Revelations about the alleged Ponzi scheme run by Bernard Madoff is sending shock waves through the medical and scientific communities, with far-reaching implications for everything from diabetes research to palliative care, the Wall Street Journal reports.
Many individuals who lost significant sums with Madoff were generous supporters of medical and scientific causes, funding buildings at hospitals, long-term programs at charitable organizations, and high-risk research. They include Nine West shoe store chain founder Jerome Fisher, who lost millions in the scam and had pledged $50 million to the University of Pennsylvania last June for a new biomedical research center. Another, real estate magnate Mortimer Zuckerman, whose charitable trust lost about 10 percent of its assets in the scam, pledged $100 million to the Memorial Sloan-Kettering Cancer Center in 2006. Zuckerman said his Madoff-related losses will not affect that gift but that his trust "will have $30 million less to give away."
Other casualties of the scam include the Picower Foundation, which gave millions over the years to a range of health-related causes, including basic research not typically funded by the National Institutes of Health, and Madoff's own foundation, the Bernard L. and Ruth Madoff Foundation, which was a major supporter of the Gift of Life Bone Marrow Foundation. According to Gift of Life executive director Jay Feinberg, the group has lost more than $2 million in pledges since Madoff's scheme came to light in December, part of which was to be used to test 18,000 potential marrow donors. "That represents about eighteen bone-marrow transplants each year — for many years to come — that might not happen," said Feinberg.
The losses come at a particularly troubling time, as the sinking economy is taking a toll on both existing endowments and new fundraising efforts. With new donors harder to come by, nonprofits are worried they will need to put projects on hold, scale down future plans, and lay off staff. Research institutes also worry they may not be able to secure additional funding from NIH, whose grant making has remained flat for the past five years.
According to some experts, the effects of the Madoff scandal on health care and medical research could ultimately affect millions of people. "Long-term," said Rockefeller Philanthropy Advisors president and CEO Melissa Berman, "it's billions of dollars of funding that won't get made."
Bernstein, Elizabeth. “Madoff Scandal's Deep Impact on Funding for Health, Science.” Wall Street Journal 2/12/09.
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