Eli Broad was pushy, demanding and at times exasperating. He would be the first to admit it, preferring to refer to him himself simply as "unreasonable." But he got things done. Big things.
Broad started by co-creating his homebuilding company. Later he lent his talents to education reform and overseeing the rise of some of Los Angeles' most important institutions. Above all, Broad (1933-2021) left behind a legacy that continues today.
He rose from the hard-working, dyslexic only child of Jewish immigrants from Lithuania to become a billionaire homebuilder and philanthropist. He gave away much of his fortune with a penchant for personal involvement in philanthropic projects close to his heart.
Leave A Legacy Like Eli Broad
Now, more than a year after his death at age 87, Broad's influence is still felt on many fronts. He most visibly made a mark with the innovative art museum he built in downtown Los Angeles that carries his name.
"Eli Broad was clearly an influential figure in his chosen pursuits as an art patron, philanthropist and motivator of civic consensus in Los Angeles," said Kevin Roderick. Roderick is a longtime journalist and author of books on Wilshire Boulevard, one of the city's best known grand thoroughfares, and the San Fernando Valley. "His step away from public life before his death left a leadership void in the wealthier circles of L.A. life, one that continues to matter in the city," he said.
Broad crossed swords with the powerful along his path — almost gleeful at the prospect of ruffling feathers — in the drive for major accomplishments. Yet his upbringing could not have been more humble.
Do Your Homework Like Eli Broad
Broad — pronounced "brohde" — grew up in the South Bronx. He was the child of a house painter and a seamstress. Broad majored in accounting and economics at Michigan State University. He moonlighted to pay his college expenses. After he graduated, he said in his official biography, he was the youngest person to pass Michigan's certified public accountant exam.
Business called out to him soon after graduation. He went on to co-found Kaufman and Broad Home Corp., later KB Home. KB Home was one of the first publicly traded homebuilders on the New York Stock Exchange. Broad credited preparation for his early success.
"Research — and using what you learn from it to analyze every situation — is what separates being unreasonable from being irrational," he wrote In his autobiography, "The Art of Being Unreasonable."
Treat Impatience As A Virtue
Living a life of such high demands on myriad fronts, Broad hated wasting time. He was a young man in a hurry. And he remained that way even as he became an old man. When he took his wife to the movies and encountered a long line for tickets, he turned around and left. He liked to the tell the story of how he hired the famed architect Frank Gehry to design his home. But he also soon fired him when he deemed construction to be taking too long.
He found golf tedious and needlessly time consuming. He preferred to hobnob with clients over meals. At all hours, work was never far from his mind.
Eli Broad: Hire People You Can Trust
Broad extended his efforts by making smart hires. He found people he could trust to carry out his vision. Broad often pushed them into assignments that forced them to learn something new. As a leader, Broad put people outside their comfort zones.
He set big goals and challenged his staff to meet them. Once a young staff lawyer submitted his report after checking out a property the firm was considering purchasing. Broad twice asked the young man without having looked at the report, "Is that the best you can do?" The new hire, intimidated, scurried back to make revisions. He sheepishly finally replied that it was and Broad said he told him, "Good. I'll read it now." The lawyer would later would go on to be the firm's CEO.
Broad: Ask Yourself 'Why Not?'
During the postwar boom years, there was a long list of homebuilders for a quickly growing nation. Where Broad stood apart was his penchant for taking measured risks on ideas that others rejected. He ran against the grain of common wisdom.
Case in point: Midwest homes without basements.
When Broad began his homebuilding venture at age 23 with partner Donald Kaufman, homes in the nation's heartland almost always had been built with basements. When Broad discovered that families were snapping up homes that didn't have basements in Ohio and Indiana, he borrowed the idea in order to reduce costs. All 17 parcels sold in his first weekend of sales, according to Broad's biography on his charitable giving website.
Likewise, Broad broke into the life insurance business using the same strategy. Kaufman and Broad bought Sun Life, later called SunAmerica, to offset its volatile housing business through economic downturns. But Broad realized he needed to take it a different direction in order to separate it from the life-insurance pack. He nudged SunAmerica away from selling traditional policies. Instead, he focused it on helping clients build retirement savings. The baby boomers, already his home customers, were an ideal target.
Some of the same "why not" spirit showed up in his philanthropy. He was outspoken in his support of competition in education. Broad called for more competition to traditional public schools. He urged new ways of thinking about education, be it charter schools or another form. He reasoned that if America's college system thrived by having colleges vie for students, the quality of K-12 public education could be raised as well.
Know Life Is Not A Popularity Contest
Broad soon discovered he could alienate people who resisted his vision. Yet time and again, his persistence succeeded, especially when it came to public exhibition of many of the works in his 2,000 piece art collection.
"Eli's ever evolving vision, unrelenting drive, ability to hyperfocus on both minutiae and outcome, and his exasperating tin ear for other's perceptions of his actions and motives, made those years the most challenging of my career," said Melody Kanschat, executive vice president, COO, and president of the Los Angeles County Museum of Art, or LACMA, until 2011.
She worked with Broad on various projects over 16 years at LACMA. Broad's foundation, for instance, donated $60 million to build the Broad Contemporary Art Museum at LACMA before he built his own art museum a few miles east in L.A.'s downtown. It's simply called The Broad.
As tough as those dealings could be, Kamschat said the encounters came with respect and admiration for what Broad was accomplishing.
"Despite those exacting traits, Eli's legacy is a mature and stable L.A. art and culture infrastructure that will support future growth and world class programming. He left Los Angeles with stronger institutions and stronger arts leaders. "
Build Wealth Like Eli Broad
Broad could accomplish much because of his enormous resources. Forbes listed Broad as being worth $6.9 billion at the time of his death.
He boasted that $10,000 worth of shares in Kaufman and Broad on the New York Stock Exchange purchased in 1961 would have been worth a cool $34 million by 1998.
Broad sold SunAmerica that year to American International Group for $18 billion, netting him $3 billion from the sale.
Give Back
Having amassed his fortune, Broad went about giving it away to good causes. He dove into a rich array of charities, causes and institutions.
Together, the Eli and Edythe Broad Foundation and The Broad Art Foundation report assets worth $3 billion.
Their foundations invested more than $600 million in trying to improve public education by investing in urban school districts from Boston to Oakland. The Broad Prize for Urban Education has awarded $16 million in scholarships to 1,200 students over the years.
In his book, Broad says he invests with three questions in mind. Will the institution make a difference in 10 years? Would it occur anyway without financial support? And are the right people are in place to ensure success?
Luckily for Los Angeles and the nation, many of the institutions met Broad's test.
Eli Broad's Keys
- Founded several public companies including KBHome, and later leveraged that business success into philanthropy. Top benefactor of many of Los Angeles' premier art institutions.
- Overcame: Modest upbringing that didn't match his lofty ambitions.
- Lesson: "Research — and using what you learn from it to analyze every situation — is what separates being unreasonable from being irrational."
