Search a list of all grants that the George Kaiser Family Foundation made in 2009.
From bustling preschools in north Tulsa to smoothly paved trails winding along the Arkansas River, George Kaiser's influence is everywhere in Tulsa. Yet Kaiser himself is nowhere.
His family name appears on one building - the oil and gas company he has operated for more than 40 years - despite the fact that his foundation has given more than $300 million to charity in Tulsa over the past decade.
That apparently suits Kaiser - ranked by Forbes magazine as one of America's richest men, with an estimated $10 billion fortune - just fine.
"Naming rights are a seductive philanthropic inducement, yet more anonymous operational support may better advance the charitable purpose," Kaiser writes in an essay for an upcoming issue of the Chronicle of Philanthropy.
Kaiser, 69, eschews publicity and society functions and rarely gives interviews. Friends say he'd rather visit a women's prison or preschool serving poor children than don a tuxedo and attend a banquet.
In recent weeks, a national controversy over a federal loan guarantee for a solar company in which his foundation invested has swirled around him. A congressional investigation is under way into the loan guarantee program, and critics have questioned whether Kaiser, who raised at least $50,000 for President Barack Obama's campaign during a 2007 fundraiser, received preferential treatment.
Kaiser has declined to defend himself in the media, although a spokesman issued one brief statement noting that the George Kaiser Family Foundation was among investors that suffered a loss when the solar company went bankrupt.
Tycoon's early years
Kaiser is a self-effacing man, referring to himself in one 2005 speech as a "robber baron from Red State America." He owns no vacation homes, airplanes or yachts and travels on commercial flights, often flying coach.
Aubrey McClendon said he first met Kaiser in 1989, when the two had lunch in Tulsa. McClendon was just starting Chesapeake Energy Corp., now the United States' second-largest natural gas producer.
"I'll always remember after it was over seeing him fold himself into a used Crown Victoria car that he had recycled from his field operations," said McClendon, now chairman of the board and CEO of Chesapeake. "I knew then that I was dealing with a man who knew the value of a dollar and also knew how to relate to people from all walks of life."
While Kaiser's $1.6 million home in midtown is far above Tulsa's average home price, records show that his top employees live in homes valued considerably higher.
For this story, the Tulsa World interviewed about a dozen people and reviewed hundreds of pages of nonprofit records, court filings and other public records as well as news accounts and transcripts of speeches by Kaiser. He declined a request for an interview but answered a handful of questions sent via email to a spokesman.
Kaiser works about 70 hours a week, much of it in his Kaiser-Francis Oil Co. office in south Tulsa. He spends about half of his time on philanthropy and the rest on his energy, banking and other businesses.
Kaiser communicates often through email. He once responded via email to a reporter astride an elephant in India, where his foundation bought about 4 percent of the Bombay stock exchange.
Tony Knowles - former two-term governor of Alaska and president of Kaiser's National Energy Policy Institute - described Kaiser as "informed and engaged" in policy discussions.
"He asks questions, brings up issues. It's a wonderful combination of his feet are on the ground and his head is in the clouds," said Knowles, who was born and raised in Tulsa.
Kaiser is married to Myra "Cookie" Block, 66, of Tulsa. A story in the 1980 Tulsa Tribune described her father, Charles Goodall, as a philanthropic oilman. She is a curator of fiber art work, founder of the Brady Craft Alliance and reportedly shares her time between Tulsa and San Francisco.
Kaiser is more closely affiliated with Congregation B'Nai Emunah, considered the more conservative of Tulsa's two synagogues. Records show that the George Kaiser Family Foundation gave the congregation $28,000 in 2009.
"We're so proud of him in the Jewish community," said David Bernstein, community relations director for the Jewish Federation of Tulsa. "He gives to causes in the community and outside the community. ... You have to know what you are doing and see that it meets his standards."
Kaiser was the first in his immediate family to be born a U.S. citizen. His father, Herman Kaiser, was a judge, and the family fled Nazi Germany and came to Tulsa in 1940, sponsored by an uncle. Kaiser was born four years later.
Kaiser graduated from Tulsa's Central High School and then Harvard, obtaining an undergraduate degree and MBA.
He initially wanted to be a foreign service officer until, when researching a paper in college, he learned that foreign service officers are unable to make policy decisions.
Kaiser married Betty Eudene, whom he met on a blind date, and the couple had three children: Philip, Leah and Emily. When Betty died in 2002, she was described as an advocate for literacy who volunteered more than 7,000 hours with the Tulsa City-County Library's literacy program.
The family started Kaiser-Francis Oil Co. in the mid-1920s as Francis Oil, named after an aunt. Kaiser took it over in 1969, after his father suffered a heart attack.
