Mr. Unreasonable

Eli Broad on medical research; modern art; K 12 education; and his new book, The Art of Being Unreasonable

Eli Broad is unreasonable. It’s a word others use to describe his high expectations—and the energy with which he pursues them. It’s a word he uses to describe his life, his work, and even his charitable giving.

Broad was born in the Bronx and raised in Detroit, the only child of hardworking Jewish immigrants from Lithuania. Though he was not diagnosed for many years, he suffered from dyslexia. Numbers, unlike words, made intuitive sense to him. Broad majored in accounting at Michigan State University, and in 1954 became the youngest CPA in the state’s history—a record that stood until 2010. He worked as an accountant for a few years, but saw better opportunities elsewhere.

In 1956, Broad entered the homebuilding business. By imagining himself as a manufacturer of houses rather than an investor in real estate, he slashed costs and passed the savings on to consumers. Consistently impressive growth made KB Home the first homebuilder ever listed on the New York Stock Exchange. In 1971, he acquired a life insurance company. Within a few years, he reconceived the business, focusing on retirement investment vehicles and renaming it SunAmerica. In the process, Broad became the only person to build, from scratch, two separate Fortune 500 companies.

Broad now dedicates his time entirely to philanthropy. The Broad Foundations work in four principal areas: advancing scientific and medical research, fostering appreciation for contemporary art, reinvigorating downtown Los Angeles, and reforming K–12 public education.

Philanthropy spoke with Mr. Broad in his offices on Wilshire Boulevard in Los Angeles.

PHILANTHROPY: You call yourself unreasonable. Why?

MR. BROAD: That’s correct. I am unreasonable. I’m unreasonable because I believe that, if you want to make the most of your time in life, you must be unreasonable. It’s the only way to move forward, to make progress. Almost 60 years ago, my wife, Edye, gave me a gift that I still look at every day. It’s a paperweight with an inscription from George Bernard Shaw: “The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

The art of being unreasonable is the art of demanding and getting the very best out of people. It’s the art of seeing the things that need to change, of seeing the institutions that need to be built, and of proposing the things that need to be done. It’s the art of asking hard questions, of demanding to know why or why not. It’s the art of working with a passion and not being concerned about pushback from people who are unwilling to move forward.

PHILANTHROPY: What’s the most unreasonable thing you’re hoping to achieve with your philanthropy?

MR. BROAD: Reforming public education in this country. Given the scale of the problem, and given the resistance to meaningful reform, the mission would strike most anybody as unreasonable.

When I start a new project, I begin by doing as much research as I possibly can. Now, when we started working in education, I wanted to learn everything I could. I set up meetings all around the country. And what I found was that there were plenty of experts who knew all the reasons you couldn’t change anything. I would research a problem and arrive at a conclusion. I’d say, “We’ve got to get better management” or “We need better governance.” The answer, invariably, was, “You can’t do that.”

I don’t accept that answer. I thought it was entirely possible to get better upper management in school districts—difficult, yes, but not impossible. So I created the Broad Residency. We train accomplished leaders for high-level managerial positions in various school districts, charter management organizations, and departments of education. That’s just one example. The point is this: although we’ve made real progress, we’ve also received a lot of pushback. I take that as a sign that we’re being unreasonable.

PHILANTHROPY: You dedicate your philanthropy to four basic causes: advancing medical research, promoting contemporary art, reinvigorating downtown Los Angeles, and reforming public education. As a back-of-the-envelope guess, how much of your time and how much of your funding do you dedicate to each of those four areas?

MR. BROAD: Let me start by saying that I’m working harder now than I did when I was building my two Fortune 500 companies. Without a doubt, I spend the most time on K–12 education. It’s constant pushback from people who don’t want to see any change. That’s where I spend most of my time and energy.

At the other end of the spectrum, my work in medical research takes very little time and energy, but it receives the most funding. We’ve got a great board, staff, and administration at the Broad Institute. These days, my wife and I will attend two or three meetings per year, and that’s about it.

PHILANTHROPY: Could you tell me more about the Broad Institute?

MR. BROAD: It’s the world’s leading genomics research institution, with a $280 million research budget and nearly 2,000 scientists and staff. Our goal is to take what we’ve learned about the human genome and use it to benefit clinical medicine—and to make genomic knowledge freely available to scientists around the world.

