Wednesday, January 27, 2016

Just Who Is JDRF Therapeutic Ventures, LLC? Why is it such a secret?

You might not have realized it, but a few years ago, the folks at JDRF secretly (it wasn't generally publicized, although some organization bigwigs, board members, etc. knew about it) established a legally separate organization to handle their industry partnerships which is legally organized as an LLC rather than a non-profit organization.  This enables the JDRF to not have to disclose much detail in the nonprofit's 990 tax returns which are subject to more scrutiny from just about anyone, as the tax returns for the nonprofit must be disclosed to the public.  Some this quite beneficial and perhaps even useful, as industry partners often demand a level of secrecy that really wasn't feasible as a nonprofit organization.  That's probably the "official" line the organization would give you if it was ever pressed on it.  But some of it also enables the organization to effectively hide (from financial scrutiny, anyway) where its putting at least some of your money as a fundraiser because the LLC has absolutely no legal obligation to disclose anything, even if the LLC is run by JDRF.  If the LLC was consuming a top-5 slot among recipients of JDRF's funding, we might see some clues in the organization's tax returns, but that seems unlikely, hence its really a big black hole that the JDRF can use to shield itself (and industry partners) from greater financial scrutiny -- and its perfectly legal.

The organization is known (un)officially as JDRF Therapeutic Ventures, LLC.

That's about all you'll hear since LLC's are not required to disclose much else to the public.  As long as its not one of JDRF's biggest recipients of funding, it also stays out of the organization's 990s, even if JDRF is putting millions into this entity.  Pretty neat, huh?  Well, maybe not if you'd like to know what the organization is doing with the money you raise for them.  But you should know how the trusted nonprofits are getting around legal disclosure requirements, just in case.

As I said, I have no reason to believe that anything unethical is being done here (and I don't), and there are very legitimate reasons for creating such a legal entity, including to work with industry partners who often demand incredible privacy.  But the fact that the organization did this, and then kept it so quiet, does raise questions in my opinion.

I've also witnessed how other organizations, some which have been designated as hate groups, have done remarkably similar things to try and hide what they're doing from public scrutiny, and it often works, until they are taken to court and some of the results then become part of the public record.  Incidentally, this was also the way we also recently learned that tech giant Google, I mean Alphabet, does something quite similiar with its market-leading Android operating system, and its all perfectly legal.  For example, we recently learned that Alpahabet's Android operating system has generated revenue of $31 billion and $22 billion in profit, a lawyer for Oracle said in court while disclosing figures Alphabet/Google says shouldn't have been made public.  Alaphabet has no legal obligation to reveal such data to investors, and JDRF can keep a lid on what it does with JDRF Therapeutic Ventures, LLC a secret, too -- its perfectly legal.  It claims that its a separate entity for liability purposes; initially staffed by Steven Griffen, MD, JDRF VP, Translational Development & Jit Patel, JDRF VP, Research Business Development; facilities, although administration and finance contracted from JDRF.  Increasingly, we are seeing the use of separate legal subsidaries to effectively hide data from investors and the public.  Now, JDRF shows they're doing the same in the nonprofit world.  But that doesn't mean we as fundraisers do not deserve more transparency from an organization that people with Type 1 diabetes (and their caregivers, in the case of parents of children with T1D) have been bankrolling.  Really, we should be asking our lawmakers in Congress to address this with disclosure laws, but I don't expect that to happen anytime soon because they're kind of in on keeping things a secret, too.

Below is a presentation of JDRF Therapeutic Ventures (unless the organization tries to have it banned from public scrutiny by contacting the host I'm using, but they should realize that I can and likely will just keep moving it, so I recommend that JDRF doesn't try making complaints to Scribd, SlideShare or any of its growing number of competitors, in which case I might have to distribute the presentation another way, so just beware!) that I managed to get my hands on and I won't tell you how I did that, but let's just say I did, and JDRF hasn't exactly kept this presentation completely secret - it just hasn't put it on the non-profit's website or given it to its fundraisers.  Look at page #7 (or see it at, if JDRF puts up a stink, I may have to move it):

It gives some details about the legal structure, although not very many.  But as a JDRF fundraiser for the organization for the last 40 years, I make no apologies for making this public.  The organization should have been more transparent about it, after all, I've been bankrolling them for decades.  As I said, there are very legitimate reasons to want to do this.  But we can see that the JDRF and its various legal entities has spent vastly more on the so-called "artificial pancreas" than it has glucose-responsive insulin (so-called smart insulin), so its little wonder that's much further ahead in development.  Just don't give us the line that smart insulin is so much harder to develop than an AP system.  If JDRF was serious about it, it would put its money where its mouth is, or in the case of JDRF Therapeutic Ventures, LLC; ISN'T.

Something for the broader diabetes community and JDRF fundraisers to think about, no?

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