Should charities buy donor fraud insurance?

madoff / quote, originally uploaded by hulk4598.

The tales of woe from charities bankrupted by Bernie Madoff has understandably been a focus of attention, but now that he's in prison questions are arising as to the ethical & legal obligations of charities that benefited from his fund.

This post & comment thread on the New York Times DealBook blog are must-reads for anyone in the charity biz. Given the symbiotic relationship between charities and people who obtained their wealth through questionable means, getting insurance to cover the risks inherent in large donations may not be a bad idea.