My involvement began with David Baltimore, whom I met at Cal Tech when he was president and I was on the board. David is brilliant; he won a Nobel Prize in medicine when he was 37 years old. Better yet, he can explain the science to anyone, whether it’s to a fellow Nobel laureate or to a layperson like myself.

At some point, David said to me, “There’s a young man named Eric Lander who is decoding the human genome. His research has implications for the treatment of Crohn’s disease. Why don’t you give him a grant?” David knew I have a son with Crohn’s, and that I was supporting research into the disease. Not long afterward, Edye and I found ourselves in Cambridge. I had talked to Eric on the phone but never met him. So I called him and said, “We’d like to see your lab.”

PHILANTHROPY: I take it he made quite an impression on you.

MR. BROAD: I don’t know what we were expecting, but we were completely blown away. It was constant motion—140,000 square feet of computers, robots, and scientists working around the clock. We were there on a Saturday, and the place was packed with young people from Harvard. They were all so excited that nobody wanted to go home.

“Eric,” I said, “when are you going to be done? When will you finish decoding the genome?” He knew the answer, down to the month: “April 2003.” Then I asked him, “What do you want to do next?” He said, “I want to take everything we’ve learned and start finding clinical applications.” So I asked him, “What do you need?” He told me, “$800 million.” I said, “I hope you get it.”

PHILANTHROPY: You turned him down?

MR. BROAD: Initially, yes. But we stayed in touch. I followed his progress. There were people who could’ve given him the money, but it never quite came together. Finally I decided to step in. “I’ll tell you what,” I told him, “we will give you $100 million over ten years if MIT and Harvard will join us as equal partners in this project.” He was skeptical. He told me that MIT and Harvard have never partnered on anything of this scale before.

I thought it was a good deal for everyone. So around 2003, I arranged a meeting at the Harvard Faculty Club. My wife and I were joined by Eric, of course, and my friend, Larry Summers, who was then the president of Harvard, and Chuck Vest, who was then the president of MIT. I proposed the idea: Edye and I would put up the first $100 million, and then both Harvard and MIT would each be responsible for $100 million. MIT was immediately on board. When we got to Larry, he said, “Harvard doesn’t have the money.”

Eric is a very smart guy, and before the meeting, he told me, “Cut a deal with MIT, because there’s no way Harvard’s going to walk away from this offer.” Once it looked like we would leave out Harvard, Larry managed to find the money pretty quickly.


Broad Stem Cell Center at the University of Southern California

PHILANTHROPY: What’s the most important thing you bring to the table when you fund scientific research?

MR. BROAD: I came up with the idea for the Broad Institute with Eric Lander. I occasionally offer advice on finance and strategic planning. Almost everything else I leave up to them. Edye and I have committed a total of $600 million.

PHILANTHROPY: Have you fully funded that $600 million commitment?

MR. BROAD: Not yet. So far, we’ve paid about $350 million. As for the rest, we’ll pay it over a number of years.

PHILANTHROPY: I take it the Broad Institute is the largest component of your charitable giving?

MR. BROAD: Oh, yes. By far. I find the entire enterprise fascinating. We get clips from medical and scientific journals every day, and every day there are new reports about the Broad Institute’s research. When we’re around the folks at the Broad Institute, I’m sure I have the lowest IQ in the room.

PHILANTHROPY: Is Edye the impetus behind giving to the Broad Institute?

MR. BROAD: If it were up to her, she would give Eric all our money. She’s sold on it. I’m sold on it, too, but not to the extent of giving them all our money.

PHILANTHROPY: You both love modern art.

MR. BROAD: Yes. We started collecting years and years ago. The first significant artwork we ever bought was a drawing by [Vincent] van Gogh. It was lovely—a sketch of two thatched huts. But after a few years, I found it a little boring. Around the same time, I was discovering how much I enjoy contemporary art, how it challenges me and makes me think. So I traded the van Gogh for a [Robert] Rauschenberg and never looked back.

By the early 1980s, we realized our home was just about out of wall space, but we wanted to continue collecting. So we created the Broad Art Foundation, which was intended to serve as a lending library of contemporary art for museums around the world. So far, it’s worked pretty well. We’ve loaned about 8,000 pieces to some 500 different institutions.

PHILANTHROPY: You’ve also gone to great lengths to make Los Angeles a global leader in modern art.

