He Gives Best By Investing

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their own regard to their own interest. We address ourselves not to their humanity but to their self-love. --Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations

A Dallas high school jazz combo desperately improvises to kill time in an auditorium packed with local school-board members, education bureaucrats and fidgety students. The guest of honor, Lawrence Ellison, 55, is running a little late. Ellison is CEO and founder of the Oracle software company. And today at least, with his stock holdings outrunning those of Microsoft's Bill Gates, Ellison is the richest man in the world. His jet has just touched down at Love Field. So the combo plods on, trying to fill another 20 minutes.

Just as the drummer is about to launch into yet another solo, the tall, gaunt, goateed Ellison sweeps down a stairwell to the side door of the auditorium, trailing a retinue of blond female publicists. He pauses a moment so that he is backlighted in the doorway, bending toward one of his attendants and asking if his wide forehead looks too shiny in this light. He acts like a rock star about to step on stage.

This event, like so much of Ellison's life these days, can be read two ways. On the one hand, it is a grand gesture: the donation by Oracle of 1,100 New Internet computers to the Dallas public-school system. But it is also a flagrant attempt to hype a pet project of his: the inexpensive network computer. This particular model is built and sold by NIC, a company partly owned by--who else?--Ellison. Later, on a CNN feed from a high school social-studies classroom against a backdrop of a few of the donated computers, Ellison will talk up this project, part of the Oracle Promises program, while also plugging the NIC and its sub-$500 price tag: "A computer every family can afford. A true bridge over the digital divide."

Ellison is not a man to shy away from his own Smithian self-interest, and he believes the profit motive could be the best tool for solving the world's problems--more effective than government or private philanthropy. "Which did more for the world?" he asks. "The Ford Motor Co. or the Ford Foundation?" He shakes his head. "That's an interesting question."

He isn't completely averse to charity, but for a man worth $50 billion, Ellison doesn't give all that much: $100 million a year, he says, to his Lawrence Ellison Foundation, which finances medical research, especially into potential cancer cures. His single largest contribution outside the foundation was $5 million, to the University of California Davis Medical Center in 1998. "This isn't about who can write the biggest check. I mean, no one, actually, can write a bigger check than me. The point is results," Ellison says. "There are so many venture capitalists chasing dumb ideas, and philanthropists are just as bad. All they measure is what they have given rather than what the results are."

Ellison believes he does more good for society through his entrepreneurship, particularly his investments in biotech start-ups that he feels may have a leg up on finding a cure for cancer and other diseases. He has made cancer fighting a personal goal; his mother died from the disease.

One of his biotech start-ups, a for-profit company called Quark based in Israel, is on the verge of what Ellison says will be a major breakthrough in cancer therapy, one that allows patients to endure higher doses of chemotherapy and radiation without collateral damage to healthy cells. He vows that Quark will be commencing clinical trials shortly. Not coincidentally, he says the company will be going public sometime this year, which will enrich Ellison even further, all the while doing the world a world of good. "The for-profit model is the most efficacious in terms of medical breakthroughs," he says. When pressed, he vows to fund out of his own pocket new cancer therapies for some patients who can't afford them.

"Why do I do this?" he asks, ready with his own answer. "It's a strategy for happiness. If you're on the road for self-esteem, it's not about accumulating as much money as possible. The best way to be happy is to help someone else." And the best way to help, he thinks--echoing Adam Smith--is by making virtue profitable.