Israeli organizations likely to suffer massive shortfalls from global financial crisis, Madoff scheme.
By JUDY SIEGEL-ITZKOVICHdoctor 88(photo credit: )
Israel's medical and research institutions, which depend heavily on overseas contributions for their infrastructure, growth and development, are likely to suffer massive shortfalls due to the world economic crisis and to businessman Bernard Madoff's alleged Ponzi scheme, which wiped out some $50 billion.
Some of the organizations and donors had invested in funds that Madoff gambled away, and most of them fear their contributors may have fallen victim to Madoff, the serious drop in the value of their Wall Street investments, and even unemployment.
Prof. Rafael Beyar, director-general of Rambam Medical Center and former dean of the Technion's Rappaport Medical Faculty, told The Jerusalem Post on Thursday he feared the crisis would have an "earthquake effect" on such institutions.
"No doubt, all the games in the financial markets, including the last one, will hurt medicine and research. I know of a Rambam researcher who completely lost a $200,000 grant, and another an $80,000 grant - both from a private foundation in the US. I am very worried about both young and veteran researchers," he said.
"It will not be easy to cope with this, as equipment and manpower will suffer. Institutions will find it hard to raise money in the future, and there will be much competition for the reduced amount of money that is available," he added.
Beyar said the situation would take a toll on infrastructure and new construction.
However, the Health Ministry has not yet announced any plans to assess the damage and consider alternatives that would prevent medical institutions from having to freeze research and development.
Various government, health fund and voluntary hospitals, research institutes and nonprofit organizations have admitted losses. These include the Hadassah Women's Zionist Organization of America, which funds development for the Hadassah Medical Organization (some $90 million); the Technion-Israel Institute of Technology (NIS 25m.); the New York-based Gift of Life Bone Marrow Foundation (which facilitates the testing, matching and transport of bone marrow for Jewish cancer patients in Israel and abroad); and the Jerusalem-based Yad Sarah.
The Technion has declined to offer details, and Hadassah representatives are tight-lipped. However, some organizations have placed "messages to our supporters" on their Web sites.
Gift of Life, for example, conceded that it had received calls and messages from supporters and the media about Madoff and his family foundation, which the organization said had enabled it to register 50,000 new bone marrow donors and facilitate 200 transplants. While Gift of Life's finances were not managed by Madoff Investment Securities, it said, "losses incurred by some of our contributors understandably impacted their charitable giving plans, resulting in withdrawn pledges... Therefore, we seek alternative sponsorship so we can achieve our recruitment goals for 2009."
The organization is looking for $1.8m. in additional funds to make up for the money lost in the Madoff scandal.
The Weizmann Institute of Science in Rehovot said it "did not invest directly in Madoff's funds. But some of our donors did, and it may affect us in the future."
Yad Sarah, chaired by former Jerusalem mayor Uri Lupolianski, is in the midst of expanding branches, as well as its Jerusalem headquarters, but its spokesman said it was not connected directly to the Madoff affair.
However, $1.5m. raised in 2006 at a fundraising event held by New York Mayor Michael Bloomberg was used to set up a respiratory equipment foundation, with interest meant for purchasing infant apnea monitoring equipment for Yad Sarah. It was invested in Ascot Partners LP, the fund run by J. Ezra Merkin, who made investments with Madoff's investment security company and who has long been a friend of Yad Sarah. As Merkin has not gone bankrupt, the Jerusalem organization is not sure what effect the situation will have on the rehabilitation equipment fund.
This had "no effect on Yad Sarah's ongoing operations and programs for 2009 or on our construction. But some of our contributing donors and foundations are sure to be affected."
Nevertheless, even before the world financial crisis and Madoff's alleged scams, Yad Sarah set up an efficiency committee to look into ways to save money and a team for thinking of new ways to raise funds.
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