Scott Ball / Rivard Report
It comes as no real surprise that there was no fanfare, no press conference, not even a local press release when Charles Butt, the longtime chairman and CEO of H-E-B, took the Giving Pledge in late May.
Butt’s quiet commitment joins him in common purpose with Giving Pledge founders Bill and Melinda Gates and Warren Buffett, and more than 180 other billionaire philanthropists from across the globe who have committed to devoting at least half of their enormous collective wealth to address society’s most pressing problems.
The news that Butt and 13 other “signatories” had joined the ranks of super wealthy individuals taking the pledge was announced in a brief press release dated May 30 by the Giving Pledge and first reported in Texas by the Dallas Morning News.
“The Giving Pledge is a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to giving back,” the founders state on the Giving Pledge website. Individual commitments are a moral pledge. There is no legal obligation to fulfill the pledge.
Butt is the second San Antonio business leader and philanthropist to take the pledge. B.J. “Red” and Charline McCombs signed up in 2012, also without much local media attention.
“Since I have no children to whom to leave bequests, I’m in a different position regarding philanthropy than most people,” Butt said in a wide-ranging conversation with me last week about his philanthropy and deep commitment to public education in Texas. “This disinclined me to be too outspoken about it.”
Members of the Giving Pledge are invited to submit a letter at the time of their pledge, articulating their giving philosophy and decision to devote a substantial portion of their accumulated wealth to address the needs of others. Click here to download Butt’s letter.
“The roots of the Spirit of Giving at the company I have headed over the past 50 years are directly traced back to my parents’ decision in 1933 to contribute 5 percent of our pre-tax income to charitable causes. We’ve kept that pledge through changes in tax rates and other variables,” Butt wrote in his Giving Pledge letter.
I asked Butt how much money that had totaled over the past 75 years.
“I’ve never even thought about it, to tell you the truth,” Butt answered.
The annual 5 percent does not include Butt’s personal giving over the years. Last year alone his individual giving included a $100 million gift to create the Holdsworth Center, an education leadership development center focused on improving the quality of public schools in Texas and named in honor of his mother Mary Elizabeth Holdsworth Butt.
“We donate to charitable organizations in the areas of hunger relief, education, health, the environment, diversity and the arts,” Butt wrote in his Giving Pledge letter. “Reasons for our beliefs include: It’s our civic obligation. The income gap between top and bottom earners is too great for the nation’s future stability. It’s the right thing to do.”
Butt annually turns up on national magazine lists of the nation’s wealthiest individuals, and while he does not disclose his net worth and published figures cannot be independently verified, his future giving is bound to be significant. He has served as the head of H-E-B since taking the reins from his father, Howard E. Butt Sr., in 1971, growing it to 105,000 employees in Texas and Mexico and $25 billion in annual sales. H-E-B is one of the largest privately held businesses in the nation.
No amount of philanthropic support for public schools in Texas can make up for the growing gap caused by years of state cuts in education spending. The state share of school funding has shrunk from 50 percent in 2011 to 38 percent today, placing a greater burden on local property owners. At the same time, legislators are trying to cap local tax rates, forcing school districts to serve the state’s fast-growing population of socio-economically challenged students with less and less funding.
In our talk, Butt, 80, expanded on his own formation at a young age in a philanthropic family.
“I grew up in a home with two strong parents with very specific interests: my Dad was interested in H-E-B, which he had taken over from his mother when it was one tiny little store. He was very ambitious his whole life about building up the business. They had moved to the Rio Grande Valley in the 1920s and saw all the things that were missing in people’s lives down there. My Mom became involved in various initiatives, many connected with children.
“Then she was appointed to the state mental health board, where she served under six governors for 35 years. When she joined the board, the big state hospital on South Presa Street here had 1,400 patients and only one psychiatrist. So at the dinner table I was immersed in two things: H-E-B and philanthropy.
“My personal giving, which is not directly related to the company, covered various things in a scattershot fashion over the years, but I found I wasn’t making a difference. When I saw the challenges in public education about 20 years ago I became focused on that. It seems to me that if you focus in one area you stand a chance of making a small difference. If you give to a lot of things you don’t give enough to make a difference.”
Butt said public schools are at the foundation of American society, yet they lack champions with influence with the governor and the Texas Legislature.
“Regrettably, public education has been underfunded, ignored, under-led, sidestepped, attacked, and then criticized for not getting better results,” Butt wrote in his pledge letter. “Teachers are losing respect for their profession as we fail to support the amazing work many do.”
Kate Rogers, president of the Holdsworth Center, has recently led a number of groups of Texas business and education leaders on fact-finding trips to nations with high performing public school systems, including Singapore, Germany, Switzerland, and Sweden.
“The United States led the world in education at the World War II, but our rankings have dropped precipitously as other countries take different approaches, have more success, and, therefore, have better educated societies,” Butt said. “We are now ranked 40th in math globally. How would we feel about being 40th in defense?”
I asked Butt, who served as co-chair of the Pre-K 4 SA initiative that voters approved in 2012, why he focuses on Pre-K-12.
“Our universities still lead the world, and in Texas we have many graduates who are people of influence who can lobby with the governor and the Legislature on behalf of institutions like the UT System and the A&M System. Both have powerful advocates in Austin,” Butt said. “The public schools don’t have so many powerful advocates.”
In 2002, H-E-B introduced its Excellence in Education Awards, which have grown to be the biggest annual recognition of public school educators, school campuses, and districts in Texas, with more than $9.5 million in awards granted to date. One winning teacher recognized at this year’s gala event in Houston called the awards “the Grammys of Texas public education.”
The Holdsworth Center, which eventually will be housed on a Town Lake campus in Austin now under design by Lake|Flato, aims to serve 30 districts, 1,500 principals, and 3,000 education leaders in its first 10 years. You can read more about Butt’s vision for the center in his founder’s letter.
“It all starts with great leaders – supportive principals, administrators, superintendents and well-prepared teachers – in every classroom, not just a few,” Butt said.
Three years ago, H-E-B granted 55,000 employees more than $1 billion worth of stock in the company.
Taken together, these initiatives, including his Giving Pledge, represent purpose-driven legacy planning by Butt, whose support for public education appears more focused and ambitious than ever.
“We realize there are no silver bullets,” Butt wrote in the concluding line of his pledge letter. “Our group’s hope is to provide models of what is possible.”