Charity hole

The San Diego Foundation, an aggregator of charitable donations that have sometimes gone to questionable causes, such as a fund for school superintendent Alan Bersin that was used in part to buy fine wines for a reception at his Point Loma residence, is trying to calm well-heeled donors about the effects of a recent Wall Street scandal. “The San Diego Foundation wants to assure all of our donors that we have no affiliation with Bernard Madoff, and that none of our investments and assets are impacted by this situation,” says a statement on the foundation’s website.

But the organization has not gone unscathed during the financial meltdown. Its financial statement for the period ending June 30 of last year, posted on its website two weeks ago after a reporter’s inquiries, revealed that the foundation has dabbled in speculative instruments, including the collateralized debt obligations that are front and center in Wall Street’s maelstrom. According to the document, the so-called CDOs are “supported by pools of residential and commercial mortgages,” along with pools of other assets producing income, such as credit cards. But when markets froze, the foundation couldn’t get its money out. According to the report, the foundation recorded an “unrealized loss” on these auction rate securities of $6.2 million last year and still held $13.4 million of them that were “illiquid.” Notes the report, “The estimated fair value of these securities no longer approximates par value.” In addition, the report said an interest rate swap agreement the foundation entered into had a negative value of $501,000 and is reported as a liability.