The successful entrepreneur explains why he focuses his philanthropy on reforming public education and making contemporary art accessible to all.
Civic leader Eli Broad
Tavis Smiley: Good evening from Los Angeles. I’m Tavis Smiley.
Tonight, a conversation with Eli Broad, one of the country’s most influential philanthropists and art patrons. Among his many interests, reforming public education by funding charter schools, a reach that has some in education concerned that money is buying undue influence on how our public schools function.
Far less controversial, though, Broad is also reshaping the cultural landscape right here in Los Angeles. He’s building a new contemporary art museum set to open next year just steps away from Disney Hall with nearly $3 billion dollars in foundation assets. Eli Broad has made a public commitment to giving away 75% of his wealth.
We’re glad you’ve joined us. A conversation with Eli Broad coming up right now.
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Tavis: Eli Broad has the distinction of founding two Fortune 500 companies, KB Home and the insurance company, SunAmerica, Inc. Along the way, he’s amassed a considerable fortune and has focused his philanthropy on reforming public education through charter schools as well as making contemporary art accessible to all.
Next year, the Broad Contemporary Art Museum will open its doors right next to Disney Hall here in downtown Los Angeles and admission will be free, thanks to Eli and Edythe Broad. Eli Broad, an honor, sir, to have you on this program.
Eli Broad: Delighted to be here.
Tavis: Good to have you. I want to start this conversation, if I might, by going into your text that you wrote a few years ago, “The Art of Being Unreasonable.” I want to go to page six here because it really does kind of set the framework for a conversation that we want to make part master class about some of the lessons you’ve learned.
I want to walk through five or six lessons you’ve learned along the way in this brilliant career of yours as an entrepreneur and as a philanthropist and just get you to say a word about each of these. We’ll take our conversation from there, if that’s okay with you.
Broad: It’s fine.
Tavis: So the line is simply this: “The lessons I’ve taken to heart for nearly 60 years in business and philanthropy are ones I still use every day. Number one, ask a lot of questions.”
Broad: I do believe in asking a lot of questions and gaining as much knowledge as one can.
Tavis: Secondly, “Pursue the untried.”
Broad: I believe in start doing things that no one else has tried and always asking why can’t it be done.
Tavis: And that spirit of innovation, that spirit of trying the untried comes from where?
Broad: I think just being entrepreneurial. I’ve always been curious about things, always wanted to see things that others don’t see.
Tavis: Thirdly, “Revise expectations upward.”
Broad: I do. I’ve got high expectations for myself and everyone I work with. So I try to convince people that they can do more than they think they can do.
Tavis: “Take risks.”
Broad: You have to take risks. You can’t be risk averse. If you don’t take risks, you don’t have rewards.
Tavis: What have you learned about how to calculate those risks, though?
Broad: Well, you never want to say “Bet the farm.” You also want to know what happens if it doesn’t work out.
Tavis: “Be restless.”
Broad: I’m never satisfied with the status quo. I always want to make things better, whatever I’m involved in, whether it’s your business, whether it’s K through 12 education reform or whether it’s scientific and medical research.
Tavis: Have you been in situations – I assume you have – where you’ve had to accept that on this particular project, A, B or C, as restless as I am about this, this is the best I can do on this? How do you come to that conclusion?
Broad: Well, you come to conclude you do all you can and there’s not more you can do. You just say that’s the best I can do and hope it all works out.
Tavis: Last lesson, “Seek out the best in your work, the best deal, the best investment, the best people, the best causes, the best art and the best in yourself.” Seek out the best.
Broad: I do believe in seeking out the best, especially in people. And I’ve been very fortunate to have great colleagues that have helped me do all the things I’ve been able to accomplish.
Tavis: Speaking of people, when you are looking to – I’m just curious – when you’re looking to hire somebody, bring somebody on a project, to work with somebody, bring somebody into your operation, what do you look for in people? What kind of questions are you asking in these interviews and conversations?
Broad: I look for someone who’s determined, that has a great work ethic, that his mind is very open or her mind is very open to new ideas, and someone who wants to achieve things.
Tavis: Your confidence in people to deliver for you comes from where?
Broad: It comes from a belief that, if you get the right people and we’re in the right wavelength, they could do a lot more than they think they can do.
Tavis: I would assume – I’ve never had the pleasure of working for you, only talking to you over the years. What’s it like working for Eli Broad? You a hard taskmaster? I can only assume a guy like you has got to be pretty demanding.
Broad: I am demanding, but I’m demanding of myself first, so I set example. I work all the time. I enjoy working. I enjoy making a difference. Take work home every evening. And I like to lead by example.
Tavis: You’re an only child.
Broad: I am an only child.
Tavis: How did all of this come out of an only child?
