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GIFTS

Trust and Chance Lead to
$100 Million Gift for Penn Medicine

In March 2001, Bernard Korman W’52 L’55 happened to be sitting next to Penn President Judith Rodin CW’66 at a Penn alumni brunch in Florida. As they talked, they discovered that they shared, in his words, a “mutuality of interests.”

“My area of interest was health care,” recalled Korman, chairman of the Philadelphia Health Care Trust (PHCT), a charitable foundation. “She was talking about the options the University was contemplating for the Health System, including a possible sale of the hospital’s assets. I suggested that a sale might not be necessary, and that the Philadelphia Health Care Trust could be instrumental in helping create a better alternative. About a week later, she called me and said, ‘I’d like to talk a little more about that.’”

One year later, they stood at a podium in the Clinical Research Building to announce that the PHCT would transfer all of its assets—worth an estimated $100 million—to support the education, research, and patient-care programs of Penn Medicine. For a seven-year period, the income generated by the $100 million will be distributed partly to support Penn Medicine programs and partly to support “existing and future PHCT charitable undertakings.” At the end of that time, the assets themselves will be transferred to the University. (In April, two community organizations asked Philadelphia’s Court of Common Pleas to block the transfer, saying that the assets should be used to benefit low-income patients.)

That “very generous gift,” said Rodin, “represents a significant endorsement of the Penn Medicine governance structure to effectively integrate the three-part mission of our academic medical center”—patient-care, research, and teaching. Penn Medicine was established last November as the single governing body of the Health System, including the School of Medicine. The school will name a chair after the PCHT to honor Korman, who will join Penn Medicine’s board of trustees as vice chairman.

According to Korman, the PHCT “recognizes Penn Medicine to be a superbly crafted and effective governance structure, and believes that our total commitment to support Penn Medicine is the most productive use for the entirety of the assets with which we have been entrusted.”

Dr. Arthur Rubenstein, Penn’s executive vice president for the Health System and dean of the medical school, called the gift “extraordinary” and a “vote of confidence in the School of Medicine.” Alluding to the Health System’s massive operating losses of nearly $300 million during fiscal 1998 and 1999, Rubenstein said that “a few years ago people would have hesitated” to make a large donation. Noting that the Health System returned to profitability last year, Rubenstein said: “The turnaround of the Health System really set the stage for Mr. Korman and his board to feel comfortable about being donors.”

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Copyright 2002 The Pennsylvania Gazette Last modified 4/28/02