Madoff Collapse Wipes Out $2M Grant from Picower Foundation
In 2002, the Barbara and Jeffry Picower Foundation gave MIT $50 million to build building 46 and establish what’s now the Picower Institute for Learning and Memory at MIT. At the time, the Picower Foundation had $1 billion in assets.
On December 11, 2008, Bernard L. Madoff’s $50 billion hedge fund collapsed, when Madoff (pronounced MAY-doff) admitted his hedge fund was actually a Ponzi scheme — a confidence scheme that took in money from more and more investors and paid the older investors with the money from the new.
Five days before Christmas, the Picower Foundation revealed that its $1 billion had been managed entirely by Madoff, the Foundation’s assets were wiped out, and it was closing.
Yesterday’s Wall Street Journal reported that MIT was expecting $2 million in funding from Picower this year — funds that now will never arrive. It’s not entirely clear what MIT was planning to use the funds for, but a December 20, 2008 Boston Globe article indicated that MIT received $200,000 each year from the fund to support graduate fellowships in the name of Norman Leventhal ’38.
Mark Bear, Director of the Picower Institute told the Journal, “This is a huge setback.” With respect to funding, “We’re back at the starting gate,” he said.