When Wall Street Meets Charity

It has never been so true that charity begins in the home. People who are interested either in investing in biotechnology or in giving their money to charitable health care foundations should be wise enough to investigate a bit more deeply where their money is ultimately going. It has been known for a very long time that conflicts of interest exist in many nonprofit organizations. Many of these philanthropic organizations have a board of directors that decides where the money donated will be spent: what art works are going to be purchased by the museum, what research project or biotechnology company will be given money, etc. It happens quite often, not too surprisingly, that museums will acquire paintings by the same artist as those owned by their board members. That is to say that the museum itself can falsely increase the value of a piece of art just by putting it in their collection which in the end will benefit these board members. In modern art, thus, the value of an art work depends to some extent on the reputation of the museum who owns the works of the artist. It happens too that medical foundations often invest their money in projects where their sponsors have direct or indirect financial interest. It’s a very old story that such foundations have sometimes been created for the sole purpose of improving the reputation or cleaning the conscience of their founders. A famous example of the flip side is that of Chancellor Nicolas Rolin who was the treasurer of the Duke of Burgundy (one of the most powerful men in the world during the 15th century) who abused his high position to make a huge fortune. Overcome with remorse for what he had done, he gave an important part of his fortune to a foundation he created in 1443 in Beaune, France. This is the origin of the famous “ Hospices de Beaune,” a public hospital free of charge for poor people. Six hundred years later, we humans have not changed so much. I recommend the reading of the story of Dendreon, a biotech company that is the first to bring to market an immunotherapy that makes use of the body’s own immune system to fight cancer and that has a proven efficacy with negligible side effects. It’s a perfect illustration of what has to be changed in the financial markets!!!
share on: facebook Sphere: Related Content