MR. BROAD: True. It started more than 30 years ago. In the mid-1970s, Los Angeles was one of the few large cities in America without a contemporary art museum. It was crazy—one of the most creative, energetic cities on earth, and it had no real home for contemporary art. In 1979, I went to Mayor Tom Bradley and made a deal. You see, at that time, developers had to dedicate something like 1 percent of their construction costs to public art—it almost always went to some lousy bit of sculpture in the lobby. I convinced Mayor Bradley to repurpose those funds, to aggregate them toward a new museum. He agreed, on one condition: that we raise at least $10 million in private donations—and back then, that was a much more intimidating sum of money than it is today. Eventually we raised $13 million from 600 founders. That got the Museum of Contemporary Art off the ground.

PHILANTHROPY: And now you’re building another museum for contemporary art.

MR. BROAD: Yes. We’re building a new public museum that will be a permanent home for our collection. It will continue to lend out pieces, but this will be the headquarters, if you will. It’s being built now—about 120,000 square feet total, with 50,000 square feet of gallery space—and we expect it to open early in 2014. I love the design. It’s very functional, giving us plenty of storage for pieces not on loan or display, but it’s also a striking and architecturally significant building.

PHILANTHROPY: You decided to put both MOCA and the Broad Museum in downtown Los Angeles. In fact, they’re practically across the street from each other. That can’t be an accident.

MR. BROAD: Ever since we moved here in 1963, I’ve heard all about how Los Angeles doesn’t have a downtown. It’s been a longtime goal of mine to reinvigorate the heart of the city. That’s why I’ve put so much time and energy into building up an arts corridor along Grand Avenue.

One important step was finishing the Walt Disney Concert Hall. Lillian Disney, Walt Disney’s widow, launched the project with a $50 million donation. Frank Gehry was recruited to draw up plans. Construction began on the underground parking garage in 1992. The county spent about $110 million on it. A few years went by, the project ran out of money, and all they had was a concrete deck at ground level. Everyone said forget it, it can’t be built, you can’t raise the money. Well, I got together with Dick Riordan. Dick is a close friend and was at that time mayor. We decided to raise the money to make it happen.

It opened in 2003. Now, of course, everyone sees it as one of the city’s signature works of architecture. But that’s another example of how, at the end of the day, everyone loves what was once an unreasonable idea. When it’s all finished, everyone will want to take credit for it. But at the beginning, nobody stepped forward with any energy, resources, or vision.

PHILANTHROPY: Any other plans for downtown?

MR. BROAD: While we were working on getting the concert hall underway, we took another step. We looked at the land along Grand Avenue and realized that some of it was owned by the city and some by the county. And we knew that they don’t usually work well together. “They’re going to parcel this out without any kind of master plan,” I thought to myself. “Who knows how it will end up?”

So I helped form something called the Grand Avenue Committee, a public-private partnership composed of civic leaders, developers, [Roger] Cardinal Mahony, and so forth. They were charged with coming up with an overarching vision, a plan for the nine-acre site that both the city and the county could sign off on. There was a lot of political resistance. The mayor at the time was unenthusiastic. City councilpersons didn’t want to deal with their counterparts on the county board of supervisors. It was a mess. But we kept at it until we finally convinced everyone. That’s worked out very well.

PHILANTHROPY: Which has been more challenging: working to reinvigorate downtown L.A. or working to fix American public education?

MR. BROAD: Our most challenging mission, by far, is to dramatically improve K–12 education in America. It would also be the most rewarding if we got there.

PHILANTHROPY: What do you define as getting there? What’s your vision for successful K–12 reform?

MR. BROAD: That’s a big question. For starters, we need better governance. School boards are made up of political wannabes, people who see it as stepping stone to the city council or the state assembly. That is obviously not a strategy for effective governance. And we have 15,000 school boards! If we had 15,000 militias without some sort of national command, where would we be? That’s what we’re doing with education.


Broad with students at Harlem Success Academy

PHILANTHROPY: So the solution is greater consolidation and centralization?

MR. BROAD: Absolutely. If it were up to me, I’d like to see a far greater federal role in public education. Barring that, I’d turn to governors and big city mayors. It’s incredible—you’ve got school boards in California that don’t have any schools. Lou Gerstner floated a good idea in the Wall Street Journal a few years ago. He proposed abolishing all but 70 of America’s 15,000 school districts—he recommended keeping one for each state, plus one for each of the 20 largest cities.