It grew from a small operation with fewer than a dozen employees and wells in one state to a diverse oil and gas company with more than 1,000 employees and operations in 25 states and Canada.
Tom Ward, chairman and chief executive officer with SandRidge Energy Inc., based in Oklahoma City, said he has sought Kaiser's advice numerous times throughout his career, calling him "the most astute investor I've ever met."
"I look at George Kaiser as being probably the most influential businessman in my life as far as someone I could look up to and take his advice not only about business but how he lives," Ward said.
McClendon said Kaiser "is widely regarded as the smartest oilman in the business."
"He went to work early in his life at a small, family-owned oil company and built it through hard work, good decision-making and reasonable risk-taking into one of the largest private producers of oil and natural gas in the industry."
Like his entry into the oil business, Kaiser's role in the banking world also began in a low-key way and grew to become high profile today.
Along with fellow oilman Charles Schusterman, Kaiser began acquiring small shares of the Bank of Oklahoma, news accounts state. By 1980, he and Schusterman owned the second-largest portion of BOK stock.
In 1986, the Federal Deposit Insurance Corp. propped up the struggling bank with an infusion of cash. Five years later, Kaiser bought it from the FDIC for $60 million. Today, the publicly traded BOK Financial Corp. makes more than that in one quarter's net earnings, records show.
Stan Lybarger, president and chief executive officer of BOK Financial, has worked for the company since Kaiser joined the board.
"The first year he bought it we made $9 million, and now we make more than that in a month," Lybarger said.
Despite his many business interests outside banking, Kaiser remains involved in the company, Lybarger said.
"He goes to different markets and speaks to groups of our energy clients, and he makes customer calls in many of our markets."
Kaiser first made the Forbes list of richest Americans, with an estimated $265 million net worth, in 1992 - the year after he purchased BOK.
'Dumb luck, guilt'
As his oil and banking businesses flourished, Kaiser made the transition to philanthropist.
Steven Dow, executive director of the Community Action Project of Tulsa County, said that before Kaiser formed his current foundation in 1999, he had a much smaller family foundation.
Kaiser typically called Dow over to the Kaiser-Francis conference room at the end of each year, and the two would go over requests for grants. At that point, Kaiser spent about five hours a year on philanthropy, Dow estimated.
"He would have stacks of solicitations he had received throughout the year. He was just interested in learning everything he could at that stage of his career," he said.
Later, Kaiser began asking for data, bringing in experts and poring over studies to determine which causes best achieved his goal of equalizing opportunity. Today, Kaiser spends about half his time on philanthropy.
The foundation has donated more than $6 million to Educare and has funded three studies to measure the effectiveness of the early childhood education program.
Educare provides education for about 350 at-risk children at two Tulsa sites, with a third under construction. Educare represents the flagship of the foundation's broader effort to fund education for about 2,000 children up to age 3 statewide.
Dow said early childhood education is one of Kaiser's favorite causes because research shows the payoff is huge. Studies have shown that for every $1 invested, society saves up to $17 in later costs such as incarceration and use of social services.
In essays and public appearances, Kaiser has said he feels obligated to give out of "guilt" and "dumb luck" for being born into a caring family and relative privilege.
In a 2009 speech to the Rotary Club of Tulsa, Kaiser discussed the importance of Tulsa and the state vying for federal stimulus funding for local needs.
"There has never been more money shoved out of the government's door in world history and probably never will be again. ... Our selfish, parochial goal is to get as much of it for Tulsa and Oklahoma as we possibly can," he said then.
In 2010, he signed the Giving Pledge, joining more than 70 people - including Bill Gates and Warren Buffet - in pledging to give away at least half of their assets. Tulsan Lynn Schusterman is also on the list.
"America's 'social contract' is equal opportunity ... yet we have failed in achieving that seminal goal," Kaiser wrote in the pledge letter.
Kaiser joined other wealthy Tulsans and companies in forming the Tulsa Community Foundation in 1998. At the time, Tulsa was one of the few major cities without such a foundation.
Initial news accounts state that the Tulsa Community Foundation was formed to provide a safety net for smaller nonprofits and to ensure that donors' interests would be honored after their deaths. Today, it has nearly $160 million in assets and gave about $45 million to organizations in Tulsa and nationwide in 2009, records show.
The year after the Tulsa Community Foundation was formed, Kaiser formed the George Kaiser Family Foundation. It grew from $1 billion in assets in early 2005 to nearly $4 billion at the end of 2009, records show.
Ken Levit, executive director of the George Kaiser Family Foundation, said Kaiser is the sole donor to his foundation and has given about $3.3 billion of his own funds to it. He noted that Kaiser is not on the board but "is a spirited participant" in the foundation's giving.
