Remember back in 2021 when the New York Times (see the article at https://www.nytimes.com/2021/07/02/your-money/philanthropy-type-1-diabetes-research-fund.html although observe that article it is behind a paywall) covered what was, at the time, an innovative approach to Type 1 diabetes research and development? The NYT article, "Quest to Help Diabetic Son Endures With a Different Kind of Giving," was about Sean Doherty's involvement in helping to create a venture philanthropy fund known as the T1D Fund.
The article described Mr. Doherty, then a private-equity executive at Bain Capital, whose son Finn had been diagnosed with Type 1 diabetes (T1D) as a child. The T1D Fund was described as part of an emerging "venture philanthropy" model. The idea was that very wealthy parents and other donors would create a venture philanthropy fund designed to take selected risks that more conventional investors might otherwise avoid, providing financial incentives for companies to develop new and innovative therapies for T1D.
The T1D Fund was not simply another charitable organization making grants. Donors provided capital that was invested in commercial companies, hopefully generating a financial return in addition to advancing therapies intended to cure T1D.
The T1D Fund originally used the name JDRF (subsequently renamed Breakthrough T1D) but then dropped it to designate a separation, suggesting there was some type of relationship with the T1D nonprofit, although the precise relationship was really known only to JDRF's Board of Directors.
We do know that the T1D Fund generated fairly substantial investment returns. According to the Fund's own disclosures, it had realized nearly $100 million in profits from portfolio returns, with those returns being reinvested into future investments.
But the most interesting part of this story is what the T1D Fund said about itself in 2021 compared with what it says about itself today.
In 2021, the T1D Fund's "About" page said the following:
"In 2015, a group of JDRF volunteers observed that there was virtually no private investment in T1D which was causing a gap between scientific advancements and the delivery of solutions to the people who need them.
Our bold solution was to launch the JDRF T1D Fund—a venture philanthropy fund to create a market in T1D by using our capital and expertise to convince venture capital, biotech and pharma to make the investments needed to cure T1D.
Operating as a separate company, we make compelling investments that stimulate private capital financing, whilst remaining efficient and nimble."
That description is important because it explains exactly why the T1D Fund was originally created.
The T1D Fund was explicitly a response to a perceived lack of private investment in T1D. Its purpose was to "create a market in T1D" by using philanthropic capital and expertise to convince venture capital, biotech and pharmaceutical companies to invest.
And importantly, it was described at the time as operating "as a separate company."
Now compare that with the description currently appearing on the T1D Fund's website in August 2026:
"Launched in 2016 as a wholly owned subsidiary of Breakthrough T1D, the T1D Fund is the first scaled venture fund established to catalyze the development of T1D cure-oriented therapies through investments. The Fund co-invests with venture capital firms and biopharma companies in support of early-stage companies pursuing disease-modifying therapies and potential cures for T1D. A core element of its mission is to rapidly advance promising therapies through development and ultimately regulatory approval. Led by a deeply experienced team of healthcare and investment professionals, working in partnership with an independent Investment Committee, the Fund leverages its vast research, clinical, regulatory, and medical affairs network on behalf of its portfolio companies. Funded through charitable contributions from donors and from Breakthrough T1D itself, the Fund makes investments in biotech companies and reinvests returns into new investments, thereby extending the impact of its donors’ contributions."
There are several significant changes here.
First, the original explanation of the market failure has disappeared. In 2021, the T1D Fund explicitly said that there was "virtually no private investment in T1D" and that its solution was to "create a market in T1D."
In 2026, the T1D Fund instead describes itself as "an established venture fund whose purpose is to catalyze development of therapies and advance them through development and ultimately regulatory approval".
Second, the T1D Fund's relationship with Breakthrough T1D is now explicitly described as that of a "wholly owned subsidiary." That is materially different from the 2021 description of the Fund "operating as a separate company."
I would not interpret those words alone to mean that the T1D Fund ceased to be a separate legal entity. A subsidiary can itself be a separate legal entity. But the change from "separate company" to "wholly owned subsidiary" clearly describes a different corporate relationship between the T1D Fund and Breakthrough T1D.
That also raises a very obvious question: when and how did that relationship change?
