Ann Arbor, Mich. -- A Michigan-based foundation said it's going out of business, a victim of the multibillion-dollar fraud case filed against a New York investment adviser.

The Fair Food Foundation of Ann Arbor said it will close its operation over the next few weeks. The foundation's mission was to make grants to improve the availability of fresh food in urban areas.

On its Web site, the foundation said it relied on donors whose money was managed by Bernard Madoff, who is accused of fraud. The donors were not named.

"The loss of the Fair Food Foundation and the potential financial support it would have provided is a stinging blow to the community of activists, advocates, organizers, and funders dedicated to redesigning our broken food system," president Oran Hesterman wrote on the Web site.

"I am heartened by the strong support that has rallied around the vision of a food system that creates health for our children, our communities and our environment," he said.

Phone messages and email seeking comment were left Thursday with Hesterman, a former farmer and former professor at Michigan State University who worked on food-system projects during his 12 years at the Kellogg Foundation.

A New York law firm, Schulte Roth & Zabel, said it created the foundation in 2007 on behalf of a "very charitable-minded client" to help people who live in "food deserts," where healthy food is hard to find or too expensive.

Jennifer Fike, director of the Food System Economic Partnership, said the demise of Fair Food is "devastating." Her Ypsilanti-based group works to get food produced in southeastern Michigan into local schools, among other projects.

"They were going to be putting some real dollars in to change the food system in the city of Detroit," Fike said.

Oakland, Calif., was another area, she said.

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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