The foundation is managed by a three-member board: attorney Frederic Dorwart, Phil Lakin Jr. and Phil Frohlich. Lakin is a candidate for Tulsa City Council and is executive director of the Tulsa Community Foundation, while Frohlich is with Prescott Group Capital Management.
Kaiser is "an adviser and an idea creator, but the decisions rest with the board," Levit said.
Records show that about $8 out of every $10 the George Kaiser Family Foundation spent in 2009 stayed in Tulsa.
The largest recipient is the Community Action Project of Tulsa County, which funds early childhood education slots for low-income children up to age 5, job training for their parents, a statewide pilot project for early childhood education and other programs.
The second-largest recipient is the University of Oklahoma Foundation. The OU gift included $50 million to form the OU School of Community Medicine to improve health care in low-income communities.
The foundation has also spent about $50 million on improvements and land purchases to benefit the Arkansas River corridor and plans to spend another $50 million there, Levit said. The foundation has purchased about 55 acres of land along Riverside Drive, where the Blair Estate and Legacy and Sundance apartment complexes now sit.
Planning for the property is in the early stages, and the foundation will seek community feedback, Levit said.
"We are going to create a very wonderful park for the city of Tulsa. I think 2012 is going to be an important year for the river project," he said.
Besides grants to organizations, the foundation has provided low-interest loans for community projects, including the BOK Center and the Oklahoma State University Medical Center, Levit said.
While Kaiser generally accomplishes his philanthropic goals, he has lost on at least one occasion in recent years. He led an effort in 2007 to gather private donations to match public funds for improvements to the Arkansas River corridor, including low-water dams. Voters turned down the $282 million initiative.
While organizations receiving the foundation's support praise Kaiser's philanthropy, some critics have questioned the way the foundation is formed and whether it should be giving away more of its assets.
The George Kaiser Family Foundation was formed under a section of the federal tax law that allows nonprofits to organize as "supporting organizations" of one or more publicly supported organizations. The foundation's federal tax form says it was formed to support the Tulsa Community Foundation, which received $3.1 million from the George Kaiser Family Foundation in 2009, records show.
The arrangement allows such supporting organizations to donate a smaller share of their assets than private foundations. Cash contributions to such organizations can also earn a tax deduction of up to 50 percent of adjusted gross income for the donor, rather than the 30 percent generally earned through gifts to private foundations.
Both foundations are housed at the same address, near 71st Street and Yale Avenue, and share some common management. Lakin is on the George Kaiser Family Foundation's board of directors and is chief executive officer of the Tulsa Community Foundation. Frohlich is on the boards of both organizations, while Levit is a trustee of the Tulsa Community Foundation and executive director of the George Kaiser Family Foundation.
Records show that the George Kaiser Family Foundation donated about 1 percent of its assets in 2009, about $46 million. Levit said that by the end of this year, the figure will be about double the 2009 amount.
According to the IRS website, private foundations are generally required to distribute about 5 percent of their assets each year after expenses. Had it been classified as a private foundation, the George Kaiser Family Foundation would have been required to distribute up to $196 million in 2009.
However, Levit said the foundation's assets are not Kaiser's to withdraw or use. The George Kaiser Family Foundation makes investments in order to earn money for its future grants and to ensure that it continues to exist, he said.
The foundation's $4 billion in assets are not included in the $10 billion Forbes estimate of his fortune.
Levit said the Kaiser Foundation is formed as a supporting organization because "it's here and it can't be taken somewhere else." Such an approach "provides stability to the Tulsa Community Foundation, which appoints the George Kaiser Family Foundation Board."
"It's a great home run for Tulsa, because it's here forever. I basically think of it as inning No. 1. Clearly this is going to be an 80- to 100-year project," Levit said.
Stacy Palmer, editor of the Chronicle of Philanthropy magazine, said the IRS created supporting organizations with university foundations in mind.
"The IRS didn't necessarily expect people to come up with other ways to use it. They are animals that exist that are loosely regulated," Palmer said.
She noted, however, that once funds are donated to a foundation, regardless of how it is organized, the donor cannot later withdraw the funds.
Dow noted that funds in Kaiser's foundation are not under Kaiser's control, although board members certainly want to follow his priorities for charitable giving.
"There's this notion that he may not be giving enough of it away," Dow said. "He's given away 4 billion dollars."
