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Research Institute Sets $100 Million Fundraising Target for Next Spring

Posted on: Saturday, 3 June 2006, 18:00 CDT

By Terri Somers, The San Diego Union-Tribune

Jun. 3--Having survived 18 months on $22 million in donations and loans, California's groundbreaking stem cell institute now aims to raise $100 million from philanthropists by next spring.

That would be enough to make another round of grants and cover overhead well into 2007 while the institute continues to fight legal changes that have frozen state funding, institute chairman Robert Klein said yesterday in La Jolla.

Within the next 35 days, the state should take receipts of $36 million in philanthropic loans for the stem cell program, Klein told local biotechnology executives at a breakfast before a meeting of the institute's board. That would take the stem cell initiative to the $50 million goal Klein set out to raise several months ago.

The fundraising is necessary because lawsuits that challenge the institute's constitutionality have prevented the state from selling bonds to fund the $3 billion taxpayer-supported initiative that voters approved in November 2004.

Klein said that raising $50 million will show those opposed to California's $3 billion stem cell initiative that they can't shut down the effort by taking it to court.

But Klein doesn't want to stop there, planning to raise another $50 million from philanthropists by the end of next spring.

"Then the opposition will know that they cannot try the same tactic (a legal challenge) every time another public mandate is passed to promote science or medicine," he said.

The biotechnology executives applauded Klein's commitment.

But taxpayer advocates said there's a limit to philanthropists' generosity.

"You can only get so much juice from that fruit," said Jesse Reynolds, of the Oakland-based Center for Genetics and Society.

The institute would never be capable of earning enough in philanthropic donations to negate the need of a taxpayer initiative, Reynolds said.

Under the stem cell initiative known as Proposition 71, the state would sell $3 billion in bonds and commit up to $350 million annually to fund stem cell research in California.

The loans Klein has been soliciting are made by philanthropists who are buying bond anticipation notes, which will be repaid by the institute once the legal challenges are resolved and the state can issue bonds to fund the institute.

If the state loses the legal challenges and the state cannot sell the bonds as planned, the investment philanthropists made in the bond anticipation notes becomes a donation. A Superior Court judge recently ruled in the institute's favor, but appeals are expected to drag through 2007.

San Diegans have already contributed to the stem cell institute in a big way.

The Jacobs Family Trust, founded by Qualcomm Chairman Irwin Jacobs and his wife, Joan, bought $5 million of the $14 million in bond anticipation notes already sold and approved by the state treasurer.

The Moores Foundation, founded by San Diego Padres owner John Moores, bought $2 million. And Qualcomm President Steven Altman bought $1 million worth.

With the $14 million in bond anticipation note money already received, added to a $5 million donation from the Dolby Foundation, a $3 million state loan and a recent $350,000 donation from the Goldman Foundation, the institute has survived and made its first round of grants.

The $12.1 million in grant money was distributed to 16 institutions around California, including four on the Torrey Pines Mesa, for training scientists in stem cell research.

The next $36 million the institute plans to receive should fund another round of grants, Klein said.

It will also allow the institute to hire additional science personnel, meet its obligation for the second year of funding the training grants, pay off its legal bills and stay alive past Dec. 31, institute chief administration officer Walter Barnes said.

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Copyright (c) 2006, The San Diego Union-Tribune

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Source: The San Diego Union-Tribune

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