Third, the 2026 description places much greater emphasis on the T1D Fund's institutional investment infrastructure, including its professional investment team, an independent Investment Committee, and access to Breakthrough T1D's research, clinical, regulatory and medical-affairs network.
And fourth, the 2026 description explicitly says that Breakthrough T1D itself provides charitable funding to the T1D Fund and that investment returns are reinvested into new investments.
So, something clearly changed between 2021 and 2026. The question is what?
Breakthrough T1D has provided an explanation, although in my view, it leaves some critical details unanswered.
Breakthrough T1D published a formal statement (see https://www.breakthrought1d.org/for-the-media/statements/statement-regarding-t1d-fund-governance/ for its statement regarding T1D Fund governance on June 25, 2026.
The statement says:
"On May 8, Breakthrough T1D’s International Board of Directors acted within its fiduciary responsibilities and authority under the LLC agreement governing the T1D Fund to change the composition of the board and update the LLC agreement."
It goes on to say:
"These changes were made to support the Fund’s mission and to ensure donor contributions and profits remain dedicated to their intended purpose. As the Fund’s sole member and parent organization, Breakthrough T1D has always held legal responsibility for ensuring appropriate governance, protecting donor resources, and keeping the Fund’s work aligned with its charitable mission."
Breakthrough T1D also says that the T1D Fund remains an integral part of its strategy, that the Fund continues to operate under the same mission, investment strategy and venture philanthropy model established at its founding, and that the recent governance changes "do not alter the Fund’s mission, investment strategy, or operating model."
That is Breakthrough T1D's position, and it is important to acknowledge it.
But there is an obvious tension between saying that nothing fundamental changed and the fact that Breakthrough T1D's International Board changed the composition of the T1D Fund's Board and simultaneously updated the LLC agreement. And, as Dan Heller's Substack article observed, it fired the T1D Board members via email, it did not do so in person. How brave.
The statement tells us that Breakthrough T1D had the legal authority to do this. It does not tell us much about why it chose to exercise that authority in the manner it did.
We know that on May 8, 2026, the T1D Fund Board was changed and its governing LLC agreement was updated.
We also know that the T1D Fund's public description now characterizes it as a wholly owned subsidiary of Breakthrough T1D.
And we know that at least some of the people who had been deeply involved in the T1D Fund objected to what happened and the manner in which it happened.
Joanne Milo covered the T1D Fund board controversy at https://thesavvydiabetic.com/savvy-updates-8-10-26/ while she drew primarily from Dan Heller's Substack coverage accessible at https://danheller.substack.com/p/breakthrought1d-scraped-an-iceberg/. Both are worth a read. Another I would recommend is the Juvenile Diabetes Cure Alliance (JDCA) coverage found at https://www.thejdca.org/publications/report-library/archived-reports/2026-reports/t1d-fund-rift-expands.html. Ordinarily, I'm not really a big fan of JDCA, Fundamentally, I disagree with JDCA's definition of a "cure" hence I do not routinely see eye-to-eye with JDCA's perspectives on many issues. But in this particular case, its analysis seems fairly objective.
However, JDCA asserts that Breakthrough T1D had always held ultimate ownership and control of the T1D Fund even though we are left to believe that is true without evidence. Breakthrough T1D accused a subset of the T1D Fund's prior leadership of attempting to widen the gap between the entities, spin-off the T1D Fund as an independent 501(c)(3), and reduce parent oversight from Breakthrough T1D, and if true, that would indeed be a valid reason for Breakthrough T1D's coup. But there are too many details omitted from all parties involved, which is the main problem from my viewpoint.
Dan Heller reported that the T1D Fund's page stated that it had "realized nearly $100 million in profits from portfolio returns" since inception and that "every dollar has been reinvested to support future investments in promising T1D therapies and cures."
He also documented the departure of David Panzirer, a trustee of The Leona M. and Harry B. Helmsley Charitable Trust and one of the T1D Fund's original founders.
On June 18, 2026, David Panzirer resigned from the T1D Fund. According to an open letter that Heller reported having seen, Panzirer stated:
"What Breakthrough did by firing the Fund Board with zero notice or transparency has alienated the 4 largest families in T1D all within 48 hours. Each family has committed well over $100MM to the cause. NOTHING will happen if we don't all stand up and demand transparency."
