printable versionFormer faculty entrepreneur sticks to his promise
BY RUTHANN RICHTER
James Doty, former adjunct faculty member and entrepreneur, resolved to keep his commitment to donate to Stanford even when his personal fortune declined.
Neurosurgeon and entrepreneur James Doty, MD, was feeling generous when he agreed in 2000 to give a multimillion-dollar gift of stock to the 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 did some estate planning and decided to put a substantial amount of stock into a charitable remainder trust in which the neurosurgery department 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 a fine legal line 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."
Doty said he chose Stanford's medical school as one of the beneficiaries of the trust because it was the place where Accuray was born. The company was founded by John Adler, MD, a professor of neurosurgery and longtime friend and colleague of Doty's. Adler invented the CyberKnife, a robotic radiosurgery system used for treating tumors. In 1990, Adler started Accuray to manufacture and market the device.
The company progressed until the late 1990s, when it nearly collapsed because of financial difficulties. Doty, who has started several medical technology companies, was an early investor in Accuray and was instrumental in creating the first CyberKnife facility outside of Stanford. He agreed to help raise funds and restructure the company, using his own money and ultimately agreeing to guarantee a loan to Accuray from a Taiwanese investment group.
"He put up the money when all of Silicon Valley would not. The company would not have survived without his help," said Adler.
By 2000, Doty's investments in several companies were worth about $75 million on paper. Riding high, he drew up the paperwork to commit a gift of 398,400 shares of Accuray stock to Stanford, plus more to other charities. Those commitments eventually were worth $25 million. Then the dot-com bust wiped out most of Doty's paper wealth.
By February 2007, Accuray had gone public, with an initial offering at $18 a share and a total value of more than $1 billion. At that point, Doty's Accuray stock was worth many millions.
Doty never benefited from the company's success because those shares were committed to philanthropy.
He had already left Silicon Valley for Mississippi, where he now lives. He directs a neuroscience program at Memorial Hospital in Gulfport, which was hit hard by Hurricane Katrina, and serves on the faculty at Tulane University School of Medicine, where he received his MD. He still treats some patients at Stanford and plans to return to the faculty full-time in January.
Through his gift to Stanford, the neurosurgery department will create an endowed chair being awarded to Pak Chan, PhD, professor of neurosurgery, to further his research on the process known as apoptosis, or cell death, which occurs when patients suffer strokes, spinal cord injuries and brain trauma. The funds also will help support a new program to investigate novel strategies for treating spinal cord injuries, such as stem cell therapy, optical stimulation of spinal cord circuits and neuroprosthetics.
"Dr. Doty's exceptionally generous gift will allow us to support talented, creative scientists like Pak Chan, and allow development of innovative neurosurgery and neuroscience programs focused on neuroregeneration and restoring neurologic function after brain and spinal cord damage. We are extremely grateful to him," said Gary Steinberg, MD, PhD, the Bernard and Ronni Lacroute-William Randolph Hearst Professor of Neurosurgery and the Neurosciences, and chair of neurosurgery.
Doty also has a special interest in the work of the Dalai Lama, who visited Stanford in October 2005 for a series of discussions on the workings of the mind, both from a scientific and a spiritual perspective. Doty plans to support a follow-up project that will bring the Dalai Lama together with neuroscientists to explore the neurological basis for human compassion and altruism. Finally, Doty said he will support a research program in the neurosciences that will encourage postdoctoral scholars to develop novel devices for treating debilitating neurologic problems.
Doty, whose family was on welfare throughout his adolescence, and who worked his way through college, said he appreciates his ability to contribute to worthwhile programs, even though he's not living the luxury lifestyle he once envisioned.
"You make certain decisions and you live with them," he said. "I'm fortunate that not only am I able to contribute to others as a neurosurgeon, but my Stanford experience has allowed me to develop wonderful relationships and be exposed to immense opportunity."