Entrepreneur to Donate $100 Million to USC
Biomedical entrepreneur Alfred E. Mann sealed an agreement Wednesday to donate $100 million to USC to establish an institute to turn raw scientific discoveries into useful products--and is poised to give another $100 million for a similar institute at UCLA.
The USC gift alone will make the 72-year-old Mann--the son of an immigrant grocer--one of the top 10 donors ever to higher education in the United States.
“Most of the Nobel Prizes go to scientists in this country, yet all of the products are coming out of Japan and Germany,” he said in explaining the purpose of the Alfred E. Mann Institute for Biomedical Engineering. “I want to create a bridge between academia and the industry.”
An official at UCLA, where Mann did his undergraduate and graduate work, said that school hopes to complete its deal with the entrepreneur “in the near future.”
But the fact that he will cut the first check to UCLA’s cross-town rival clearly is a coup for USC.
Mann had intended to open his UCLA institute first until USC President Steven B. Sample learned of the negotiations last spring--through a passing mention in The Times--and personally began lobbying him to expand his philanthropy.
“He pointed out that they”--officials at USC--”are more entrepreneurial than a public institution that is overwhelmed with bureaucracy and politics,” Mann said. “He’s a very clever guy.”
Academic and industry experts say the institute probably will foster even more biomedical activity in Los Angeles and Southern California, which has already become a leading region for start-up companies in the field, such as those clustered around La Jolla’s Biotech Beach.
Mann said that after providing for his six children (“I don’t believe in creating poor little rich kids”), he decided to use his fortune to “create some real value for society.”
“What else am I going to do with it?”
Mann, trained as a physicist, amassed his wealth in various high-tech ventures. His companies have provided the U.S. Army with guidance equipment for antitank missiles and solar cells to power America’s first space probe.
He entered biomedical fields in recent decades, making hundreds of millions of dollars by producing pacemakers for heart patients and insulin pumps to help treat diabetics. His own private, nonprofit think tank--the Alfred E. Mann Foundation--is now working on a “prosthetic pancreas” that he says “will allow diabetics to lead normal lives,” free from insulin shots.
This is not the first time that Mann has forged an alliance with a university. He has entered into a tentative agreement to relocate the private foundation and two of his companies, Mini-Med and Advanced Bionics--from Sylmar to the north campus of Cal State Northridge. In addition to creating a biotechnical office park there, Mann will build a $4-million conference center that will be controlled and managed by Cal State Northridge.
Under the agreement signed Wednesday with USC, Mann promised to give the school about $8 million this year, then transfer the remaining money for a $100-million endowment as he slowly sells his interests in half a dozen companies.
In addition, Mann said, he will dig into his “own pocket” for another $1.5 million this year--and up to $5 million in following years--to kick-start the USC institute, which eventually is expected to employ 100 or more engineers, PhD scientists and technicians.
The institutes also could help USC--and eventually UCLA--tap a source of money sought by many cash-hungry universities these days: royalties from patents.
Stanford is one role model at this, having collected $11 million annually from a patent on gene-splicing technology, until it expired in December.
At the Mann institute at USC, university officials will receive 30% of royalties from any product that makes it to market--after initial costs to secure the patent and a cut for the inventor. The institute will keep 45% of these royalties to further its work and 25% will revert to the Alfred E. Mann Foundation--the entity underwriting the institute.
Sample said he will place the Mann institute in temporary quarters somewhere on campus until the university raises $20 million to $25 million to erect a four-story building near a cluster of other engineering facilities.
As envisioned, the institute will occupy the upper two floors of the 70,000-square-foot structure, and the bottom two will be the new home of USC’s biomedical engineering department. Sample hopes to break ground in 2001.
Mann’s $100-million gift is the second largest ever to USC, behind $120 million donated in 1993 by Walter H. Annenberg to launch USC’s Annenberg Center for Communication.
If Mann follows through with his plans at UCLA, that $100 million would be the largest gift ever received by the Westwood campus. And the combined donations would propel Mann into the ranks of the top five donors to American universities, according to the Chronicle of Higher Education, which tracks such philanthropy.
But there also could be a practical benefit for Mann--if his own companies someday license innovations perfected in the research institutes he is bankrolling at USC and UCLA.
Sample said Mann’s companies, however, have “no right of first refusal or most-favored nation status” to manufacture inventions springing from the institute at USC. It will be governed by an independent board of directors named by 10 corporate members, five appointed by Mann and five by the university.
Mann said he first approached UCLA with the idea of such an institute eight years ago, but the notion quickly got bogged down in “university politics.” He did not elaborate, but UCLA officials acknowledged that there were worries about the direction of research, division of royalties and which program--engineering or medicine--would best house such an institute.
Mann renewed his overtures to UCLA last year, and negotiations were briefly mentioned in a column in The Times, which caught the attention of USC officials. They flagged it for Sample.
In May, Sample invited Mann to lunch--and the two clicked. Sample, an electrical engineer, is an inventor himself, holding patents on the digital controls used on microwave ovens and many other household appliances.
Sample promoted USC as a perfect match for such an institute because it has a long-standing biomedical engineering department--founded in 1971--while UCLA is just launching one. Sample also arranged for Mann to join USC’s Board of Trustees--an appointment just announced Wednesday.
“Private universities can sometimes move more quickly and more nimbly than public ones,” Sample said immediately after signing the agreement and presenting it to the trustees. “It was a matter of expanding his vision, not taking away anything from a sister institution.”
Although USC’s coup has frustrated officials at its Westwood rival, UCLA Vice Chancellor Ted Mitchell greeted Wednesday’s announcement graciously.
“No sour grapes,” said Mitchell, who oversees fund-raising. If anything, he said, Mann’s “engagement with USC has helped us move along in our negotiations. . . . UCLA anticipates to make a similar announcement with Mr. Mann in the near future.”
Mann said he will not be deterred from his plan to share his largess with his alma mater. Still, he said, he was surprised at the difficulty of negotiating the terms of such a large contribution with universities, which are leery of donors dictating conditions that infringe on academic freedom.
Mann said he hopes that the agreement with USC can be a template for the institute at UCLA, with only “a few changes.” He also hopes the boards of each institute will include a member from the other.
“The cross-town rivalry should stay on the football field,” he said. “There will be more benefit to Los Angeles and Southern California by having two institutes at two fine universities. I think we’ll see some cross-fertilization.”
“I didn’t know it would be so much work giving money away,” Mann added.
Times staff writer Nancy Hill-Holtzman contributed to this story.
* GENEROUS TRIO: Alfred Mann joins Bill Gates, Ted Turner as big givers. D1
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