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Venture Discovery

The Ellison Medical Foundation believes it can remove bureaucratic obstacles to research. Wishful thinking?

Larry Ellison, the billionaire founder of Oracle, is routinely ridiculed for his capricious spending and flamboyant lifestyle. The owner of an Italian fighter plane and a home that suggests a Japanese theme park, he is known to spend more time on his racing sloop than at his corporation's mirrored and palatial California headquarters.

But, as with his longtime software rival, Bill Gates, and previous titans of industry, like John D. Rockefeller and Andrew Carnegie, the philanthropic impulse now motivates Mr. Ellison: in 1998, he founded the Ellison Medical Foundation (EMF), the result of a chance meeting with Joshua Lederberg, a Nobel laureate in medicine. The two devised a scientific mission that Mr. Ellison is now underwriting.

Though modest in comparison to the scope of most funding entities, the EMF hopes to create a significant effect on science through the discoveries it anticipates fostering and the way it provides money and intellectual freedom to researchers. While the National Institutes of Health may be a lumbering and risk averse bureaucracy, the EMF aspires to be a nimble and uncluttered venture capital firm. “Larry Ellison's background is such that he made his money taking risks; he understands taking risks,” says EMF Executive Director Richard Sprott. “We might give 20 grants and hit on 1—and that's acceptable.” As with a VC firm, one good investment would wildly compensate for many unsuccessful ones.

But the EMF is by no means the first privately funded institution to define itself in opposition to the NIH: consider the Howard Hughes Medical Institute, which uses molecular biology to study diseases, and the Burke Institute, which specializes in research on aging, to name two others. The questions, therefore, suggest an economic puzzle: is there demand for private funds because, as its critics claim, the NIH has limitations? Or is there simply demand for funds to underwrite second-rate or lunatic research that established bodies like the NIH wouldn't touch? In other words, do benefactors of institutions like the EMF have more money than science?