George Bruce Kaiser
Tulsa, to parents Herman and Kate Kaiser
Graduate of Tulsa's Central High School, BA from Harvard (1964) and MBA from Harvard Graduate School of Business Administration (1966)
Myra Block Kaiser
A son, Philip of Tulsa, and two daughters, Leah of Chicago and Emily of Singapore
Forbes richest Americans ranking:
No. 31, with $10 billion in estimated assets
Bank of Oklahoma:
Kaiser purchased the failing Bank of Oklahoma from the FDIC in 1991 for $60 million. He is now chairman of the board and majority shareholder of BOK Financial Corp., parent of Bank of Oklahoma. The publicly traded company holds the largest share of the state's banking market, with $9.2 billion in FDIC-insured deposits and reported net earnings of $69 million last quarter. BOK Financial has 4,500 employees and banks in eight states, and its brokerage subsidiary has services in 10 states.
Kaiser took over operations of the oil and gas company started by his uncle and parents in 1969. Its parent company is GBK Corp. The company buys, sells and develops oil and gas properties in 25 states and Canada. It employs more than 1,000 people, including Cactus Drilling and sponsored oil and gas companies headed by others. Ventures include a partnership with SemGas LP to build the Wyckoff gas storage facility in Steuben County, N.Y., and a 50 percent working interest deal in Bakken Shale, bought for $107 million two years ago. A 2004 Wall Street Journal story said the privately held company generated $600 million in revenues the previous year.
Kaiser invested an estimated $660 million to form Excelerate Energy in 2003. The company uses a fleet of ships to carry liquefied natural gas overseas and regasify the LNG while aboard the tankers. The gas is then piped into pipelines for further distribution. The company presently uses facilities in the United States, Argentina and Kuwait. Kaiser sold a 50 percent share of the company to a German company in 2008 for $500 million, according to its website.
George Kaiser Family Foundation:
Founded in 1999, the foundation is a nonprofit formed as a supporting organization to other nonprofits, including the Tulsa Community Foundation. It listed $3.9 billion in net assets or fund balances at the end of 2009 and made grants to about 200 organizations totaling $46.3 million. Gifts ranged from $15.7 million to Community Action Project of Tulsa County for the third and fourth year of a statewide early childhood education pilot project to $7,000 to the Make A Wish Foundation. Since its inception, the foundation has given $325 million to charities, mostly in Tulsa.
National Energy Policy Institute:
Formed in 2008, the nonprofit National Energy Policy Institute is a joint program of the George Kaiser Family Foundation and the University of Tulsa. Its mission is to develop "sustainable solutions for the energy crisis facing the U.S.," according to its website. Former U.S. Rep. Brad Carson, D-Okla., is director of the institute, and former Alaska Gov. Tony Knowles is its president. The institute published a 186-page economic study last year examining a range of policies to reduce dependence on oil and cut carbon dioxide emissions by 2030. Kaiser is a member of the institute's board.
George Kaiser quotes
"I suppose I arrived at my charitable commitment largely through guilt. I recognized early on, that my good fortune was not due to superior personal character or initiative so much as it was to dumb luck. I was blessed to be born in an advanced society with caring parents. So, I had the advantage of both genetics (winning the 'ovarian lottery') and upbringing."
- July 26, 2010, Giving Pledge letter
"You don't hear very often, 'Please take back your gift.' I think I am the only one speaking here today in opposition to my own financial self-interest."
- Jan. 22, 2009, Oklahoma House Appropriations and Budget Committee hearing on oil and gas tax rebates
"I prefer doing things rather than sitting around talking about doing things."
- Oct. 2, 2006, Arizona Republic
"If America stands for anything, it stands for the principle that all men (originally excluding women and slaves) are created equal or, at least, that they should have an equal opportunity at birth to reach as far as they wish to. Equal opportunity is really the social contract of American life."
- April 28, 2005, speech to Ounce of Prevention conference in Chicago, as reprinted in the New York Times
"If you are doing what everyone else is doing, there is probably not an opportunity there."
- June 11, 1991, The Tulsa Tribune
Top 10 recipients of George Kaiser Family Foundation grants (2006-Sept. 2011)
*in millions of dollars
Source: George Kaiser Family Foundation
|Organization (Primary purpose)||Amount*|
|Community Action Project of Tulsa County (early childhood learning)||$68.4|
|University of Oklahoma Foundation (early childhood scholarships, health care)||$67.7|
|University of Tulsa (energy, the arts)||$9.1|
|Oklahoma State University Foundation (health care, early childhood learning)||$9.1|
|Park Friends Inc. (civic improvements)||$8.1|
|Tulsa Educare Inc. (early childhood learning)||$6.3|
|Tulsa Community College Foundation (early childhood scholarships)||$5.6 |
|Family & Children's Services (early childhood learning)||$4.5 |
|Arkansas River Charitable Project Fund (civic improvements)||$3.8|
|OSU Medical Center Trust (health care)||$3.6 |
World Staff Writers Curtis Killman and Casey Smith and World researcher Hilary Pittman contributed to this story.
Ziva Branstetter 918-581-8306
Original Print Headline: Who is George Kaiser?
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