Broad: Well, I’m not sure. I came from a lower middle class family always…
Tavis: Born in the Bronx.
Broad: I was born in the Bronx, moved to…
Tavis: Raised in…
Broad: Raised in Detroit.
Tavis: Detroit, yeah.
Broad: And went to Michigan State University.
Tavis: Big Ten.
Broad: Big Ten.
Tavis: I went to IU. I won’t hold that against you, though [laugh]. I like the Spartans. They’re all right.
Broad: And always wanted to achieve things, whether it was in business – I had four careers. First was in public accounting. I was a young CPA. Then I started a home-building company, KB Home, formerly Kaufman and Broad, and then SunAmerica for retirement savings. And then 14 years ago, I became a full-time philanthropist.
Tavis: I’m going to come to all that in just a second.
Tavis: Let me back up just for a second, though, because I’ve said many times on this program and I believe this, that we are who we are because somebody loved us. We are who we are because somebody loved us and I assume, for you, that must have started with your parents. Tell me about your mom and dad.
Broad: My dad was very gregarious. He was a fun-loving guy. My mother was very serious and she had a great influence on me. She was more intellectual too.
Tavis: What’d your parents do for a living?
Broad: Well, my mother started out as a dressmaker. My father started out as a house painter and became a merchant in Detroit.
Tavis: How does a guy who starts with such humble beginnings dream such a big world for himself?
Broad: Well, I didn’t start dreaming – it’s a step at a time, step out of time. And whenever I’d reach a goal, I’d say where do I go from here? I’d never be satisfied with whatever I’ve done. I’m always looking to do more and do it better.
Tavis: So you mentioned that for the last 14 years, you have been a full-time philanthropist. Tell me how you made that decision, number one, to be a full-time philanthropist and what you hoped you would achieve 14 years ago taking on that assignment.
Broad: Well, we’re very fortunate. We sold our company 14 years ago, 15 years ago, for $18 billion dollars and that gave us a fair amount of money. And I said I’ll work for two more years and then I want to give back. I said what’s the biggest problem facing America? And I concluded it was K through 12 education.
I saw what was happening in China, India, Japan, Korea, certain northern European nations and I said we’ve got to improve our public education system. In fact, I always believed it was the really civil rights issue of our times.
Tavis: I think a lot of people agree with you that is the civil rights issue of our time. And yet, you’re a big boy, so you can handle this. It is a civil rights issue of our time, many of us believe, but I’m starting to read more and more critique and not a kind critique of people like billionaires, like you and Bill Gates, as you well know, people who think that you guys may be well-intentioned.
But you guys are getting in the way and that you’re causing the problem and going about it the wrong way. Your solutions are slightly off. Charter schools are not the answer. I mean, I could do this all night. You’ve heard these critiques all the time.
So here we are on public television. What’s your response to people who think that people like you and Gates, again, though well-intentioned, are causing the problem here?
Broad: We look at a system where America used to be number one in graduation rates. We’re tenth. We used to be high up in math and science and so on. We’re now 18th, 25th or 30th. So the system we have is not working. So you got to find solutions outside our current system, whether charter schools, whether it’s doing other things.
Tavis: Why do think, though, that charter schools are the answers? Why…
Broad: They’re not the only answer. There are very good charter schools and some poor charter schools. But the best charter schools like KIPP Academy which has 58 schools, which just won last week the Broad Prize for charter schools, does a magnificent job. 90% of those kids go to college.
Tavis: But how does the KIPP school model – it might work well for those kids, but how does that solve the larger problem of public education that the majority of our kids are stuck in?
Broad: I would hope that traditional public schools will learn from public charter schools and adapt their best practices.
Tavis: What do they need to learn? What are they not getting right?
Broad: I think we need a longer school day, a longer school year which good charter schools have. I think we’ve got to use more technology and have blended learning, the best of teachers and the best of technology.
Tavis: You gave a pretty sizable contribution some years ago, about $100 million dollars, as I recall, to Teach for America. You recall writing that check?
Broad: I do [laugh].
Tavis: I know you write some pretty big checks. You wrote a $100 million dollar check to Teach for America years ago. Teach for America was, back in the day, still in the minds of some, regarded for the work it’s done with regard to trying to put teachers in difficult settings in inner cities. What do you make now of having written that check for $100 million dollars?
Broad: I feel we’re (inaudible) at Teach for America. Their staff has been incredible getting the best and brightest people out of the best schools in America to commit themselves to teaching for at least two years, and many of them stay on a lot longer. A lot of them start charter schools who do other things in education. These are people that otherwise would not have gone into teaching.
Tavis: If the public education crisis is more than just about money, what is that more?
