For my blog post this week, I would really like to discuss
some current events that are occurring in philanthropy today, more specifically
the actions of William E. Rapfogel. Mr. Rapfogel was charged with grand larceny
as well as other offenses for admitting to the Supreme Court on Wednesday to
taking part in a conspiracy to steal more than $7 million from the Metropolitan
New York Council on Jewish Poverty. Mr. Rapfogel was the executive director of
this organization for 21 years. He was also a prominent figure in New York
City’s philanthropic and political circles. Mr. Rapfogel was hoping to acquire
this colossal amount of money by overcharging the charity for insurance and
pocketing the extra payments, which he would in turn use for political
contributions and personal gain.
The Metropolitan New York Council on Jewish Poverty is an
organization that was founded in 1972 after there were reported 300,000 Jewish
New Yorkers that were living in poverty. The American Jewish Congress and the
Federation of Jewish Philanthropies of New York helped fund the organization.
Even though the organization started in order to aid Jewish New Yorkers that
were living in poverty, today it helps all New Yorkers no matter what age,
race, sex or religion that they are.
It is absolutely shocking that Mr. Rapfogel led this
organization for more than 20 years and was able to steal more than $1 million
from it. This man had a lot of support and connections in New York’s political
and philanthropic spheres, and now no one stands behind him. I cannot even
imagine the embarrassment that his family and friends feel. A New York Times
article stated that his wife, his longtime chief of staff, and his close friend
and political figure Mr. Silver did not attend his case at the Supreme Court.
He used the money to buy one of his sons a house and he also funneled illicit
money to candidate running for office. I don’t understand how a man working for
a charity and making $400,000 salary felt the need to steal huge sums of money
from an organization that he leaded. It
is also interesting to note that Mr. Rapfogel did not publicly apologize; he
only provided a short explanation for what he had done. It is appalling how
people with a lot of influence politically can be overlooked and not evaluated.
He will be serving a lengthy prison
sentence and he also has to pay $3 million in restitution to the charity.
I feel that he should have some other punishment where he
must perform charitable duties in order to repay the Metropolitan New York Council
on Jewish Poverty. I also wonder how this will affect the charity since there
was corruption and conspiracy so deeply rooted within in it. What are your
thoughts on this whole thing? How do you think this will affect the charity? Do
you think something like this could have been prevented earlier on? Maybe
charities need to undergo investigation when they have such large pools of
money. I am interested in looking into other fraudulent cases that have
occurred in charities in the past.
This is an extremely interesting article, partly because I have never heard of something like this happening before. Of course there have been corrupt leaders of companies that have stolen money from their business, but that was never with a charity.
ReplyDeleteFor some reason, I think we are raised to believe that charities do good for the community, and thus people who work for them must also be good people. This example shows us that this is clearly not the case.
After this event occurred, I believe that this organization will have trouble remaining alive. As a potential donator, if I were to see this lawsuit on the news, I would not donate my money to them because I wouldn't know if the money was truly going to help poor New Yorkers, or if it was going into a millionaire's bank account.
This post highlights an issue that has become more prevalent in our decision-making process lately: transparency and accountability. Unfortunately, corruption in the nonprofit sector is not uncommon. As I noted last week, 13% ($40 billion) of the money given to charity was lost due to fraudulent practices in 2006. I would like to believe that conspiracies as large as the one Betty brought up are rare. However, this PBS report has me thinking otherwise.
ReplyDeletehttp://www.pbs.org/newshour/bb/nation-july-dec13-stephens_10-27/
The video reveals that over 1000 charities nationwide have “acknowledged losses of a quarter million dollars or more because of theft, investment fraud, embezzlement or other unauthorized use of funds.” This fact is simply deplorable and leads me to believe that even seemingly noble individuals should be subject to scrutiny when it comes to large sums of money. One issue I find with conducting more intensive investigations would be that many embezzlers are incredibly tactical about how they steal their money, and their methods are often not detectable on an organization’s 990.
In regards to how this will affect the organization in the future, I believe that this is a formidable barrier for them to overcome. It is a shame that one person can ruin the image of many, but I have a feeling that this will be the case in respect to the reputation of this organization. The press coverage that this conspiracy has brought on magnifies the impact on this organization. Despite this, I think it is important to not let this event cause us to transfer our disgust onto all charities. To cast our feeling towards Mr. Rapfogel’s actions onto other charities without proper grounds would obviously be wrong. The discovery of this fact simply means that we should hold accountability and transparency to a much higher importance in the nonprofit sector because no one is immune to the allure of excess wealth.