Entrepreneur diggs deep into his own pockets …
Neurosurgeon and entrepreneur James Doty, MD, was feeling generous when he agreed in 2000 to give a multimillion-dollar gift of stock to Stanford University School of Medicine, but he didn’t realize at the time that he would end up giving away his entire personal fortune.
Doty, who had planned to retire on his stock earnings and share his time between San Francisco, his Italian villa and his private island in New Zealand, instead wound up with virtually nothing as a result of his philanthropic commitments.
“I’m happy to give it. I’m thankful. It’s actually been a wonderful experience and has made me a better person,” said Doty, 51, who served on Stanford’s adjunct faculty for four years between 1997 and 2004.
As of Sept. 17, the school had sold all of Doty’s donated stock—398,400 shares of Accuray Inc., a Sunnyvale, Calif.-based medical device maker. The sale brought in nearly $5.4 million and amounts to one of the largest to the university to date from a current or previous faculty member. The funds will support an endowed chair in the Department of Neurosurgery and other related programs such as research on spinal cord injury and repair, including stem cell therapy. The funds also will support a collaborative project with the Dalai Lama on the neurological basis of human compassion and altruism.
“Jim is a truly remarkable individual,” said Philip Pizzo, MD, dean of the medical school. “A highly successful physician-innovator and committed academic leader, he is also an incredibly honorable individual with admirable integrity. He has continued to commit his support even though his own personal wealth has unfortunately declined. We stand in awe.”
The remarkable story of Doty’s gift began in early 2000, by which time he had accumulated about $75 million in paper profits from investments in medical technology companies, including Accuray, where he had served as chief executive officer from 1997 to 1999. He was doing some estate planning and had decided to put a substantial amount of stock into a charitable remainder trust in which the Department of Neurosurgery at the medical school was one of the beneficiaries.
But then the dot-com meltdown occurred, and the value of Doty’s holdings plummeted. All of his hopes for early retirement were dashed. He had already made a down payment on a $5 million San Francisco apartment with a view of the bay, and was in the process of buying a 6,500-acre island in New Zealand and a villa in Tuscany. He had planned to divide his time between the three homes, while also volunteering a significant part of his time as a neurosurgeon in Third World countries, he said. All those plans evaporated overnight, along with Doty’s personal fortune.
“In six weeks, I not only had lost the paper profits but was $3 million in debt,” he said. While he did not complete the purchase of the island, the villa or the new San Francisco apartment, he was able to keep an existing home in San Francisco for himself and his family.
At this point, Doty had not yet put the committed stock into the trust, and some advisors told him there was a fine legal line that could allow him to back out. A few told him he was a “complete fool” to give away his remaining assets, but he said, “I felt an obligation to do what I said, and I went ahead and did it.”