Here's a letter that wasn't published:
I read with great interest the recent article on venture philanthropy. I think
this is an interesting trend allowing philanthropic contributions to energize
the commercial process towards a good end. However, an important aspect was not
emphasized is the significant potential for conflicts of interest to arise.
Non-profits, such as medical charities, are given special status in the United
States by the tax code. However, in the scenario described in the article where
a philanthropist contributes money to making a biotech investment opportunity
more favorable for venture capital fund, he is essentially using charitable,
untaxed money towards a profitable end. This raises obvious conflicts: One could
imagine a person contributing money sheltered from taxes to a charity and then
having the charity redirect the funds to a commercial endeavor from which he
would directly benefit. Clearly, safeguards need to be developed to prevent this.
Letter in response to:
http://pubs.acs.org/cen/coverstory/85/8519cover.html
May 7, 2007
Volume 85, Number 19
pp. 19-26
Sowing Seeds Of Cures
As venture capitalists' priorities shift, venture philanthropists fill the gap
in funding of drug discovery by biotechs
Chemical & Engineering News (C&EN)
Lisa M. Jarvis
IN 1989, when scientists found the defective gene that causes cystic fibrosis,
it seemed that a cure, or at least an array of better treatment options, was
just around the corner. Research efforts, largely funded by the Cystic Fibrosis
Foundation (CFF), gained momentum, and by the mid-1990s, scientists had pieced
together much of the complex biology behind this debilitating and eventually
deadly disease.....
