The Hertz Fellowship 50 Years of Freedom to Innovate Jay Davis President

1. The Hertz Fellowship 50 Years of Freedom to Innovate Jay Davis President

2. Who was John Hertz? • Emigrated to American from the Kingdom of Hungary in Austro-Hungary at age five • Became a school drop out at ten on his Father's death • Was a boxer, a news reporter, a car salesman, and serial entrepreneur • Was a fantastic innovator -- car rental, Yellow Cab, and Checker Motors • Was a businessman – General Motors, Lehman Brothers, Hughes Aircraft Boards • Was with Fannie a successful horse owner and breeder • Was a key transportation advisor to the Government in both World Wars Personified the entrepreneurial and patriotic immigrant values that characterize this Nation

3. Hertz was a remarkable innovator and early adaptor of technology • He commuted to Chicago flying a Sikorsky S-38, being met by a special Yellow Cab This model plane was used by the Lindberghs to explore seaplane routes in South America and the Pacific

4. John Hertz was as successful in his avocations as his vocations • John and Fannie raised race horses, mostly run under her name • Here she is with Count Fleet, winner of the 1943 Triple Crown • His 25 length victory in the Belmont Stakes stood until 1973, Secretariat’s year

5. The Origin of the Fellowship • Hertz always wanted to be an engineer • In 1947 he founded and funded the Fannie and John Hertz Foundation for the education of undergraduate mechanical and electrical engineers • In 1963, shortly after Hertz’s death, under Edward Teller’s leadership, the Foundation Board shifted to graduate education in engineering and the applied physical sciences • The intent of the Fellowship is to provide FREEDOM that maximizes the creativity and accomplishment of the student

6. The Fellowship provides unique support • A five-year stipend and tuition package • Independence from grant funding • Including separate child support at $5,000 per year • The net current value of these Fellowships is $150M • Visiting and mentoring by graduate Fellows • Workshops and retreats • Learning from unique scientists and entrepreneurs • Problem solving together builds the habits of collaboration and community • Cross generational and cross disciplinary learning opportunities • A new and unique entrepreneurial initiative for funding of IP development and start-up activities

7. Why do we still care so much about technical education -- and bright people? • Norm Augustine, retired CEO of Lockheed-Martin, has a good explanation • Scientists and Engineers make up 4% of the US workforce -- and the top 1% of them make 90% of the important discoveries • Their efforts have traditionally produced 50%-85% of the growth in GDP • They disproportionately create jobs for the other 96% • In the present national security, economic, political and health care environment, we will need the contributions of the brightest to compete and prosper

8. The Fellowship Process is Proven • Cast a wide net -- advertise in late summer, mailing and e-mailing 20,000 flyers to all universities and colleges in the US that grant four year technically oriented degrees • Evaluate 600+ applications by the close of October • Conduct 150 first round interviews by Volunteers (Board Members, alumni Fellows, and Hertz friends) • Re-interview 50 finalists with pairs of interviewers from February to mid-March • Select as many new Fellows meeting our criteria as we can support (fifteen in 2012) at our March Board Meeting • Assess this process regularly for quality and inclusiveness 2010 Interviewers

9. Graduate Schools of Current In-School Fellows West Coast--34 Central --10 East Coast--36

10. West Coast -- 18 Central -- 20 East Coast -- 41 Undergraduate Schools of In-School Fellows

11. West Coast -- 22 Central -- 26 East Coast -- 24 High School States for In-School Fellows

12. What are our results? • A high completion rate for PhD or equivalent degree • Those not finishing either choose to start corporations or are military officers for whom the PhD degree does not offer a career reward, particularly if in command track • Over sixty-five startups and hundreds of patents have resulted from Fellows’ work • 400+ Fellows are in tenure or tenure track appointments at research universities • Fellows in leadership positions in academia (two university presidents), the national laboratories, corporations and the military, two at Major General rank, one at Lieutenant general • Over thirty members of the NAS and NAE • Two Nobel Laureates since 2000

13. In the past decade we have added programs to build the Fellows into a Community • They gain extra skills and connections across disciplines, geography, and generations • So they have ready collaborators for interdisciplinary work • We sponsor annual retreats and workshops for the Fellows and recent graduates • These activities now figure in our recruiting and applications • Distinguished alumni Fellows or speakers like Bill Gates, William Perry, Arun Majumdar, David Thompson, and Larry Page share career, discipline, and business interests with the Fellows

14. In the past two decades, there has been a significant disciplinary shift • Originally, the Foundation’s interests were focused on the physical sciences and engineering • Not surprising during the Cold War • As the life sciences and biology became more quantitative, we encouraged applicants in those areas • Now half of the Fellows are in such areas • Seven students are currently in MD/PhD programs David Van Valen, completed PhD in Applied Physics/Biological Physics at Caltech in 2011 and is attending UCLA medical school Maya Chandru, UCSF, Biophysics and Systems Neuroscience, enrolled in Medical Scientist Training Program, will finish medical school (completed 2 yrs) upon completion of PhD

15. Many Hertz Fellows are successful entrepreneurs David Thompson, CEO and Founder Orbital Sciences Stephen Samouhos, Co-FounderKGS Buildings John Frank, Founder and CTO for MetaCarta, recently sold to Nokia

16. Hertz Fellows are Leaders at the National Labs Wendy R. Cieslak Director, Weapons Materials R&D Sandia National Laboratories Hertz Board Director Carol J. Burns Division Leader Chemistry Los Alamos National Laboratory Hertz Board Director Kim S. Budil N Program Manager Global Security Lawrence Livermore National Laboratory

17. Hertz Fellows excel in Academic Leadership as well Ilene Busch-Vishniac Provost and Vice President McMaster University Lee T. Todd President Emertitus University of Kentucky Alice P. Gast President Lehigh University

18. Hertz Fellows serve in the military at all levels Major Luis Alvarez, USA Natick Soldier Research, Development & Engineering Center, NJ COL Eric Boe, USAF Astronaut, pilot for Endeavour STS-126 Major K. Dean Mitchell US Army Afghanistan Captain Tyler Robarge, USAF Afghanistan, now at Test Pilot School

19. Three Hertz Fellows have been selected as Commander at the AF Research Laboratory MGen Neil McCasland Commander, AFRL Lt. Gen Ellen Pawlikowski Commander, Space & Missile Systems Center, Air Force Space Command MGen (Ret) Paul D. Nielsen CEO & Director Software Engineering Inst., Carnegie Mellon University Hertz Board Director

20. What is the status of this program? • We have proven, tested results • We have great visibility, brand and reputation in academic and technical organizations • We are frustrated by the number of qualified candidates whom we cannot support, typically another ten to fifteen a year • We are working to increase our endowment to increase the number of Fellowships awarded

21. What are the current Hertz Financials? The endowment is $20M and we have raised approximately $19M in the past five years, the largest portion from Fellows Annual expenses for FY11 of approximately $3.7M are as shown in the Pie Chart The present goal is to raise $100M -$150M, support 100 - 120 Fellows in School, and then explore the next step in growth Twenty-five percent of the graduate Fellows have contributed to the Foundation 9% 13% 78% The FY11 Audited Financial Report is on our website at www.hertzfoundation.org

22. What future do we want for the Fellowship Program? • As this program enters its second half century, its value and promise for the Nation are larger than ever • We offer you the opportunity to support and know these remarkable young men and women • As the current Fellows have before, the future ones will make differences we cannot begin to imagine Our goal is to award 25-30 Fellowships a year Join us in supporting the Freedom to Innovate!

23. We are downtown in Livermore – Come visit us Join us in supporting the Freedom to Innovate! We will be coming to see you!