The Kabbalah Centre, a Westside spiritual organization that is the focus of a tax evasion investigation, is shutting down the U.S. operations of a global children's charity that has raised millions from celebrity followers and more recently drawn the scrutiny of IRS investigators.
SFK or Success for Kids, a 10-year-old nonprofit based at the center, will close its programs in American public schools at the end of the academic year, the charity's president, Michal Berg, announced in a letter Wednesday to supporters. Berg wrote that the decision was prompted by larger than expected overhead costs associated with translating the religious organization's lessons into a nondenominational curriculum.
"The reality is that the current public school expansion strategy is not cost-effective and it is difficult to scale the program to impact more children," she wrote.
The letter made no mention of a federal grand jury in New York that has issued subpoenas seeking information about the center, the charity and the Berg family, which controls the center. A spokesman for the center said there was no connection.
"It was completely unrelated," the spokesman, Mark Fabiani, said.
SFK, formerly known as Spirituality for Kids, ran classes in about 40 schools in the U.S., including several in the Los Angeles Unified School District. The programs had been criticized by some officials and parents, who said they were quasi-religious. In her letter, Berg, the daughter-in-law of Kabbalah Centre founder Philip Berg, said that as an alternative to the classes, SFK was planning to present its curriculum on a free website.
The charity, which listed assets of $7.5 million in its 2008 tax filings, the most recent available, will continue running programs in Brazil, Costa Rica, England, Panama and Malawi, but about 20 staffers have been laid off.
The nonprofit began as a kabbalah-focused private grade school next to the center's Robertson Boulevard headquarters, but soon grew to include other programs, including an initiative for African children that became a separate charity led by Madonna, the center's most famous adherent. The finances of that charity, Raising Malawi, are also being examined by agents of the IRS' criminal division.
Madonna headed SFK's board and has been a major donor, as have several other celebrities, including Barbra Streisand and fashion designer Donna Karan, who gave $2 million in recent years.
Kabbalah, the study of mystical Jewish texts said to hold the secrets of the universe, was little known outside of Orthodox Jewish circles until about 15 years ago, when Madonna began studying at the center. Other high-profile entertainers, including Ashton Kutcher and Demi Moore, followed and the center experienced enormous growth.
Los Angeles Times staff writer Richard Verrier contributed to this report.