He put the funds of the charity into a mudaarabah scheme and lost the money
Question

                A few years ago, during a boom in the stock market, I made an agreement with the director of an institute for memorising Qur'aan that I would take 50,000 riyals to invest it by means of mudaarabah in shares, and I would get 20% of the profits, but we did not agree on anything in the event of loss. Now there is nothing left of it apart from 20,000 riyals because of the decline in the market. My question is: should I bear the loss and return that money to the institute? Does the director of the institute have to bear any of the loss as well as me? We are very confused and we want to set things straight.
Praise be to Allah.
      Firstly: 

    If a person 
    invests the wealth of another in a mudaarabah partnership, then the profit 
    is to be shared between them according to whatever they agreed upon, and 
    loss is to be borne by the owner of the money; all that the worker loses is 
    his work and his effort. It is not permissible to stipulate that he should 
    bear any of the loss so long as he has not been negligent. If he is 
    negligent or he goes against what is stipulated and that leads to loss, then 
    he is liable. 

    Ibn Qudaamah 
    (may Allah have mercy on him) said in al-Mughni (5/22): Loss in the 
    case of mudaarabah is borne by the owner of the money only, and the worker 
    does not have to pay any of it, because the loss is a decrease in the 
    capital, which belongs only to the owner, and the worker has nothing to do 
    with it. So the loss is taken from his (the owner’s) money and no one 
    else's. They only share whatever profits are earned. End quote. 

    He also said: 
    If it is stipulated that the mudaarib (the worker) is liable for the money 
    or a share of the loss, then this condition is invalid, and we do not know 
    of any difference of opinion concerning that, although the contract is 
    valid. This was stated by Ahmad. It is also the view of Abu Haneefah and 
    Maalik. And it was narrated from Ahmad that the contract is rendered invalid 
    by that; he narrated that from al-Shaafa‘i. That is because it is an invalid 
    condition, so it renders the mudaarabah invalid, which is similar to the 
    case if there is the condition that the profit will be for one of them only. 
    End quote from al-Mughni, 5/40. 

    Secondly: 

    If the 
    director of the institute thought on the basis of his own opinion that some 
    interest was to be served by investing some of the institute’s money - other 
    than zakaah funds - and the market was stable such that there was no risk 
    involved, then there is no blame on him in the event of loss, because he was 
    only seeking to serve a general interest and did not do anything that is 
    regarded as negligence with regard to what was entrusted to him. 

    But if he 
    acted hastily or negligently, or he was not allowed to invest the money, 
    then he is liable. 

    The scholars 
    of the Standing Committee for Issuing Fatwas were asked: 

    This 
    cooperative has some money that is frozen in the bank and it is not being 
    used in any beneficial way; this is after completing some services that the 
    group was required to provide whilst keeping this money aside for 
    emergencies. As we want to get some halaal returns, we thought of delegating 
    one of the financial or commercial companies to use this money in the kind 
    of business that it does, such as buying and selling building materials such 
    as iron and cement, and giving us the unspecified profit, whilst stipulating 
    that the materials that are bought and sold during a specific period should 
    be declared and the agent will take some wages for doing the buying and 
    selling. We hope that you can advise us whether this action, which is aimed 
    at making use of the money regarded as a trust borne by us to serve the 
    interests of the Muslims, is permissible. May Allah reward you with good. 

    They replied: 

    If the money 
    mentioned in then question is zakaah funds, then it must be given to those 
    who are entitled to it according to sharee‘ah once it reaches the 
    cooperative. But if it is not zakaah, there is nothing to prevent using it 
    for trade in the interests of the charity, because that brings more benefit 
    for the cooperative and those who are supporting it. End quote. 

    Fataawa 
    al-Lajnah al-Daa’imah, 
    9/403 

    And Allah knows best.