Broad: It’s about a willingness to change, a willingness to do things better, a willingness to recognize that for us to have a great standard of living, to be competitive in the world, we’ve got to do a far better job educating our children. We want all children to go to college, but all children are not going to college.
So we want to stop people from dropping out after eighth or ninth year. And the way to do that is to show them a route to a good paying job rather than saying, “No point staying in school ’cause I don’t what it’s going to do for me.”
Tavis: What do you make of – I’m going to ask a question specifically we’re seeing around the country, around the world, for that matter. But specifically here in California, it used to be that our education system was top flight and that I think it still is the case that what happens in California politics either casts a long shadow or a long sunbeam across the country.
And for years, vis-à-vis the issue of education, we cast a long sunbeam and the numbers are abundantly clear we aren’t where we used to be. But this is where you’ve made your home all these years later. Just say a brief word to me about the state of education in this state, again, that used to be tops in the nation.
Broad: Well, we’re far from tops in the nation now. Massachusetts and now some other states are tops. And the problem we have is we’ve got a status quo by a lot of adult interests that don’t want to change and they’re very influential in our legislature and so on.
As you probably know, we recently had a lawsuit called the Vergara lawsuit that ruled that giving tenure after 18 months doesn’t make sense. We need a longer period than that. Seniority is the only basis for laying off teachers doesn’t make sense. So we’re going to see a lot of changes and it may happen through the courts not only in California, but across America.
Tavis: So you’re pressing it, maybe even prophetic because that’s where I was going. I figured I’d ease my way into this court decision by starting about asking you about California education and work my way up to this court decision.
Because that court decision you just referenced was a clarion call. That bell was heard all across the country and teachers unions, I know, shuddered and started stuttering, quite frankly, when that decision came down. I take it from your comment now that you support that decision.
Broad: I did support the decision, supported that lawsuit, and there’s a new lawsuit now in the State of New York also, a similar lawsuit. There’ll be many more.
Tavis: How do you respond to teachers watching right now who say, “There goes Eli Broad again blaming teachers” as if teachers are the problem with what’s wrong with public education?
Broad: I don’t blame teachers, I don’t blame teachers.
Tavis: But that decision was seen as a slap against teachers.
Broad: No, it was more a slap against the establishments, the teachers unions and practices that no longer made sense. I believe, if you have tenure, it ought to be earned like at a university, over five years or so.
Tavis: So 18 months is just too short a time.
Broad: Too short a time. And then when it comes to laying off teachers, we ought to keep the best teachers regardless of seniority.
Tavis: What role do you think teachers writ large – this is an impossible question, but I’ll ask anyway ’cause one size doesn’t fit all. But generally speaking, broadly speaking, what role do you think teachers and teachers unions are playing in this crisis right now?
Broad: I think teachers are the most important element in public education. And oftentimes, young teachers are now in line with the teachers unions. Teachers unions seem to be more interested in your older members and protecting those that are, frankly, on occasion haven’t done as well as they should.
Tavis: We live, as you well know, not just in this state, but in this country, we live in the most multicultural, multiracial, multiethnic America ever. And in this state and across the country, so many of these children of color don’t have teachers that look like them.
I wonder if, with your work in these urban programs, whether or not that’s something that the Broad Foundation has thought about, considered, thinks is important that most of these kids are being taught by white female teachers and they don’t ever get a chance to see anybody who looks like them in the classroom.
Broad: Well, that’s partially true, but we try to change that, for example, in Michigan. I went to Detroit public schools and we created a program in Michigan State University, the brightest kids out of Detroit public high schools and make them teachers. So we need more color in the classroom than we currently have. But we also need the brightest people of color.
Tavis: How would you grade the Obama administration six years in on their education reform?
Broad: I give them very high grades.
Tavis: You would?
Broad: I think the president is doing all the right things. I think Secretary Arne Duncan is doing all the right things, and I think…
Tavis: That’s a strong endorsement, Mr. Broad. All the right things?
Broad: Most all the right things, absolutely.
Tavis: So what do you like about this Race to the Top thing?
Broad: I like Race to the Top because…
Tavis: What do you like about it?
Broad: It caused 30-some odd states to change their laws dealing with all sorts of things. I like the push for a Common Core which is not a federal program. It started with 45 governors and state education officials. We need a longer school day, a longer school year. We need better training of teachers. There’s a lot to do.
Tavis: How much of the problem in American education has to do with the fact that we have, back to the Race to the Top – my sense is, with all due respect, I think education is a right and not a race. I don’t like the way we make this thing – education is a right for children, not a race.
I don’t like this sort of competitive thing. That’s my issue with the Obama model. I don’t like it, but that’s me and that’s not you. But I think the question is how much of the problem in American education do you think has to do with the fact that there are 50 different states and 50 different ways of doing it?
