Koch Industries and the Fred and Mary Koch Foundation are giving $11.25 million to Wichita State University, the largest single-time gift in university history. University leaders said the money will create a significant impact on education, local entrepreneurship, jobs and south-central Kansas economics.
Except for $4.5 million being given to athletics, most of the money will go to students and scholarships, WSU and company leaders said.
The money will be spent five ways, according to WSU and the company.
1. Athletics – $4.5 million will go to expanding and renovating Charles Koch Arena and expanding the Student Athlete Success Center.
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2. Maker space – $3.75 million from the Fred and Mary Koch Foundation and Koch Industries will help create a 15,000-square-foot maker space in the new 140,000-square-foot Experiential Engineering Building for inventors and entrepreneurs. That building will be the centerpiece creation of the new innovation campus that John Bardo, the WSU president, has proposed to jump-start jobs and economics in south-central Kansas. Money for the maker space will pay for scholarships and training stipends to qualified applicants.
A maker space, according to a prepared statement written by Koch and WSU officials, “is a cross between a business incubator, a manufacturing plant and a design studio – a place where creative people of all ages and skill levels will have access to sophisticated equipment and training, shared work spaces, expert advice and a supportive community of like-minded people.”
3. Honors College scholarships – $1.54 million will go to the new WSU Honors College, created by Bardo to attract and support high-achieving students. The money will create the Honors College Koch Scholars Program, a competitive award for high school seniors who plan to enroll in the honors college and major in business or engineering, Bardo said. As many as 10 scholarships per year of up to $7,500 for in-state students and $15,000 for out-of-state students would be awarded beginning with the 2015-16 academic year, he said.
“These honors colleges draw bright kids to universities in all kinds of areas,” Bardo said. “The students involved really have an impact on the quality of students you get and on the workforce of the future.”
4. Money for student inventions – $1 million will create the “Koch Innovation Challenge,” which will give students financial rewards for creating innovations. Freshmen and transfer students will compete for money and scholarships to invent products and technology. The College of Engineering will run the program, Bardo said. The program will begin in the 2016-17 academic year, WSU and Koch officials said.
5. Global Trading Center – $460,000 will be used to pay moving expenses when the new Koch-financed Global Trading Center moves from Clinton Hall to the new Frank W. Barton School of Business (another new building that Bardo hopes to construct, starting in 2017). The trading center opened in July. Koch Industries provided most of the money to create that center, which teaches about financial and commodities markets.
‘Where people can innovate’
The Fred and Mary Koch Foundation donated $3 million to the maker space of the total $11.25 million gift. The rest of the donation came from Koch Industries, company officials said. Liz Koch, the wife of Koch Industries CEO Charles Koch, runs the family foundation.
The maker space will employ many ideas her husband tried successfully at Koch Industries, she said.
“It is providing a place where people can innovate. And when you have a place like that, out of the hundred projects that are duds comes something that does work.”
The family foundation, like the company, doesn’t just give money away, she said. It invests in projects that she hopes will grow, including the maker space.
“The other thing you’ve got with this is the discovery process, where people can invent things,” she said. “And the reason this is a great idea here is that … it’s not like there are a hundred labs sitting around where you can just walk in and try something.
“So for someone with the mind for it, this can work for them,” she said. “They can come in and try things and do it without bankrupting themselves.”
WSU’s importance to Koch
Koch officials have not asked for control of any of the new programs and haven’t asked that any new buildings carry the Koch name, as the Charles Koch Arena already does, according to Bardo.
“They’ve pretty much been model donors,” Bardo said of the Kochs. “They’ve asked only to be consulted, which is what we do with all our other donors.”
Bardo said he is aware that Koch donations to other entities and other universities have prompted criticism elsewhere because of the political spending of Charles and his brother, David Koch.
But none of this money has anything to do with politics or ideology, he said; it’s about scholarships or entrepreneurship or the arena.
The family’s interests and charitable causes range far beyond politics, Bardo said, including science, engineering, business and entrepreneurship.
Wichita is their hometown. “These guy (the Kochs) are really bright guys and care about their community,” Bardo said. “We have always found them to be pretty easy to work with.”
That work began months ago when the Wichita State University Foundation started a new fundraising campaign. The foundation’s board includes Steve Feilmeier, a WSU graduate (1985 master’s degree in accounting) and the chief financial officer for Koch Industries. His membership on the board had nothing to do with what happened next, Feilmeier said.
“This was the collective leadership at Koch thinking that this was a good business decision,” he said. “The areas we are targeting (for donation) are good for Koch and also good for Wichita State.”
Koch officials like what Bardo has done with WSU, he said. “He thinks WSU should be the catalyst for the south-central Kansas economy, and he’s certainly sown the seeds to make that happen,” Feilmeier said.
Koch Industries believes keeping WSU strong as a university is crucial to the company’s ability to attract, hire and retain employees. Koch has about 3,500 employees in the Wichita area, he said.
Koch hires 40 to 50 WSU graduates every year, and 200 of its employees currently have family members enrolled at WSU.
“WSU needs to be successful for us, and we need to help them be successful,” he said.
In July, Bardo and foundation president Elizabeth King met with top Koch officers, including Feilmeier and Charles Koch.
“We have complete confidence that (Bardo) is taking that university from point A to point B quickly on quality as well as everything else,” Feilmeier said. “He’s doing it around all the right areas, including engineering and innovation.”
More meetings followed, King said. Royce Bowden, the College of Engineering dean, proposed providing not only scholarships but competitions in which WSU students win financial rewards and start-up money for inventions and innovations, King said. Bowden said those ideas were worked out with Koch leaders before that meeting. The upshot: The engineering college will now run a $1 million incentive program.
“Students will now graduate not only with intellectual property they created but with the know-how on how to capitalize on it,” Bowden said at the announcement Tuesday.
Kimberly Engber, dean of the honors college, said it will use the gift to recruit high-achieving students and students from the Wichita area who might otherwise look elsewhere for a university education.
“A gift like this will have an immediate impact on students and faculty,” Engber said.