Cystic Fibrosis Foundation

Cystic Fibrosis Foundation

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Yale School of Management
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In 2020, Dr. Michael Boyle, the new president and CEO of the Cystic Fibrosis Foundation of Bethesda, Maryland, was in a fortunate position. He commanded a larger endowment than the biggest national medical charities, including the American Red Cross, the American Heart Association and the American Cancer Society:  $4.2 billion, eleven times budgeted 2020 expenses. 

Most of this money was earned over the course of 20 years by the pathbreaking venture philanthropy arm of the foundation. Biochemist Robert J. Beall, a former NIH researcher who was CEO through 2015, took a series of decisions between 1999-2015 that were unprecedented, acting on his belief that the mission of a charity could be advanced by industry alliances that earn it profits, a controversial concept. His decisions not only fostered the development of four novel drugs which have changed cystic fibrosis from a fatal to a manageable disease, he presented the foundation with $3.74 billion in earned revenue as a result.

But the new therapies fall short of being cures. They also do not help seven percent of the 30,000 people in the U.S. with cystic fibrosis. Foundation president Michael Boyle would like nothing more than to exhaust the billions in his endowment finding a cure. Yet drug discovery is a tricky business. Costs can exceed a billion dollars per drug and continue to mount. Most candidates fail. Can the Cystic Fibrosis Foundation repeat its success with venture philanthropy or was it largely the result of serendipity and a giant dose of luck? Furthermore, how should a charity balance investing money for a far-off cure with its responsibility to help sick people today?

Publication Date: December 31, 2020

Citation:  Gwen Kinkead, "Cystic Fibrosis Foundation: Balancing Venture Philanthropy with Treatment," Yale SOM Case 20-032, December 31, 2020.