Bechtel wealth has Underwritten new parkland at the presidio in San Francisco, among other big investments in California. Photo: Eug Png/shutterstock
You might not have heard of the Bechtel Corporation, but you’ve certainly heard of some of the projects on the company’s resume. Those include the Hoover Dam, the Chunnel between London and Paris, and numerous Olympic villages and stadiums.
Bechtel Corp. is the largest construction and engineering firm in the country, and currently the 11th largest privately held company in America. The founder, Warren A. Bechtel, died suddenly during the construction of the Hoover Dam, passing control to his son Stephen Davison Bechtel. In 1960, Stephen Sr. in turn passed the torch to his own son, S.D. Bechtel Jr., who oversaw company operations for the next three decades.
Like many stories of industrial success, Bechtel’s rise has often been entwined with controversy—including criminal charges for corrupt behavior overseas and a long record of misconduct as a federal contractor, resulting in $452 million in penalties since 1995.
At the same time, in what feels like a case study of the moral ambiguity of today’s Big Philanthropy, some of the vast wealth generated by this corporate giant has underwritten philanthropy for decades—mostly focused in California. Now, with Stephen D. Bechtel Jr.’s journey of giving seemingly drawing to a close, it’s a good moment to take stock of his legacy.
Bechtel, who is 95, is a type of donor we often refer to as a “super-citizen”—a philanthropist who sets out to bolster their home region through ambitious gifts and initiatives, often working in partnership with government. In recent years, he has also exemplified another trend we write about: the strong sense of urgency among some mega-givers to deploy their wealth on a relatively fast time table in a quest for greater impact.
The S.D. Bechtel, Jr. Foundation, which is due to shutter its doors this year, was established in 1957 with a commitment to helping California achieve long-term success. Many billionaire funders choose to fund issue areas that parallel their own career trajectory, and Bechtel is no different. As a graduate of Purdue University who earned his MBA from Stanford Graduate School, Stephen D. Bechtel Jr. is a highly educated winner in the engineering and construction space. It’s not surprising that his foundation has prioritized science and math education, making big investments in California’s K-12 system and key universities. Meanwhile, Bechtel’s other top priorities—environmental conservation and water management—reflect pressing concerns in California, a state that has battled drought and which has long sought to protect its wild areas in the face of relentless development pressures.
The foundation has deployed big chunks of wealth to advance its goals, especially over the last decade as it prepares to wind down, as IP has previously reported. Foundation Center data shows that the S.D. Bechtel, Jr. Foundation made over 3,000 grants totaling $915 million between 2010 and 2018.
Taking a closer look at where the money has gone offers a more granular examination of how a billionaire donor’s priorities have played out.
Looking at the period from 2003 to 2018, the biggest grantee has been the Boy Scouts of America, which received $57 million. That includes a pair of $10 million grants in 2013 and 2014, each of which went to the development of the National Boy Scout Center in West Virginia. Bechtel was an Eagle Scout, and has been recognized by the Boy Scouts with a Distinguished Eagle Scout Award and Silver Buffalo Award. His uncle Kenneth also served as National President of the Boy Scouts in the 1950s.
Stanford University was the second largest beneficiary of Bechtel’s giving through his foundation, receiving $36.6 million between 2003 and 2018. While that figure may sound high, it’s actually pretty modest compared to the kind of money that billionaires throw at their alma maters these days.
More impressive is the tens of millions of dollars that the foundation put up, starting in 2013, to support diverse California school districts in their efforts to implement the Common Core State Standards for Mathematics and Next Generation Science Standards. This has been a signature effort by the foundation, one complemented by an ambitious partnership with California State University to ensure that graduates of CSU’s teacher preparation programs are equipped to teach K-12 as standards change.
The foundation has also given $30 million to the Golden Gate Conservancy to advance another big private-public partnership—creating park space in the Presidio in San Francisco. When the first $25 million in funding for this work was announced in 2013, it was the largest cash gift in national parks history.
Other California institutions that have benefited from Bechtel’s largesse between 2003 and 2018 include the Monterey Bay Aquarium ($20 million), California Institute of Technology ($26.4 million), Public Policy Institute of California ($19.2 million), the Nature Conservancy of California ($18.7 million), UC Berkeley ($12.7 million), UC Davis ($11.9 million) and UCSF ($11.8 million).
Taken together, the foundation’s California giving provides an exemplary case of a billionaire “super-citizen” deploying wealth on a large scale to strengthen his home region. But while many such donors focus quite narrowly—supporting a few top local nonprofits or parks—Stephen Bechtel Jr. has taken an unusually comprehensive approach to investing in California’s future, giving attention to its K-12 schools, its universities and its natural resources.
A Path to Winding Down
The Bechtel Foundation’s plan to shutter its doors this year underscores a growing trend of grantmakers choosing to set a time frame for their giving. As a notable example of this approach, the foundation has received a fair amount of attention, including from the Center for Effective Philanthropy, which explored the lessons from its experience in a 2017 study. The study notes that the spend-down decision was driven ”first and foremost” by a quest for greater impact. And it detailed how dramatically a ticking clock changed grantmaking patterns: “In 2008, the year before the decision to spend down, the median grant size at the foundation was $25,000. In 2014, the median grant size was $100,000, and many initiative grants exceeded $1 million.”
Bechtel shares the CEP study on its website, along with other analyses of its sunset experience and resources on limited-life foundations. There are interesting findings here, including the fact that a majority of such foundations choose to spend down because they also believe that doing so will lead to greater impact, as opposed to continuing in perpetuity. In addition, sunsetting is said to afford greater flexibility in giving and grantmaking on a large scale. When foundation leaders aren’t worried about payout limits, they can deploy the kind of resources they really believe are needed to make an impact.
Among the advice that Bechtel offers to limited-life foundations is to openly communicate with grantees in an effort to be as transparent as possible. The goal here is to create robust, sustainable nonprofits that will outlive the foundation, and that means collaborating with grantees on how best to accomplish that. Also, the sooner the better. Underscoring this point are Bechtel’s own efforts to foster sustainability in its partner organizations, which began earlier this decade. Some of its pieces of advice include:
“Study the broader implications of an exit before finalizing plans or taking action, and create an exit plan that is adjustable. It is inevitable that things will change.”
“Help grantees avoid fiscal cliffs. Tier down support through multiyear exit plans whenever possible. Consider offering increased funding for field leaders and infrastructure as part of the ramp-down.”
“Allow grantees to set the priorities for capacity-building grants. Don’t default to a final-stage grant for fundraising, as it will almost certainly be too little, too late.”
The S.D. Bechtel, Jr. Foundation is in the twilight of its lifespan, and is cutting some big checks as a result. The foundation has accomplished a lot around its given issue areas, and has made a significant impact in its home region of Northern California. Bechtel leaves behind a legacy of educational and environmental grantmaking, as well as instructive resources for the next generation of limited-life foundations.
At the same time, one wonders if the story of Stephen D. Bechtel, Jr.’s giving is really coming to a close. According to Forbes, he still owns 20% of the Bechtel Corporation, giving him a net worth of $2.6 billion. His son, Riley, also owns 20%.
It’s not clear what will happen to this wealth over the long term. But here’s a prediction: Much of that money will eventually find its way to philanthropy. Which is to say that the story of Bechtel family giving likely isn’t over yet, and in the end, the sums involved may be far larger than all the money given out in recent years by the S.D. Bechtel, Jr. Foundation.