PHILANTHROPY: Is local autonomy the problem? It’s been a characteristic of American public education for centuries—including when our schools were considered the best in the world. You could even say that localism is an advantage, that it creates flexibility, encourages competition, and allows a diversity of different approaches.

MR. BROAD: Well, there are a lot of differences between now and then. One, you used to have a captive labor force—women weren’t going to medical school or getting MBAs. Two, back then you didn’t have collective bargaining agreements with 400 pages of work rules. Three, the world is a different place. We no longer have one state competing against another state. Now, we’re competing against China, Finland, Singapore, Japan, and Korea.

PHILANTHROPY: What else can donors do to improve K–12 public education?

MR. BROAD: Lots of things. We need better teachers. Other countries draw their teachers from the top third of their college graduates. Here, teachers are drawn from the bottom third. Our teacher training has to improve. If it were up to me, I’d get rid of all the education schools in America. Every teacher would major in an academic discipline—math, English, science, what have you—and only after they had mastered the discipline could they go into teaching. Only then would I give them instruction in pedagogy and practical training. We do the opposite of that. That has to change.

We need a longer school year. Our kids get about 720 academic hours annually. Other countries have twice what we have—and then they double that with a second shift called homework. We have video games, the internet, and TV.

PHILANTHROPY: Do you see a constructive role for new technology?

MR. BROAD: Of course. This is the 21st century, and we’re not using technology very intelligently at all. We’ve got to start taking advantage of blended learning by using technology more effectively in classrooms. Rocketship Education in Northern California is a good model for blended learning. The Alliance for College-Ready Public Schools here in Los Angeles can point to a few schools with 45 students and one teacher in a classroom. Because they’re using computers for a lot of instruction, the teacher can actually give more one-on-one time to struggling students. Frankly, it would be fine with me to get rid of textbooks—Korea is going to eliminate all textbooks by 2014. Everything will be digital. We’ve got to do that.

PHILANTHROPY: What needs to be the first priority?

MR. BROAD: Leadership. We need intelligent, bold leadership to make changes on this scale. Fortunately, I think we’re getting to that point. President Obama wants to see change, Secretary [of Education Arne] Duncan wants to see change. So do many governors and a large number of mayors—Menino in Boston, Bloomberg in New York, Daley and Emanuel in Chicago. They all want to see positive change. And when they get involved, they fight hard, and they don’t mind some pushback, and they’ve got the political will to make things happen.

PHILANTHROPY: You put the Broad family name on the things you fund—and you do so as a point of principle.

MR. BROAD: Why do I put my name on these things? I guess there’s an element of ego satisfaction. But I also want to set an example for others, so that others will want to follow suit and have their name on high-performing nonprofits. Some very good people commit themselves to keeping their philanthropy a secret, but that’s not for me. The things we’re doing are new and different. If they work, I’ll take credit—and if they don’t, I’ll take the blame.

PHILANTHROPY: Have you ever funded something that you think turned out to be a failure?

MR. BROAD: When we started in education, there was an organization called TURN—Teacher Union Reform Network—run by a guy named Adam Urbanski from Rochester, New York. I come from a union family and I’m a lifelong Democrat, so the concept was very appealing. We gave them money and worked with them. Frankly, we never saw anything come of it. It was a disappointment.

We also had the idea that the teachers’ unions ought to try running charter schools. So, we funded two charters—one in New York and the other Brooklyn—to be run by the United Federation of Teachers. Neither school is performing particularly well. I’m sure I’ve made more mistakes, but I don’t have them at my fingertips.

PHILANTHROPY: Looking forward, say, a century from now, what do you think Eli Broad will be remembered for?

MR. BROAD: If I had to guess right now, I would say that the Broad Institute has the most potential. It’s doing amazing work in genomics, with the potential to revolutionize medicine. But I would love to believe that we’ll be remembered for our education reform efforts 100 years from now.

Do you know Abraham Flexner? About a century ago, he almost single-handedly changed medical education in America. I’m sure he was called unreasonable by people who thought things were about as good as they could be. Well, I want to be the Flexner for reforming American public education. That doesn’t seem too unreasonable.