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On a rainy, spring day a few weeks ago, representatives of the Guggenheim Museum arrived at Donald and Barbara Jonas’s Fifth Avenue apartment. They came bearing a Pablo Picasso painting. The couple had lent a Jackson Pollock for the current exhibition of his works on paper, and the Picasso was meant to fill the spot on their wall.

The loan indicates the Jonases’ high standing as art collectors. A bigger clue to their standing was last spring’s sale at Christie’s of 15 abstract expressionist paintings that had been hanging in their home. The group – including works by Willem de Kooning, Arshile Gorky and Mark Rothko – set five auction records and brought $44.2m that they promptly started giving away.

“We decided a year-and-a-half ago that the art we’d been collecting over 30 years had gone up so much in value that we could do something in philanthropy with it,” says Donald Jonas. “So we sold half of it and gave it to the Jewish Communal Fund.”

The proceeds, which were free of capital gains tax and are being administered by a donor-advised fund, fund the Jonas Center for Nursing Excellence.

This is the first of three initiatives the Jonas family – their wealth derived from Lechters, a household goods company he nurtured into an ubiquitous chain in New York – plan to make. The other two will focus on mental health and disadvantaged children.

While the art sale was structured to maximise after-tax proceeds, the family’s approach to giving away the money illustrates a broader trend. Donors to health and medical charities increasingly prefer to fund initiatives they can see to the end. Fading are the days of big gifts to a hospital’s general fund that might result in a room, wing, perhaps a building named after the donor.

“Donors have become very sophisticated,” says Patrick Mulvey, vice-president for development and the University of Texas’s M.D. Anderson Cancer Center. “Years ago trends were to trust in an institution and say spend it where you think it’s most important. Today they want to see where their dollar is used.”

“I wanted something we wouldn’t get lost in,” says Mr Jonas. “I always felt nurses and public school teachers were the most under-served professions. Nurses had no real substantial backing.”

A study funded by the Robert Wood Johnson Foundation forecasted that by 2020 the US will face a shortage of almost 1m nurses – precisely when the baby boom generation will face its greatest need for care. New York City has the most acute crisis, with the lowest nurse-to-patient ratio of any big US city.

The foundation’s report also showed the shortage was most acute among minorities, who were substantially under-represented as nurses. For example, only 4 per cent of nurses are Hispanic, even though Hispanics form 27 per cent of the city’s population.

Before the proceeds from the Christie’s sale were all in, the Jonases hired a nurse to oversee the centre. Marilyn DeLuca, an RN with a doctorate in public administration, decided to fund initiatives that were partnerships between academic and non-academic institutions – an approach the Jonases liked.

“We wanted to force a collaborative model to get agencies and hospitals together,” says Barbara Jonas. “Most funders of nursing don’t fund the nursing shortage: they fund the practices. There’s been a loss of vision.”

Last month the Jonas Center made 11 grants worth $3m; most of them, worth $140,000 to $400,000, will be paid during three years. A grant to Pace University’s nursing school in conjunction with Mount Sinai Medical Center seeks improved care for mentally ill patients while also training more minority nurses to do the job. DeLuca hopes that will lead to more “clinically competent and culturally sensitive” nurses.

Another grant goes to foster an innovative combination of nursing and dentistry. The proposal, put together by New York University’s schools of nursing and dentistry, will offer medical check-ups to the 200 or so geriatric patients who walk into NYU’s free dental clinic every day. “This addresses the issue of access,” says Mrs Jonas. “They’re captive, so these nurses will ask them about their healthcare issues.”

The Jonases hope other foundations will join them. They want others to recognise the process they use to vet applicants, and to gain respect for thoroughness. That would put an imprimatur on their grant recipients and make other funders want, in theory, to support them.

“We want to leverage with larger foundations and family foundations to bring in private funds where public funds don’t exist,” says DeLuca. “We’re creating a list of things we couldn’t fund [because of size] that we’d like to. Number one is nurses in public schools.”

They may not have a hospital named after them but Donald Jonas gets plenty of emotional satisfaction from his grants. “The punch line in the whole deal is we were taught by some very smart people that it’s better to give while you’re living,” he says, chuckling. “That way we get the credit and not the lawyers.”

The flipside to the Jonas family’s model is what Pitt Hyde has undertaken. The Jonases hope other foundations will join them but Hyde was hoping companies would join him. So far, he has turned a seed grant into a vast public-private medical partnership in his hometown of Memphis, Tennessee.

Hyde, who made his money by starting the AutoZone chain of car parts stores, chairs the Memphis Bioworks Foundation – a mightily ambitious 10-year, $500m initiative to turn the city into a bioscience hub. He gave the first $4m to the project and raised another $8m in private money. Crucially, he negotiated the donation of the building site from Baptist Memorial Health Care. A former hospital was demolished to make way for the 6.5-acre campus.

The idea is to build on institutions Memphis has already; the best-known of which are medical devices maker Smith & Nephew and world-famous centre of paediatrics at St Jude’s Hospital. Memphis, home city of FedEx and located at almost the central point of continental US, also has the advantage of the latest pick-up time in the world: 12pm.

“This creates a great urban-renewal opportunity,” says Hyde. “It touches all levels of the community.”

With the research park at the centre, the Memphis Bioworks Foundation’s plans include building low-income houses in the area and a charter school, the Memphis Academy of Science and Engineering that is hoped will educate nearly 1000 students. All intend to rehabilitate a blighted downtown area and keep companies from moving operations.

Most of the money – some $450m – is from private enterprise. Hyde is part of this via GTx, a company he founded with the doctor who operated on him for prostate cancer. Its main product is Acapodene, a drug being tested for prevention of prostate cancer in high-risk men. He expects the company to create 150 jobs and $100m in local investments as well as to generate $5m in royalty revenues for the University of Tennessee.

Among medical companies expanding to Memphis are Medtronic Sofamor Danek, Johnson & Johnson, Baxter, Pfizer and Medline Industries. To meet the foundation’s goal of 1,000 jobs, more bioscience companies will need to move to Memphis.

“Years ago we came to the realisation that we have a nice pot of resources and we realised we’d have a much bigger impact if we could leverage public resources,” Hyde says. “This is playing to your strengths. It’s not shooting with a shotgun.”

Copyright The Financial Times Limited 2019. All rights reserved.

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