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Sound Counsel
John Egan
11/01/2007
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Before contributing $50 million
each to the University of Texas M.D. Anderson Cancer
Center in Houston and the UT Southwestern Medical Center in Dallas last May,
financier and oil magnate T. Boone Pickens, 79, whose net
worth is estimated at $2.5 billion, consulted his inner circle of corporate
advisors about making the gifts. For Pickens, whose name is synonymous with bold
corporate takeovers in the 1980s, philanthropy is an investment, with specific
goals and a desired return. With a net worth of $1.3 billion, Billy Joe ‘‘Red’’ McCombs, 80, is somewhat of a legend in Texas. In
his career he founded a network of successful car dealerships and cofounded
radio station giant Clear Channel Communications. Before donating $50 million to
the University of Texas, Austin, business school seven years ago, McCombs sought
counsel from his wife and their three daughters. The family collectively made
the decision to endow the institution (now called the McCombs School of
Business) with what became the largest donation in its history. Similarly, the
McCombs family worked together to make a $30 million donation to the M.D.
Anderson Cancer Center in 2005. Finally, Tim Blixseth, 57, a self-described
timber and real estate baron from Southern California, whose net worth is
estimated at $1.2 billion, recently gave $10 million in real estate to a school
district in Riverside County, Calif. In stark contrast to his approach to
business, Blixseth keeps his philanthropic endeavors simple and to the point: "I
have a rule of thumb," he says. "Try to help in areas where the help will
directly get to those who really need help." Not surprisingly, when mulling over
how best to bestow this gift, he relied on one person: himself.
These three billionaires embrace very
different approaches to philanthropy—and to seeking advice—when deciding how
best to help others. Pickens and McCombs consult with family or close business
associates when giving. Blixseth, on the other hand, goes it alone, avoiding
administrative processes and relying instead on his gut feelings about a
recipient’s merits. While this approach is certainly the prerogative of a very
generous, self-made philanthropist, Pickens’ and McCombs’ approach, experts say,
offers numerous advantages in an environment in which requests for aid can often
be overwhelming. Paul Comstock, chairman of Houston investment and wealth
advisory firm Paul Comstock Partners, says philanthropists should surround
themselves with a cadre of qualified, trusted advisors that can include family
members, financial and legal advisors and charity officials. "In a multitude of
counselors, there is safety," Comstock says, borrowing a line from Proverbs.
Red McCombs: A Family Affair
In McCombs’ case, the family’s careful vetting of recipients and
causes drives gift choices. As needed, McCombs, his wife, Charline, and their
three daughters—Lynda McCombs, Connie McNab and Marsha Shields—gather at the
family home in San Antonio or at McCombs’ nearby office to discuss philanthropic
requests.
TOP VIEW Philanthropists Red Mccombs, T. Boone Pickens and Tim Blixseth embrace very different approaches to philanthropy and to the counsel
they seek when deciding how best to help others. Pickens and McCombs rely on
family or close associates to provide sound advice and insight, while Blixseth
relies on his own experience and a gut feeling. As the size of charitable donations grows, experts caution that to truly make an impact, philanthropists should work with legal, financial and philanthropic experts before bestowing large sums of money on even the most reputable and deserving of recipients. |
Typically, the family will not commit to making a donation
unless the parents and their three daughters unanimously agree on it. But if one
family member leans strongly in favor (or against) a contribution, the five of
them often will side with that person, McCombs says. "Sometimes if someone is
opposed to it, it takes a little more conversation to get it done," he says.
"There’s no question that the emotional response to some [requests] is greater
than others."
Although the McCombs family set up a private foundation 26
years ago, the foundation does not employ a staff. "Our three daughters and my
wife all very excitedly participate. We are a staff. After all, it’s our money,"
he says. Conversely, McCombs says they do not have any procedure for formally
following up on their gifts to confirm that their contributions are being put to
good use. "We are taking somewhat of a leap of faith," he adds.
Family counsel won’t be limited to just his children, McCombs
says. He and his wife want to include their eight grandchildren, five of whom
are at least 21 years old, in the joy the family gets from sharing its wealth.
"We’re going to need to start bringing them into the loop, because up to this
point we haven’t," he says. "It’s time for them to start participating."
T. Boone Pickens: A "Wide-Open Group"
For Pickens, his paid corporate staff is his go-to team on
philanthropic matters. Marti Carlin, a former motivational consultant from
Tulsa, Okla., is the leader of the team. As director of community affairs,
Carlin sifts through the hundreds of philanthropic requests that Pickens
receives. Carlin and Pickens’ director of public affairs, Jay Rosser, frequently
visit organizations they are vetting as possible grant recipients. Longtime
associates of Pickens, Ron Bassett and Bobby Stillwell, lead the T. Boone
Pickens Foundation, which was launched last December with a $135 million gift
from the entrepreneur. Bassett, Pickens’ personal finance manager, is president
of the foundation, and Stillwell, one of his business ttorneys, is vice
president.
As Pickens explains it, he and his philanthropy team do not
follow a rigid, by-the-book process when discussing donation strategies. "We’re
a pretty informal, wide-open group up here. We don’t have any secret meetings or
closed doors," he says. "Everybody’s involved who wants to be involved."
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