Madoff Fallout Hits Health Research
When news of Bernard Madoff’s alleged $50 billion Ponzi scheme hit Wall Street, the immediate reaction was to calculate its effect on the stock market and the personal finances of those who had invested money with the Florida-based financier. As time passes, however, the ripple effects from the financial black hole that Madoff managed are coming to light. One of the more significant areas to feel the pinch is healthcare research.
According to experts in the philanthropic field, the Madoff scandal could cause billions of dollars in research grants to disappear, since many of the charitable foundations that funded research projects have seen their assets dry up. One of the more troublesome casualties, according to a Wall Street Journal report, is the Picower Foundation, which funded projects that focused on diseases like diabetes, lymphoma, and Parkinson’s. Researchers were notified last December that the foundation, whose funds were managed by Madoff, would no longer be making grants.
Other big-money grants are at risk, as several charitable foundations lost millions in Madoff’s scheme. Although many researchers are confident that money already pledged will eventually show up, they fear that the losses from Madoff’s investments will cut back on foundation gifts down the road. The researchers also fear that even trusts that that didn’t invest with Madoff are feeling the financial pressure on several fronts—a stock market that is under water, reduced income from new fund-raising efforts, and little hope of increased grants from the federal government.