Broad: I think that’s a problem. That’s why we have the Common Core which, again, was endorsed by 45 governors and state officials. You can’t have a different curriculum in Massachusetts and Montana or the State of Washington. We’re one nation.
Tavis: Some think that privatization of education is the answer and not the problem.
Broad: I don’t think it is the answer. I don’t believe in privatization. Charters schools are public schools. I believe in competition. I believe in parent choice.
Tavis: What makes you hopeful? I mean, obviously, the kind of resources and the kind of time and treasure that you’re putting into this suggests that you believe that your efforts are making a difference. It’s obviously the work of your life at this point. What makes you hopeful about your efforts on education?
Broad: I think people are beginning to wake up that we’ve got to do something about our education system. That is, in getting the country to where it needs to be, that we’re not being competitive, that we’re leaving a lot of young children behind. And I think there’s starting to be realization that things have to change and they’re starting to change slower than I’d like.
Tavis: Let me shift. My time is running and I could talk to you for hours just about education. But the other aspect of your life that I referenced earlier that we are fortunate, I think, here in the greater Los Angeles area to be the beneficiaries of is your philanthropy where art is concerned. How did you become such an art lover?
Broad: My wife was the first collector. I’ve always been curious about things and, before I got involved in art, I was involved in higher education. I was a senior university board. I was the chairman of one of the Claremont Colleges.
But out of curiosity, I said life would be boring if I spent all my time with other business people, bankers and lawyers. So I started meeting artists and became fascinated because their view of society is very different than that of business people and lawyers.
Tavis: So we are now celebrating 10 years of Disney Hall. When you look back 10 years later on the efforts that you were involved in to help bring us Disney Hall, Dudamel now going on his sixth season as conductor, what do you make of that anniversary 10 years later?
Broad: I feel very good about it. I think Disney Hall has been a great success, a great asset for the city of Los Angeles, really a crown jewel. I can think of no city that’s got a better symphony hall or better symphony than we do.
Tavis: And tell me more about this Broad Museum that is scheduled to open in 2015 in downtown.
Broad: Right next door to Walt Disney Concert Hall. It’ll be a great piece of architecture. As you mention, it’ll have free admission and, hopefully, it’ll have great attendance.
Tavis: Why is the free admission so important to you?
Broad: I think we want to serve the broadest possible public we can. And we know with free admission, we’ll get probably twice the attendance we would get if we charged admission.
Tavis: You’ve been at the center and you have even persons who disagree with you on certain issues. I don’t think anybody in this town who is being fair would not give you your props, the respect that you deserve, for being at the epicenter of helping to usher Los Angeles into a cultural renaissance.
Let me ask you to set your modesty aside for just a second and tell me how you feel about, again, being one of the major players that’s really starting to make this city a cultural, artistic destination.
Broad: I love this city. It’s a real meritocracy. This city has permitted me to do things I couldn’t do in other cities or other countries, and I want to give back. So I’m very happy to devote my time, energy and resources to make this a great city, especially having a vibrant center in downtown Los Angeles which we’re finally starting to have.
Look at Grand Avenue between the Arts High School, between the new cathedral, Walt Disney Concert Hall, the other venues and music center, MOCA, our museum, it’s exciting. And the Grand Park, of course, where we have a place, whether it’s Fourth of July, New Year’s Eve, where people from all parts of the city could come and celebrate together.
Tavis: Let me circle back in the minute and half I have left. Let me circle back to this master class where our conversation began about lessons you’ve learned along the way. We all have our detractors; we all have our haters, people who disagree with us.
What have you learned about yourself and how you best manage situations and circumstances even in the public eye where people sometimes violently disagree with you?
Broad: Well, if I truly believe what I’m doing is the right thing, I’ve got thick skin. I’m not going to – I do what I think is right. I do it with passion and a belief and it’s not for personal profit or anything like that. It’s for the public good.
Tavis: How have you been able to find that line between doing that with love and humility versus arrogance and narcissism?
Broad: I try not to be arrogant. I try to be as humble as I can, but I want to be forceful and make sure that my things I want to get accomplished do get accomplished with others.
Tavis: I’m honored to have you on the program. This book has been out for a little while, but it’s worth reading and rereading every now and then if you want to learn some good lessons with a foreword by some guy named Michael Bloomberg [laugh].
The book is called “The Art of Being Unreasonable: Lessons in Unconventional Thinking” written by the one and only philanthropist Eli Broad. Mr. Broad, an honor to have you on this program. I enjoyed the conversation immensely.
Broad: Pleased to be here.
Tavis: Glad to have you.
Broad: Thank you.
Tavis: That’s our show for tonight. Thanks for watching and, as always, keep the faith.
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