That is an extraordinary statement from someone who was not simply a donor, but one of the people who helped create the T1D Fund.
And it raises another question:
What exactly happened to the T1D Fund's original governance structure?
Breakthrough T1D says that it acted within its authority under the LLC agreement. Former T1D Fund leaders have offered a very different account, describing the action as a unilateral dismantling of the T1D Fund's independence and a breach of trust. Both can be true at the same time. Breakthrough T1D never disclosed those details, so we really do not know with any certainty. There is therefore a genuine dispute over what happened and why. We do know:
The T1D Fund's Board was changed.
The LLC agreement was changed.
Some longtime T1D Fund leaders were removed or subsequently resigned.
And major donors apparently learned about the changes only after they had occurred—by email!
The precise details of the revised LLC agreement are particularly important. If the T1D Fund's governance structure changed materially, then it would be useful for donors and other stakeholders to understand exactly what provisions were changed and what those changes mean for the T1D Fund's independence, investment decisions and financial resources.
That is where the current public explanation leaves me unsatisfied.
Breakthrough T1D says that donor contributions and investment profits remain dedicated to the T1D Fund's charitable purpose. It says that every dollar of the nearly $100 million in profits realized since inception has been reinvested. It says the T1D Fund continues to have its own Investment Committee and that its mission, investment strategy and operating model have not changed.
Those statements are somewhat reassuring.
But they do not answer every question raised by the abrupt change in governance. The outstanding questions in my mind are as follows:
- Why was the T1D Fund's Board changed so abruptly? And why did they notify the terminated T1D Fund members (via email, rather than in person)?
- Why was the LLC agreement changed at the same time?
- What specific provisions of the LLC agreement were changed?
- Why were some of the Fund's largest donors apparently informed only after the changes had occurred?
- Why did one of the T1D Fund's original founders (including a father of two grown children with T1D himself) subsequently resign?
- And what exactly does Breakthrough T1D intend to do with the substantial capital and investment returns that have accumulated inside the T1D Fund?
Those are not unreasonable questions for donors, major fundraisers and members of the T1D community to ask.
This may have little immediate impact on people who participate in Breakthrough T1D's annual Walks to Cure Diabetes fundraising events. But it could have a more significant impact on major-donor confidence.
The T1D Fund was built on a different proposition from traditional charity. Its founders were not simply asking donors to give money. They were asking them to provide capital for an investment vehicle that could generate additional capital and thereby expand the amount of money available for T1D research and development.
That model depends heavily on trust.
If major donors believe that the governance structure of the Fund can be changed without transparency or meaningful consultation, that trust could be damaged.
And that may ultimately be the most important issue surrounding what I would call the T1D Fund Board coup d'état.
Not whether Breakthrough T1D had the legal authority to make the changes. Breakthrough says it did.
The bigger questions are why it chose to make the changes, what actually changed in the Fund's underlying governance and relationship with Breakthrough T1D, and why the people who provided much of the capital apparently learned about those changes after they had already occurred.
Breakthrough T1D has explained its legal authority.
What it has not fully explained, at least to my satisfaction, is the underlying reasoning, process and precise substance behind the reorganization.
And that leaves one final question:
Why the sudden reorganization, and is Breakthrough T1D risking major donor support with such a move?
Breakthrough T1D's Board has become increasingly secretive in recent years (for example, in 2016, I documented about something I learned of which was referred to then as JDRF Therapeutic Ventures LLC, catch my coverage at https://blog.sstrumello.com/2016/01/just-who-is-jdrf-therapeutic-ventures.html for more on the still-unanswered questions I raised at that time), and that gives me pause to continued, unquestioned support without more transparency.
While some individuals, including Diabetic Investor David Kliff whose views I generally respect, has called for the resignation of Breakthrough T1D's CEO Aaron Kowalski (as well as ADA's President over the recent decision to call security over a researcher who was sharing an opinion piece which had been published in an actual ADA journal). He posted those views in items shared via LinkedIn. The links to each are listed below.
- https://www.linkedin.com/posts/david-kliff-78b669b_diabetic-investor-post-activity-7473019027196379136-3jqs
- https://www.linkedin.com/posts/david-kliff-78b669b_enough-is-enough-activity-7483940736086847489-Eysy
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