“IT’S AN AMAZING STORY, and I can’t believe it isn’t more well known,” American Century Investments CEO Jonathan Thomas said at the outset of an interview at the NAPA 401(k) Summit in Tampa Fla. in early April.
The story to which he referred is the firm’s unique relationship with the Stowers Institute for Medical Research, a world-class Kansas City-based facility started by American Century founders Jim and Virginia Stowers.
Jim originally trained as a physician and Virginia was a nurse. Both were diagnosed with cancer in the 1990s after leading the investment company since 1958. Their experiences and medical backgrounds fueled a passion for helping others, and in 1994 the institute was born.
“They traveled the world trying to figure out what to do,” Thomas explained. “They realized a lot of the therapies and cures back then hadn’t evolved over time. They decided to do something that almost nobody does while they’re alive; they gave away almost every penny of their wealth from American Century Investments, including stock ownership, to medical research. Today, the institute is our largest single owner.”
Refurbished from an older hospital, it sits on a 10-acre campus in the city’s center, and the ownership structure means the institute has received almost $1.9 billion in dividends since 2000.
“It’s real money,” Thomas added. “It has between 500 and 600 staff people and 17 separate principal investigators. They’re all focused on finding cures for gene-based diseases—diabetes, cancer, osteoporosis, memory issues, etc.—and things like regeneration. It’s fascinating, and this great work is all funded by American Century.”
It gives employees an incredible sense of purpose, knowing that coming to work, doing their jobs well, and winning and retaining business will help advance medical breakthroughs for generations, “it’s the most inspiring thing you can imagine.”
A universe of one
And yet, aside from the greater Kansas City metropolitan area and specific financial services sectors, it isn’t all that well known, as Thomas said.
“We’re what I call a universe of one. What I mean by that is no one else does anything like this, not only in financial services but anywhere else around the globe, of which we’re aware. I wish there were 10 or 20 of us because then we would have a category, and we could say we’re one of those firms. When we’re one of one, it’s hard to get the story out.”
While it might seem like Calvert, Thrivent Financial, or any number of socially-conscious firms (and in fact, over 80% of American Century assets have ESG integration in them), 40% of every dollar the firm makes goes to fund medical research, a significant differentiator.
“When I started 17 years ago, we had just begun to tell the story of the connectivity between American Century and the institute, and nobody wanted to hear it,” Thomas said. “I kept telling it anyway, and as I did, they’d say it doesn’t make any sense. In fact, they saw it as an impediment to our success.”
Fast-forward to today, with the prevalence of ESG and impact investing. When he meets with investors, whether consultants or institutional clients, the No. 1 topic of conversation is this unique model and its positive impact on society.
Stowers Stats: The Institute by the Numbers
- Three National Academy of Sciences members
- One Howard Hughes Medical Institute Investigator
- Four American Academy of Arts and Sciences Fellows
- 70 researchers providing core support
- 60 postdoctoral researchers and fellows
- 60 predoctoral researchers
- 17 principal investigators
- 500 staff members
- $1.87 billion spent on research
- 600,000 square feet research facility
- 10-acre campus
- 17 technology centers
- Two affiliated graduate programs
- Three Stowers grad school training programs
- 150 ongoing research projects
- 1,496 scientific papers
“It’s really profound. When we’re in a finals meeting, and someone says, ‘Okay, it’s between you and this other company, you’re both good, and we can’t go wrong with either,’ and we say, ‘By the way, if you choose us, 40% goes to fund medical research,’ that’s a tie-breaker.”
Best and brightest
The funding model is also a major reason the institute can attract some of the scientific community’s best and brightest. Because the endowment is so large, they don’t have to spend excessive amounts of time writing and applying for grants.
And because the institute is so high-tech and well-funded, it can build robots to do much of the basic lab work required of scientists at other organizations. They can then spend more time with their “heads down practicing their crafts,” which “liberates a scientist to practice science.”
“It’s a huge part of why I left Wall Street to get back to Main Street, which is where we’re located,” Thomas concluded. “I find it very rewarding. I can’t tell you what an honor it is to work in a company that does that and serve as CEO where the employees are so motivated. It’s a very mission-driven culture.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
Great article John!! Great tribute to an amazing company who has proven you can do good and still be a very successful company.