remarkable gifts to many organizations in the city of Boston," Bieri said. "We're very sorry to learn of this turn of events. Our thoughts go out to them, and we hope to be able to work with them in the future."
Casey Ross of the Globe staff contributed to this story. Robert Weisman can be reached at firstname.lastname@example.org.