T. Boone Pickens, the Texas oilman turned hedge fund investor, says he had a simple motivation for giving more than $500 million to his alma mater, Oklahoma State University: He got sick of watching the school's football team, the Cowboys, lose. "I quit coming to homecoming games because we got beat," says Pickens. "I don't like that feeling."
Pickens, who started his own oil company, earned a reputation as a hard-nosed corporate raider in the 1980s. These days the 82-year-old billionaire devotes himself to promoting his "Pickens Plan" to wean the U.S. off foreign oil by boosting output of natural gas, wind power, and solar energy.
Pickens, who graduated from what was then Oklahoma A&M in 1951, wasn't a big benefactor until 2002, when he contributed $20 million toward the $293 million renovation of OSU's football stadium, which now bears his name. Three years later he donated $165 million to the school's athletic department. The university's decision to invest the money with Pickens's own hedge fund proved costly: The investment ended up losing 38 percent of its value. More recently, Pickens has supported the university's academic programs with gifts and pledges of $220 million for faculty chairs and scholarships.
Pickens's largesse is helping OSU thrive even as many of its public peers struggle. State funding for OSU's general education budget was cut 4.7 percent for the year ending in June. Nevertheless, OSU is planning a new business school, recruiting better professors, and drawing more applicants. Undergraduate applications are up almost 44 percent in the past four years. "I have a lot of faith and confidence in Boone Pickens," says Mike Holder, OSU's athletic director. "As long as he's around, we'll ride him. When you've got Secretariat, you might as well saddle him up."
Oklahoma State, in Stillwater, trails the larger and better-known University of Oklahoma, in Norman, on the football field and off. OU has won seven national championships, compared with zero for OSU. Oklahoma's endowment of $968 million is almost double Oklahoma State's $495 million.
Pickens's 2005 gift of $165 million was intended to narrow the gap between the two schools. His millions, along with an additional $37 million from OSU's endowment, were invested with Pickens's hedge fund, BP Capital. The investment had more than doubled in value, to $407 million, by June 2008. Then the financial crisis hit. By the time the school cashed out in November 2008, all that was left was $125 million. Pickens, who agreed to waive his management fees, says he didn't profit in any way from the arrangement. Holder says the school acted in good faith. "I'd do it all over again," he says.
Holder and the rest of OSU's administration might have an easier time putting the whole painful episode behind them if it weren't for the athletics village that sits unfinished on campus. The state's power of eminent domain was invoked to obtain land for the project, which was then shelved by OSU when Pickens's millions evaporated in the market downturn. The land grab sparked outrage in Stillwater and led to the creation of "Boone State," a satirical website. Says OSU graduate Garrett Hellman, one of the site's creators: "The administration didn't seem to care about the overall good of the community. They pandered to whatever it was Boone wanted."
In recent decades institutions have tried to draw guidelines that limit the influence of individual patrons. Under IRS rules, donors cannot dictate how a tax-deductible contribution is spent after it is made, lest they benefit from it.
The Cowboys rewarded the man whose name adorns their plush stadium by winning a record 11 games in 2010. Success on the football field translates into increased recognition and relevancy for OSU, says V. Burns Hargis, the school's president. In the four years before Pickens's gift to the athletic department, the university received $327 million in donations. In the four years after, it took in $1.02 billion, including Pickens's money.
Pickens is confident he's secured his place in posterity: "It's going to be a long time before someone says, 'Who the hell was that guy?' "
The bottom line: T. Boone Pickens's money has raised Oklahoma State's profile, though some resent his influence over the school's administration.