Imagine tiny molecule-sized machines flowing through your veins seeking out and destroying cells before they become cancerous. Imagine having a sight-restoring silicon chip implanted in your damaged eye, or receiving new organs grown from one of your own cells to replace diseased ones.
It may sound like science fiction, but mind-boggling discoveries like these are moving closer to reality each day as biomedical research inches forward in laboratories around the globe. And while the National Institutes of Health, plump this year with a $15.6 billion budget, will always be the biggest single funder of medical research, two private philanthropies, the Howard Hughes Medical Institute in Chevy Chase, Maryland, and the Whitaker Foundation in Rosslyn, Virginia, were there first to help jumpstart this revolution in medical technology.
The Howard Hughes Medical Institute
Known as much for his eccentricities as for his business acumen, Howard Hughes created the Medical Institute in 1953, not so much for lofty humanitarian ideals as the more immediate objective of depriving the IRS of his wealth. In 1953, Hughes Aircraft was in trouble. Four of its top scientists, frustrated by Hughes’s erratic micromanagement, had left the company to start their own firms. According to Hughes biographers James Phalen and Lewis Chester, the combination of the bad press generated by this corporate disorder combined with Hughes’s visceral hatred of the IRS led him to grant all of his Hughes Aircraft stock to a medical charity, the Howard Hughes Medical Institute, with himself as sole trustee. Over the next 23 years, constricted by a tangled financial web spun by Hughes himself, the Institute paid out just $1 million per year.
In 1976 Hughes died without a will, sparking years of court battles as anyone even remotely associated with Hughes tried to cash in. Finally, in 1983, a Delaware judge instructed the Institute to appoint court-approved trustees to oversee the Institute’s affairs. The next year General Motors absorbed Hughes Aircraft for $5.2 billion, and overnight the Institute became one of largest private philanthropies in the world. It currently doles out hundreds of millions to support “basic medical research, science education programs to train the next generation, and to increase the scientific literacy of the public,” says Dr. Joseph Perpich, vice president for grants and special programs for Hughes and former chief of policy at the NIH.
Armed with an endowment of over $11 billion, the Hughes Medical Institute (classified as a “medical research organization” by the IRS) awarded over $500 million for medical research and in direct grants in 1998—outpacing the philanthropy of the Ford, Pew, or Packard foundations.
The bulk of the money, $389 million, supports the medical research of Hughes-funded “investigators.” These researchers are selected every two to three years from among the top 500 scientists in biomedical research. Nobel laureates and members of the National Academy of Sciences are among the more than 320 investigators researching cell biology, genetics, immunology, neuroscience, and structural biology in hopes of curing or better treating everything from cancer and diabetes to cystic fibrosis and muscular dystrophy. Most of the remainder, $95 million, is earmarked for grants and special programs that support science education for school children, undergraduate and medical school biological science programs, and a variety of fellowships.
To manage the paperwork generated by the Institute’s hordes of applicants, Hughes decided a few years ago to handle grant applications through the Institute’s Web site. By this fall, all grant applications will move electronically to and from Hughes. But even with today’s high-tech gadgetry, grant evaluation still requires old-fashioned, roll-up-your-sleeves labor. The several thousand applications annually sent to Hughes are redistributed for review to outside panels of scientists and educators. These panels rate each application on a sliding scale before traveling to Hughes headquarters for two days of review, followed by plenary votes on each application.
Peering into the financial future of medicine, Perpich believes more and more dollars will be donated “to biomedical research” because the opportunities “are so great.” Recent trends already suggest that more donors are targeting specific areas of medicine. For example, the Donald W. Reynolds Foundation in Nevada just announced a $24 million grant to establish the Donald W. Reynolds Cardiovascular Clinical Research Center. Amway co-founder Jay Van Andel and his wife, Betty, pledged $200 million for a biomedical research facility, the Van Andel Medical Research Institute in Grand Rapids, Michigan. According to Perpich, such gifts are just the beginning as more foundation boards and wealthy individuals, having experienced in some way the trauma of disease or disability, will say to themselves, “My God, with an investment I really might be able to move this field enormously.”
In fact, some 24 years ago, a Pennsylvania electronics magnate made just such an investment.
The Whitaker Foundation
Established in 1975 upon the death of philanthropist and industrialist Uncas A. Whitaker, the Whitaker Foundation, with a 1998 endowment of about $440 million, has been a philanthropic pioneer in promoting biomedical engineering in colleges and universities across the United States and Canada. As the largest private American supporter of biomedical engineering, Whitaker currently funds hundreds of research projects, graduate fellowships, internships, and education programs.
Mr. Whitaker founded the Harrisburg, Pennsylvania-based firm AMO Incorporated, now the world’s largest manufacturer of electrical connectors and connecting devices. An engineer by training, he and his wife, Helen, gave to area charities. Both, however, had a passion for finding ways to apply engineering know-how to solve medical problems—a scientific field virtually nonexistent at the time.
Besides Johns Hopkins, which formed a biomedical engineering department in 1970 and has received generous Whitaker grants over the years, most research universities in the 1970s and early 1980s did not accept the field as a legitimate engineering discipline. The federal government had little interest in funding related research. But it’s just this kind of starved philanthropic environment, argues Whitaker president Miles Gibbons, where “private foundations can find a niche in medical research and make a real difference.”
Today, biomedical engineering thrives, sprouting biotech startups and making medical breakthroughs at a dizzying pace. For instance, the FDA is expected this fall to approve, after a series of clinical trials at Emory University, a device called Aptiva. Manufactured by Minneapolis-based Medtronic, Aptiva is a millimeter-wide electrode implant that stops tremors in Parkinson’s patients. As with so many other bioengineered products, researchers hope Aptiva will have many other applications for mental illnesses and neurological disorders like epilepsy.
Cultivating Aptiva-like inventions and discoveries is at the heart of the Whitaker mission, says Gibbons. “Our goal is to have biomedical engineering accepted as an engineering discipline and have it established as a department at most of the major universities in the United States.”
Such an ambitious goal led Whitaker a few years ago to plan something truly extraordinary in the foundation world. Whitaker plans to spend down its entire endowment by 2006.
Mr. Whitaker saw to it that his trust instrument had a provision recommending, but not requiring, his foundation to sunset within 40 years of his death. Whitaker “was concerned that private foundations often continue after they have achieved their purpose, principally to maintain their bureaucracy,” according to foundation documents. So after several years of discussion, Gibbons says, the board concluded, in 1993, that “the critical time to enhance the field of biomedical engineering was occurring in the 1990s into the early 2000s.”
This is because more and more universities by the early 1990s viewed biomedical engineering as the next vast frontier of research and began to create their own departments. The Whitaker Foundation, eyeing an opportunity, decided to use its money to fund as many budding “infrastructure development programs” as possible. Giving ballooned, from $23 million in 1993 to about $60 million last year.
This infusion of cash also led to the creation of a number of new Whitaker programs—the leadership and development awards programs, the special opportunities awards program, and the graduate fellowships program. All of this, Gibbons adds, “could not have occurred if we had simply been spending 5 percent of the asset value” of the Whitaker endowment. In all, not bad for a discipline that not too long ago had a hard time being taken seriously
Daniel McKivergan is associate editor of Philanthropy.