Wednesday, June 15, 2005

A Not-For-Profit Hospital Sues a Former Donor

The Boston Globe reported that the not-for-profit Massachusetts Eye & Ear Infirmary has sued a foundation for failure to deliver a pledged contribution. However, the pledge was apparently made to support a specific research program run by a doctor who has left the hospital, taking his research program with him. The Casey Foundation, run by Washington philanthropist Betty Brown Casey, had been funding work done by Dr. Steven Zeitels. After Zeitels and four other members of his team moved to Massachusetts General Hospital, the foundation asked Massachusetts Eye & Ear Infirmary to return any funds remaining in the grant. The hospital responded by suing the foundation for about half of the $2 million grant which it had not yet received, saying that the money was meant for the institution, not any particular researcher. Zeitels, however, said that the foundation had not meant to provide general funding for the hospital, but "was funding a specific program with unique investigators that was delineated both in the original proposal ... as well as scientific reports."
Suing a former donor seems to be a heavy-handed approach for a not-for-profit institution that presumably wants to receive money from other donors in the future. But it fits in with current US congressional concerns that some not-for-profit hospitals act more like for-profit corporations. (See our previous post here.)

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