For many months now, California's stem cell research program, which expects to run out of cash by the end of this year, has been seeking to raise privately $220 million. But it has yet to report that it has snagged a significant chunk of that amount.
The most recent overview of the current fundraising effort came last December at a meeting of the governing board of the California Institute for Regenerative Medicine (CIRM), as the state stem cell agency is formally known.
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| Jonathan Thomas CIRM photo |
The fund-raising effort is targeting high net-worth, potential donors and medically oriented foundations with a smorgasbord of philanthropic options. The choices can be tailored to a potential donor's appetite, including supporting specific types of research, Thomas said.
Thomas is expected to update the board on the fundraising effort at its next meeting March 21, which will be based at its Oakland headquarters. The session will also be available on the Internet with remote hook-ups that will allow members of the public to comment and ask questions.
CIRM was created by voters in 2004 who also provided it with $3 billion in state bond funding. No additional source of cash was established. At the beginning of this year, the agency was down to its last $144 million for new awards. It has set aside cash for administering its final awards should a new bond measure fail to pass.
Here is the text of what Thomas told the 29-member board in December about the fund-raising drive. The text comes from the transcript of the meeting.
“So I'm going to move next to a report on the bridge fundraising, sort of a year-in-review summary. As you recall, through the end of last year (2017), we had secured 7 million from Bill Bowes and Pitch Johnson. We talked about that earlier (2015). (The funds are allocated for a "wind-down.")
“At our December board meeting last year, when we reported on the fact we were aware we're going to be out of funds potentially by the end of 2019, we talked about a couple things. One, Bob Klein (former chairman of the agency’s governing board) was here and talked about his potential intent to run a new bond measure in the november 2020 general election for $5 billion.
We, also at that meeting, discussed the fact that we would like to be able to keep things going at a normal pace between the time we had run out of money, which we anticipated to be late 2019, and the election. And so we decided at that point that we would look to pursue bridge funding to fill that gap ideally in an amount equal to roughly the average of what we put out over the last few years.
“So the vision at that time was to raise bridge funds to not only go through 2020, but, if successful in 2020, the next actual realization of bond proceeds would be in the spring issuance by the state treasurer of bonds on behalf of all state agencies funded out of the state treasurer's office. So it would really be getting from late 2019 to spring of 2021.
“The idea was all of that money had to be raised in a staggered way through the last installment in the middle of 2020. A note that this is just referring to research funds. We have admin funds earmarked currently all the way through 2023.
“The strategy at that point to pursue the vision was to identify the most likely parties interested in medical research both in California and in the rest of the country. We spent a great deal of time doing that.
“Secondly, to tailor the asks to specific candidates that we felt would be the most successful in terms of what we were pitching. Thirdly, to approach those candidates either directly or through third-party intermediaries well known to the candidates. And the theory there is not only is how you ask is important, but who gets you in the door to ask is vital.
“So we've spent a lot of time analyzing who the correct third-party intermediary would be who would have individual and direct contact with the candidates in question. We've had weekly meetings of our fund-raising team, consisting of myself, Maria Millan (CIRM president and CEO), Maria Bonneville (vice president of administration for CIRM), Scott Tocher (CIRM general counsel), and Eliana Barnett (senior executive assistant in CIRM's office of president), to discuss strategy as we continue to update. And we have coordinated with Bob Klein's office and with Melissa King (executive director of Americans for Cures) of Bob Klein's office on these discussions. (Klein founded Americans for Cures.)
“The plan to implement the strategy is to offer a menu of fund-raising options including charitable gifts, the loan product that we discussed that tied to the election, program-related investments, and other derivatives of those ideas. We developed that menu of options in consultation with legal counsel, bond counsel for the state, the state treasurer's office, the state controller's office, and other outside parties with relevant input, such as those that have had programs that we might wish to emulate. Note that we're asking for a variety of things, including unrestricted gifts or loans or gifts or loans to specific projects or conditions or whatever.
“The idea with the gift would be, or loan, if you put money in, not only would it enable the bridge period, but it would allow for giving us the most credible shot of getting an election passed in 2020, at which time, whatever your particular interest would be, if the measure passed, you would have a tremendous leveraging effect.
“So if you were to put in, for example, 50 million and the measure passed, you've have a hundred-to-one leverage that would result from that, a good chunk of which could go towards whatever your specific interest was.
“So as we've been developing those ideas, we've been refining the asks as we've gone along in terms of what feedback we get as to what sounds more appealing or less appealing.
“To date, implementing that plan, which is connected to the strategy, we've met or had confidential calls with dozens of stakeholders, including ultra high net worth individuals whether individually or in groups.
“I referenced an event that Bob and I did in the summer in the Palo Alto area for a number of family offices. We've also talked, met with major foundations, with corporations who have an interest in the medical research space, and with numerous third-party intermediaries of the kind I described earlier. The way it sort of is broken down, been looking at funding either CIRM generally or with respect to specific projects, which I've sort of taken the lead on. Maria Millan has done a lot of great work in developing project-specific related asks for different initiatives that CIRM either has or would consider having that would get the fundraisers in the game.
“To date, as you might expect, a number of the meetings that we've had, the people we have talked to have, as far as the pitches go, either declined respectfully, others are ongoing as we speak. Since the last board meeting, we've continued our strategy discussions of third-party intermediaries. We've had several approaches to specific ultra high net worth individuals either in person or through these intermediaries. As before, a number of those have declined. However, there are a number of those discussions which are ongoing.
“We've calendared a number of meetings with potential stakeholders between now and the next board meeting, including meetings with major foundations, ultra high net worth, again, either in person or through third-party intermediaries. In addition, we have two group meetings similar to the one we had in the summer with family offices scheduled for the first quarter, which are one in San Diego and one in Los Angeles.
“So that is sort of where we are at this point. We continue to look for our anchor investor. And if we can do that, the strategy is when you get the anchor investor on board, that anchor investor typically has a number of friends that he or she can then rope into the fold. We're also going to focus more beyond the anchor investment to the smaller potential gifts. We've spent a great deal of our time on the anchor effort. And we will be, as we have successes, reporting in real time back to the board and in the next in-person meeting in March.
“So that's a review of the year. Are there questions? Thank you. That is most definitely a subject to be continued and continued and continued.”
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