Inside Wealth: Philanthropy

Charles Koch: Billionaire, conservative lightning rod and ’angel investor’ for colleges

Charles Koch with Johnny Taylor, CEO of the Thurgood Marshall College Fund (TMCF)
Source: Thurgood Marshall College Fund

Depending on who you ask, the name Charles Koch means different things to different people, and can trigger a wide array of responses.

For decades, the billionaire who runs an expansive conservative donor network has been a lightning rod for controversy. Koch has become a scourge of political liberalism, his name invoked as an epithet among left-leaning politicians and advocacy groups—even as he declined to support President Donald Trump at the height of the general election last year.

For those reasons, the announcement on January 11 that Koch's charitable foundation would donate $26 million to the Thurgood Marshall College Fund came as a surprise to some, and drew its share of controversy. It was reminiscent of a stir he created in 2014, when he donated $25 million to the United Negro College Fund, which has gone on to award more than 170 scholarships in Koch's name.

The gift to TMCF—named after the first black U.S. Supreme Court Justice—is a five year gift that provides undergraduate scholarships, graduate fellowships, and funds to faculty members involved in social sciences.

According to TMCF's CEO Johnny Taylor, Koch's involvement was largely the organization's idea, the outgrowth of hearing Koch's remark publicly on mass incarceration and over criminalization of certain offenses, which tend to affect minority communities overwhelmingly.

TMCF "reached out to them, and I never thought about there would be controversy about the source of the income because I was content that the subject matter…[was] what mattered," Taylor explained to CNBC in a recent interview.

He likened the Koch Foundation to "angel investors" and the donation "seed money" that would help stoke debate about expanding educational and socioeconomic opportunity in minority communities.

"America is graying and browning," Taylor added, speaking about the growing share of ethnic minorities in a U.S. population that's getting older. Koch is "an American and he wants America to be great. We have to figure out barriers and obstacles to success, it's why we need to figure this stuff," said Taylor.

If someone comes to me and asks what I think aboutCharles Koch, I am prepared to tell them, 'This is the man I know.'
Johnny C. Taylor
CEO, Thurgood Marshall College Fund

In 2015 alone, the Koch Foundation handed out $44 million to bolster higher education—something Koch said "changed his life"—and free markets.

For decades, the billionaire has lavished his philanthropic largesse across hundreds of diverse—and decidedly liberal—colleges and universities across the country such as Harvard University, University of Chicago and a number of historically black colleges and universities.

"What a lot of folks don't know is that Charles Koch has been supporting education for half a century," John Hardin, director of university relations at Koch Foundation, told CNBC in an interview. "It's a very big part of his life."

Hardin stated that the foundation's ultimate goal is to continue support for the center "for decades," joking that he hopes they come back and ask for more funding. "That means what they're doing is successful and having an impact."

Charles Koch flanked by Thurgood Marshall College Fund students.
Source: Thurgood Marshall College Fund

Still, Koch's moves have left at least a few of his foes wondering if his donations are really the fruit of charity, or borne from a more politically motivated purpose.

His implacable left-leaning critics argue his money that comes with ideological strings attached, and are part of an effort to evangelize about a right-leaning agenda. One advocacy group called UnKoch MyCampus,insists that Koch's funding efforts are being leveraged for political gain.

It's also an argument Taylor roundly dismissed. He told CNBCthat he "didn't get a lot of pushback" internally when he broached the idea ofapproaching Koch for a donation. The response from his peers and colleagues tothe gift has been "overwhelmingly positive," he added.

Taylor was impressed by Koch willingness to fly personally tothe TMCF's headquarters in Washington, D.C, where he submitted himself toquestions from the board and some of the students in the scholarship program.

"There are major foundation leaders that won't show up or talk," the CEO said. "If someone comes to me and asks what I think about Charles Koch, I am prepared to tell them, 'This is the man I know.'"