(FORTUNE Magazine) – When Covenant House was rocked by a scandal involving its founder, Father Bruce Ritter, some prominent business leaders were embarrassed. Covenant House, which runs shelters for homeless adolescents in 15 cities, was a favored charity of Alan ''Ace'' Greenberg, CEO of Bear Stearns. Its board includes William E. Simon, the former U.S. Treasury Secretary, and Ralph Pfeiffer, onetime head of IBM's World Trade subsidiary. Ritter denied the allegations but resigned. An investigation by Kroll Associates detectives found evidence of sexual misconduct and questionable loans to Ritter, but no major financial improprieties. Sister Mary Rose McGeady, an executive of Brooklyn Catholic Charities, replaced Ritter. Donations are still running 20% below last year's $88 million. But other charities have shown they can bounce back. Boys Town of Omaha, which was accused of hoarding an excessive endowment of $200 million in 1972, weathered the criticism. Greenberg believes business contributors will decide whether to reopen their coffers in the next six months. Says he: ''Covenant House's friends are still there. The need is still there.''