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Fred Kavli, a physicist who left Norway for California as a young man and made millions manufacturing sensors for appliances, automobiles and aircraft, then late in life began donating much of his fortune to science, establishing a major prize he intended to rival the Nobel, died Thursday, Nov. 21 at his home in Santa Barbara, Calif. He was 86.

The cause was cancer, according to the Kavli Foundation, which Kavli started in 2000.

The foundation has given more than $200 million to establish 17 scientific research institutes at universities around the world for work in astrophysics, neuroscience, nanoscience and theoretical physics, including MIT’s Kavli Institute for Astrophysics and Space Research, which joined Kavli network in 2004. In 2008, the first Kavli Prizes were awarded, with recipients in each of three categories splitting $1 million. The prizes are awarded by the Norwegian Academy of Science and Letters in Oslo in September every other year.

“The point is to create visibility for science,” Kavli said in an interview with The New York Times in 2005. “The Nobels do a good job. It might take us 100 years to catch up.”

Kavli, who as a child marveled at the northern lights from his family’s farm on a fjord, earned a degree in applied physics at the Norwegian Institute of Technology in 1955 and arrived in the United States the next year. Two years later, after putting an ad in a newspaper saying he was an engineer seeking financing for a new company, he created the Kavlico Corp.

Kavlico developed a series of sophisticated sensors that help control a wide range of mechanical functions, whether helping car engines save fuel and limit pollution or operating dishwashers. They have been used on the space shuttle, the International Space Station and Trident and Poseidon missiles. By 2000, the company had 1,500 employees. Kavli sold it that year for $340 million.

He knew he wanted to establish a philanthropic foundation to benefit science, but he was unsure of how to do it efficiently. He consulted with several top university leaders, who told him that while they might have staff and facilities, they often lacked seed money to allow their researchers to explore experimental ideas — ideas that might fail.

The 17 Kavli institutes — they are scattered from Delft in the Netherlands to Beijing to Berkeley, Calif. — are intended to provide the seed money. The foundation has given each institute at least $7.5 million, with the assurance that the university hosting it will find another source to match the money. The money serves as an endowment that returns about $400,000 per year toward research. The foundation plans to expand the contribution to each institute to about $10 million, which, when matched, would provide about $1 million annually for research at each location, said Robert W. Conn, the foundation’s president.

Several scientists affiliated with the Kavli institutes have gone on to win Nobel Prizes.

“It is unrestricted funds,” Conn said, “which is indispensable in discovery science.”

Kavli was born on Aug. 20, 1927, in Eresfjord, Norway, near the country’s southwest coast. During much of his childhood, Norway was occupied by German forces. Food and gas were in short supply, and he and his brother, Aslak, risked their lives stealing fuel oil from the Nazis. The boys were entrepreneurs, running a lumber business. A lifetime later, Kavli’s passions included his 12,000-square-foot-house on a bluff overlooking the Pacific.

Survivors include two children from a marriage that ended in divorce.

Science leaders have praised Kavli and other newer philanthropists, including Paul W. Allen, the Microsoft co-founder, for making large donations toward research at a time when many university research budgets have declined.

The Kavli Foundation has supported a wide range of work. Among the seven winners of the Kavli Prizes in 2012 were, in nanoscience, Mildred S. Dresselhaus, a professor at the Massachusetts Institute of Technology, whose research helped usher in the age of nanotechnology; in neuroscience, Cornelia Isabella Bargmann of Rockefeller University, who studies the neural circuits of Caenorhabditis elegans, a worm with only 300 nerve cells, to learn how the brain processes information from the environment; and, in astrophysics, scientists who discovered the Kuiper belt, a cloudy disk of ice and rock near Neptune.

In 2005, when Kavli announced that he planned to start the prizes, he recalled skiing in the Norwegian mountains as a boy.

“At times,” he told a gathering in New York, “the whole sky was aflame with the northern lights shifting and dancing across the sky down to the white-clad mountaintops. In the stillness and loneliness of the white mountains, I pondered the universe, the planet, nature and the wonders of man. I’m still pondering.”