Staring down a budget squeeze, Scripps Research Institute Chairman Richard Gephardt last year offered a Plan B for the prestigious nonprofit lab.
“We need to raise big gifts — I mean big gifts,” Gephardt said during an August interview with The Palm Beach Post. “I’d like to get $500 million … We’re on a whale-hunting expedition.”
With the stock market near record levels and billionaires thriving, the whales are biting — just not on the bait offered by Scripps Florida and the state’s other nonprofit institutes.
Deep-pocketed donors are giving to medical research, but their money is going to more prestigious, longer-established biotech hubs. Oil billionaire David Koch — a part-time Palm Beach resident — said in May he would give $150 million to the Memorial Sloan-Kettering Center in New York.
That’s atop an earlier $67 million gift to Memorial Sloan-Kettering, and it follows other eye-popping gifts by Koch to New York-Presbyterian Hospital, Johns Hopkins University in Baltimore and the M.D. Anderson Cancer Center in Houston.
Wall Street billionaire Henry Kravis — a part-time Palm Beach resident whose father’s name adorns the Kravis Center for the Performing Arts in West Palm Beach — said in May he would give $100 million to build scientific labs at Rockefeller University in New York. That follows last year’s $100 million donation by Kravis to Memorial Sloan-Kettering.
And homebuilder Dwight Schar, also a part-time resident of Palm Beach, recently announced a $50 million gift for a cancer center in Virginia.
Scripps Florida and Max Planck Florida, by contrast, have announced no single gift greater than $2 million. Max Planck Florida in 2012 offered naming rights to its Jupiter lab in exchange for a $10 million donation but found no takers.
The build-it-and-they-will-give strategy has yet to prove a winner.
“Perhaps they have not raised as much money as they thought, but they also understand that it takes years and years to build that relationship,” said Kelly Smallridge, president of the Business Development Board of Palm Beach County.
Part of the challenge, philanthropy experts say, is that Scripps, Max Planck and the state’s other institutes specialize in so-called basic research — arcane experiments and incremental breakthroughs that could be years or decades from helping patients.
Scientists often struggle to translate their findings, no matter how promising, into plain English, said John Havens, of the Center on Wealth and Philanthropy at Boston College.
“They’re talking about something in a membrane filtering out cells. So what?” Havens asked.
Donors often look for a visceral connection to their causes.
“It’s always more difficult to attract money to basic research that may have a payoff way down the line,” Havens said. “Basic research doesn’t quite fit that connection to people.”
The personal connections are more clear with universities. Miami Dolphins owner Stephen Ross, a part-time resident of Palm Beach, has given $313 million to the University of Michigan, his alma mater. Charles Johnson, another part-time Palm Beacher, gave $250 million to Yale. Private equity titan Steven Schwarzman, who owns a house in Palm Beach, this year gave $150 million to Yale.
As those gifts show, there’s no shortage of philanthropy from the nation’s wealthiest businessmen.
Hedge fund billionaire John Paulson recently pledged $400 million to Harvard, and philanthropist Ted Stanley last year gave $650 million to the Broad Institute of MIT and Harvard. Closer to home, the Schmidt Family Foundation in December promised Florida Atlantic University $16 million for an athletic facility that would include indoor practice fields for the football team.
Hospitals are another standby for philanthropists. Bernie Marcus, the former chief executive of Home Depot who lives west of Boca Raton, gave $25 million to launch the recently opened Marcus Neuroscience Institute at Boca Raton Regional Hospital.
Marcus offered no medical motive for his gift, but huge donations often come from billionaires who have visited hospitals as patients.
Palm Beach billionaire Daniel Abraham, who made his fortune with Slim-Fast, gave an undisclosed sum for naming rights to the $22 million fitness facility at the Mayo Clinic in Rochester, Minn.
“Mayo Clinic saved my life many times,” Abraham says on the plaque at the facility’s entrance.
The Mayo Clinic declined to offer details about Abraham’s treatment, but the personal connection is a common one for whales. Best Buy’s founder gave $49 million to the Mayo Clinic after his wife was a patient there, and the founder of the Generac generator company — who was treated at Mayo for free as a poor child — gave $100 million to the hospital.
Those sorts of gifts are “very practical,” said Greg Oravec, mayor of Port St. Lucie — a city whose two publicly supported biotech labs have struggled financially.
“Somebody has had their life touched, and they want a way to give back,” Oravec said.
Palm Beach donors haven’t ignored Scripps and Max Planck entirely. Jupiter investment banker Lawrence DeGeorge committed $5 million at the inception of the project. Philanthropist Alex Dreyfoos, for instance, gave $1 million each to Scripps Florida and Max Planck Florida. Nursing home magnate Elizabeth Fago gave Scripps $2 million, and Esther B. O’Keeffe Charitable Foundation of Palm Beach also gave Scripps Florida $2 million.
But those gifts pale in comparison to the huge sums being raised elsewhere, showing that Florida’s nonprofit research labs have struggled to live up to the outsized promises. The National Institutes of Health budget, once soaring, has flatlined. And pharmaceutical companies have tightened their belts. That leaves philanthropy as a crucial source of support, but one that has proven elusive.
“There’s maybe not an awareness of the spectacular things they’re doing at Scripps,” said Karen Marcus, a former Palm Beach County commissioner who’s now a consultant to Scripps Florida.
Gifts from the “whales”
How six part-time residents of Palm Beach are spreading their wealth:
Stephen Ross: $313 million to the University of Michigan.
David Koch: $217 million to the Memorial Sloan-Kettering Center in New York, $100 million to New York-Presbyterian Hospital.
Charles Johnson: $250 million to Yale.
Steven Schwarzman: $150 million to Yale.
Henry Kravis: $100 million to Rockefeller University in New York.
Dwight Schar: $50 million to Inova Health System in Falls Church, Va.