October 24, 2007
Billionaire plans to give away $100 million
Broadcom co-founder says his philanthropy shows he is re-engaging after taking time off for divorce, health reasons.
By JOHN GITTELSOHN
THE ORANGE COUNTY REGISTER
Billionaire Henry T. Nicholas III plans to give $100 million to local charities over the next five years, creating one of the largest personal foundations from one of the largest personal fortunes in Orange County.
UC Irvine's school of electrical engineering, St. Margaret's Episcopal School in San Juan Capistrano and charities supporting youth sports, inner-city education and disabled veterans are among the beneficiaries Nicholas said he plans to support.
Nicholas, who made his fortune, worth an estimated $2 billion, as co-founder of Irvine semiconductor maker Broadcom Corp., said details of his donations will be released in coming weeks.
He announced several philanthropic initiatives in 2004 that have been stuck in what he called "suspended animation" while he tried to work out his divorce and deal with health issues, including a pre-cancerous condition called Barrett's esophagus.
"This is my return to philanthropy," Nicholas, 48, said during an interview at his Newport Coast mansion, sitting on a veranda with a view of the Pacific clouded by falling ash from the wildfires. "Over the next five years we'll donate more than $100 million."
Nicholas' largest donation to date is $10 million to St. Margaret's Episcopal School, where his three children are students.
Until now, he has worked with his estranged wife on charitable pursuits. The Henry and Stacey Nicholas Foundation had $29.5 million in assets in 2005, the most recent tax year it reported. Nicholas said that money will still be available for charity, but he decided to go solo rather than let protracted divorce proceedings delay more gifts.
"Community property would be an issue, except we're amazingly rich," Nicholas said. "I'm not sure anybody should have this much money."
Nicholas had a lot less money Wednesday. Most of his wealth is in 35 million Broadcom shares. He lost about $250 million after the company's stock plunged 17 percent or $7.14 a share.
Nicholas seemed unruffled by the market. He appeared healthier than during an interview in August, when his eyes looked sunken and he wobbled on his feet.
Nicholas said his decision to dive into philanthropy is not an effort to clean up his reputation.
He declined to discuss a series of personal legal problems, citing the advice of his attorneys. He is being sued by a former personal employee who alleges he used cocaine and other drugs. Federal investigations are looking into Broadcom's stock option compensation program while he was the company's chief executive officer. The former chief operating officer of his family fortune, Craig Gunther, was indicted in August on federal charges of trying to evade reporting requirements for large cash transactions.
He talked about his vision of what he called "philanthropreneurship" – charitable donations that increase their impact by combining with business practices. As an example, he described using the type of broadband technology pioneered by Broadcom to broadcast lectures by faculty at St. Margaret's or UC Irvine to inner city students.
"Our goal is to make an investment and establish a service," he said.
Does he have a model philanthropist he intends to emulate?
"Me," he said. "I want to be the next Henry Nicholas."
Although Nicholas' total giving will be large, he has some of catching up to break the record in Orange County.
The largest personal foundation locally is the Arnold and Mabel Beckman Foundation with $531 million in assets.
Nicholas' former partner at Broadcom, Henry Samueli, has donated more than $160 million to UCI, Chapman University, the Orange County Performing Arts Center, Jewish charities and other causes.
Irvine Co. chairman Donald Bren has personally donated more than $110 million to UC Irvine, the Irvine Unified School District and donations to preserve land around the Irvine Ranch.
Nicholas announced three specific gifts on Wednesday:
* $500,000 to Habitat for Humanity of Orange County to help build homes for disabled veterans.
* $500,000 to for youth and senior programs run by the Episcopal Diocese of Los Angeles.
* $750,000 for low-income student scholarships to St. Margaret's.
Nicholas also announced plans to support the Fight on Foundation, a San Clemente group that is sponsoring all-star football games for athletes from Southern California high schools and historically black colleges and universities. The two games will be played at Cal State Fullerton's stadium on Jan. 26, 2008, and broadcast on ESPN, said Jay Noonan, head of the Fight On Foundation.
"The proceeds will go for scholarships for deceased military, fire and police," Noonan said.
Although Nicholas did not announce a specific gift to UCI, a big beneficiary is certain to be the school's Henry Samueli School of Engineering. Nicholas already has endowed chairs in the school and financed a prize to recognize "high-risk/high-yield" research in telecommunications and technology.
Nicholas invited the engineering school's dean, Nicolaos Alexopoulos, to his home for Wednesday's announcement. Alexopoulos, a native of Greece, said he had been in lengthy talks about how to make the most of a Nicholas' gift.
"When I was a foreign graduate student, I benefitted from people like Nick," Alexopoulos said, using Nicholas' nickname. "Nick and Henry (Samueli) were my students when I was at UCLA. They were the two tall guys. You graduate kids and some of them will change the world."
O.C. family philanthropists
The Henry T. Nicholas III Foundation will be one of the largest personal philanthropies in Orange County. Here is the size of family foundations of other wealthy individuals in Orange County, as reported in on Guidestar.com, a nonprofit tracking service.
Argyros Foundation. $104.9 million. Apartment and property entrepreneur George L. Argyros and his wife Judith have supported Chapman University, the Horatio Alger Foundation and, most recently in August, a $10 million pledge to South Coast Repertory.
Arnold and Mabel Beckman Foundation. $561.3 million. Chemist and medical instrument inventor who founded Beckman Coulter Inc. donates to health care, chemistry and other science research causes. The Beckman Research Institute of the City of Hope has a $169 million endowment for cancer research and treatment.
Donald Bren Foundation. $6 million. The Irvine Co. chairman and Orange County’s wealthiest individual, has donated to education and land conservation projects. This summer, he announced a $20 million gift to become the naming donor of the new law school at UC Irvine.
The Crean Foundation. $83.9 million. The late founder of Fleetwood Enterprises Inc., a maker of mobile and prefabricated homes, supports programs children’s and educational charities.
William and Sue Gross Foundation. $207 million. Bond fund manager for PIMCO in Newport Beach has supported Hoag Memorial Hospital, Duke University, Doctors without Borders and stem cell research at UCI.
The Samueli Foundation. $8.5 million. Broadcom co-founder Henry Samueli and his wife Susan have donated more than $160 million to UCI, Chapman University, the Jewish Community Center, the Orange County Performing ArtsCenter and alternative health research projects.
Segerstrom Family Foundation. $12.2 million. Henry Segerstrom, whose family owns South Coast Plaza, has spearheaded development of the Orange County Performing ArtsCenter in Costa Mesa.
Swenson Family Foundation. $57.6 million. James and Susan Swenson of Dana Point have donated to the Ocean Institute, Mission Hospital and Children’s Hospital of Orange County.