Utah billionaire industrialist and philanthropist Jon M. Huntsman Sr. sat down with The Salt Lake Tribune for an interview recently on the eve of the dedication of a $100 million expansion at the Huntsman Cancer Institute in Salt Lake City.
Huntsman, who has given away more than $1 billion to charitable causes, talked candidly about the state of the nation’s economy, the effect the downturn is having on charitable giving and the role he sees private enterprise playing in the battle to help relieve human suffering around the world.
When you look at the U.S. economy today, what do you see? What do you think is the problem?
Our most significant problem is that we are bankrupt. And that puts us under the same restraints as if we were a family, or a corporation or an individual. It limits enormously our capacity to spend more money or to build upon and improve any government-related entities. And that is troublesome. It means that without the support of government many of the entities we rely on will either be eliminated or greatly reduced.
So what is the solution?
Or, we have to dramatically reduce spending. And therein lies the great new problem of the 21st century. Up to this time, our two great problems have been, how do we find world peace, and how do we cure cancer?
Well, we’re working diligently on item number two. But now we have item number three: How do we deal with this massive debt and how do we reach a point in time where we have a balanced budget? I wish I were wise enough and knowledgeable enough to be able to suggest something other than dramatic cuts in spending.
How will that impact the Huntsman Cancer Institute and your charitable endeavors?
The Huntsman Cancer Institute is the most state-of-the-art facility in the world, yet because of the condition of America fiscally speaking, we receive fewer and fewer funds from the National Institutes of Health to find cures. All the funding is going elsewhere. So when we talk about the economy, I have to ask myself what does that mean? It means I will have to raise more money. I have to give more money and find more avenues to tap into to keep this facility and others going and productive.
One out of two men and one out of three women will have cancer in their lifetimes — every family will be affected by this disease — yet the dollars expended by government are so small it is hardly even measurable. So if we’re going to keep building and expanding (the Huntsman Cancer Institute), it has to be the focus of the private sector.
Can and will the private sector step up?
The problem is that we have only one of two cures for our economy. One is to increase government revenue, either through increased taxation or the Federal Reserve printing more money, which isn’t acceptable to most people, including me.
Well, here we have one of the most modern and efficient large cancer centers on the planet, and it has virtually all been done with private funds. If we did that for other charities and other elements of human needs, we could become very creative in replacing government. First of all, private involvement is far more efficient and more productive than government programs. And secondly it would teach people in America, particularly the wealthy, that they should do something worthwhile and beneficial to mankind with their huge amounts of capital.
What do you think of the Occupy Wall Street protest movement? Do you think they’d look upon you as one of the 1 percent, the richest rich who wield too much influence?
I don’t think they would. I think what they are upset about are the outrageous fees, commissions, salaries and bonuses that the Wall Street bankers, hedge fund and private equity fund managers give themselves for not creating anything.
We’ve been building our business for 41 years and now produce 12,000 products. We help make plastics that go into airliners. They replace metal parts so the planes are more fuel efficient and safer. We are one of the world’s largest producers of soaps and detergents to make the world cleaner and people happier and more beautiful.
And we give our money to charity. So I don’t think they are criticizing people like me. I think they are criticizing the same people I would criticize — the Wall Street bankers who make hundreds of millions of dollars shifting a few pieces of paper around and taking fat fees while they are not producing anything.
U.S. corporations are said to be sitting on vast amounts of money, and bank vaults are said to be stuffed. Why do you think that money is not being loaned or invested now?
I’m totally lost as to why people don’t either give their money away like we are trying to do to help those who are suffering, or investing it in something that will create jobs. I just don’t understand why that money doesn’t find one of those two homes. I know we’re trying to use the money we have to either expand our business or to build a greater charitable base. We don’t have any money that I’m aware of that isn’t being used in one of those two arenas.
You are part of Warren Buffett’s and Bill Gates’ group of billionaires who pledged to donate 50 percent of their wealth to charity. In fact, you’ve suggested 80 percent. Yet there are some who would suggest billionaires can be of the most benefit by saving and investing their capital — creating jobs and eliminating human suffering that way. Are those views mutually exclusive?
My answer is the same response that I gave to (Buffett’s and Gates’ group) when we last met. It isn’t a matter of retaining capital to expand your business and create jobs and giving to charity. It is a matter of trying to do both simultaneously.
My wife and I started contributing to charitable causes when we were first married and only making $300 a month. As we were able to make more money we were able to continue to give to charity, while at the same time keeping our businesses sufficiently supplied with capital for growth and expansion. We’ve been able to give over id=mce_marker billion away, and our business is stronger than ever.
Are there challenges associated with giving large amounts of money away?
One is that when you make a commitment to charity you have to honor it irrespective of the economy. If you make a 10-year commitment or a five-year commitment and the economy has a steep downturn, you still must keep that commitment. And that has been my greatest challenge over the years.
Like this facility (the Huntsman Cancer Institute), at times I have had to borrow $50 million, $60 million or $70 million from banks just to give to charity because I made commitments to do it. You can’t say let’s build a facility like this and the budget is $59 million a year, and the next year say I’m sorry but I can only give you $20 million and you’ll have to fire two-thirds of the people. You would never get anything built.
You have got to even out the flow, and that can be very, very scary for people. It is why, I think, a lot of (wealthy) people are leery of making intermediate or long-term charitable commitments. They are terribly frightened of what might happen when the economy heads south.
What do you think of your success in business?
I keep saying to myself lucky, lucky me. I don’t deserve to have such a fortune. I don’t understand how I was able to make this vast amount of money. We’ve been so fortunate to be able to put the pieces together so we [could] give money away. I feel that is not only an obligation but a duty for people like me who live in America.
So many people in the world (who have made fortunes) think, "I’m not going to give my money away until I’m all through building businesses." Yet in America we’re taught through the great spirit of helping one another, lifting one another up, sacrificing for one another, that we should share what we have as early as possible. And that is one of the elements that has made this country so great.
steve@sltrib.com Twitter:@ Oberbeckbiz
