"I don't think corporations or individuals could find a more direct way to have a positive influence on people's lives and the state of Utah," said Bryan Ritchie, director of the U.'s Technology Commercialization Office, said in a statement. "Donations to this fund help create new companies, jobs and wealth."
While the U. claims to be a national leader in generating startups from research, Ritchie concedes there is room for increasing the number of jobs and other economic benefits the companies create.
"We could do a lot more higher-quality startups if we have more money to plow back into it. We think there is a group [of potential donors] that have never given to the U. who would want to be a part of this process," he said in an interview.
In recent years, venture philanthropy has gained traction as a way to advance global health, the search for new energy sources and other fronts, according to Denver-based adviser Bruce DeBoskey.
"People are looking for innovation, new ideas, something that works," DeBoskey said. "Sadly, philanthropic initiatives have been throwing millions, billions at these problems for decades, and we haven't made as much progress as we like. I'm seeing a trend for sophisticated philanthropists wanting to take more risks for really moving the needle."
University technology transfer may be new to philanthropy, but it is an appropriate place for benefactors to invest, he said. Making a disease-curing invention available to the market is not much different than supporting university research, which philanthropists have been doing for years.
"But this has an entrepreneurial spin that makes it more exciting," DeBoskey said.
The new U. fund is welcome news for electrical engineer Neal Patwari, a faculty inventor who co-founded Xandem Technology, a company commercializing Patwari's inventions that wirelessly track people behind walls.
"A lot of the trouble faculty have starting a company is that you have to hire people to do the engineering and development; you need money for that," Patwari said. "We started the research at the university, but developing a product can take years of effort, even if you're sure it's going to work."
Patwari and his former graduate student Joey Wilson conceived the technology, known as tomographic motion detective, for security applications and licensed it from the U. But their company is now adapting it for monitoring a person's breathing in a medical setting.
The money donated to the new U. fund could wind up helping Xandem reach this goal. But it will also be used to enhance education, since students are deeply involved with commercializing U. technologies, according to vice president for institutional advancement Fred Esplin.
"If they aren't involved, you might wonder," he said in an interview. "The idea is you have funds to work with not just for the economic development benefit but also for the student experience."
The U.'s announcement, however, emphasized non-educational needs: securing patents; further research and development; creating prototypes; hiring management teams and crafting marketing materials.
Funding for such needs historically comes from the University of Utah Research Foundation, a subsidiary nonprofit that owns the U.'s portfolio of intellectual property arising from mostly federally funded research. The foundation reaps millions each year in royalties and licensing fees, which is dispersed to faculty inventors and their departments, covers legal costs and supports commercialization.
According to the Association of University Technology Managers' most recent annual survey, the U. pulled in $73.4 million from various revenue sources arising from 287 licensing agreements between 2008 and 2010.
"We don't have access to a large chunk of the earnings," Ritchie said. His office receives less than $2 million a year from licensing fees to promote U. inventions and the startup companies that carry them to market.