An air of disbelief hangs over the Los Angeles offices of Just Detention International these days.
The human rights organization, aimed at preventing the sexual abuse of prisoners, is spread thin with 11 staffers doing the work of 13. What's more, the second half of a $300,000 grant it had counted on receiving this year has evaporated not a trivial sum for a group with an annual budget of just $1.2 million.
Count the small non-profit among the more low-profile victims of the $50 billion investment Ponzi scheme allegedly run by New York investment manager Bernard L. Madoff.
"It's very dramatic for us," said Lovisa Stannow, executive director of the agency, which recently changed its name from Stop Prisoner Rape. "A layoff is always sad, but to have to do it right before the holidays was especially upsetting. Quite frankly, it's infuriating."
The financial blows taken by major agencies such as the Jewish Federation of Greater Los Angeles and the Jewish Community Foundation have been documented in many headlines. Lost in the shuffle, however, have been the stories of many lesser-known charities that have suffered major losses in some instances the result of a trickle-down effect.
In the case of Just Detention, the hit was taken because of investment losses experienced by the founders of the New York-based Justice, Equality, Human Rights and Tolerance Foundation, one of its biggest donors. Created by a couple interested in criminal justice, the foundation had to close its doors after the family lost most of its fortune, which had been invested with Madoff.
Just Detention is now out a second $150,000 payment funding the creation of a model program in the Oregon state prison system based on a new federal law designed to reduce prisoner rape. Stannow said she also fears losing another potential grant of an unspecified amount to create a similar program for prisoners in California.
It is unknown exactly how many grants had to be rescinded by the New York foundation, but some other agencies that lost grants were San Francisco's Immigrant Legal
Resource Community and the Death Penalty Clinic at UC Berkeley's School of Law.
Carl Terzian, whose L.A. public relations agency, Terzian Associates, represents many local non-profits, said numerous small local agencies not necessarily connected with the New York foundation have been hit hard by losses related to the collapse of Madoff's investment house.
His phone has been ringing nonstop since the scandal broke. "Lots of small nonprofits have been hurt," said Terzian, who estimated that he personally has heard from at least two dozen ripped by the scam.
Most of them, however, prefer to remain anonymous, at least for now as they figure out how to survive and avoid such losses in the future.
"We've picked up several (as clients) that have been touched," Terzian said. "They want to act more like businesses."
Madoff, a respected Wall Street investment manager, handled money from individual and institutional investors worldwide, allegedly using new funds to pay large dividends until the whole scheme collapsed late last month. In many cases, investors didn't even realize that Madoff was handling their money, given how much of it was funneled to his firm from third-party advisers and managers.
Stannow said her staff was "in shock" after learning, just days after the Madoff scandal broke, that the agency would be "so dramatically affected" by the loss of the foundation it had depended on for years.
One of its first actions was to lay off a program assistant and the agency's communications director. Now the question has come down to how to reshuffle duties while connecting with donors to raise more money.
Among other causes, Just Detention lobbies and works with government officials to enact laws protecting inmates, promotes study and education on prisoner abuse, and refers inmate victims to centers for counseling.
At least one major agency the Jewish Funders Network based in New York announced plans last month to help non-profits hurt by investment losses. Many of them, like Madoff, are Jewish. Just Detention is not a Jewish-oriented agency, but might be eligible for such help.
The intention of Jewish Funders is to create an information hub listing agencies in danger of closing or that have been identified as prime candidates for mergers. Foundations involved in the network also will create a pro bono resources bank through which agencies can share legal, accounting and development costs, as well as call for donations to provide emergency funding.
"It's a very serious situation," Stannow said regarding the prospect of finding new ways to support the non-profit's mission. "Criminal justice work falls very clearly into the hard to fund category. Of the available donors, only a small portion does this kind of thing."
In the meantime, the agency is making do with less, funded only by its remaining pool of unrestricted grants. Among the potential losers from all this, Stannow said, could be Madoff himself.
"If he goes to prison," she said, "there will be fewer resources than ever available to defend and protect his basic rights."
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Madoff Scandal Hits SoCal's Jewish Community
- Financial Advisers Willingly Went Along on Madoff's Ride
- Jewish Community Foundation Awarded Record $100M in Grants Last Year
- Transparency Rules Aid Non-Profit Investors
- Third-Party Investors Likely to Feel Legal Heat
- Corporate Citizenship & Giving Guide: Empower Your Philanthropy Through a Donor Advised Fund
- New Business Models Needed for Nonprofits
- Charity Groups Finding Savior In Foundation