Family businesses are a substantial driver of the world’s economy, contributing an estimated $68 trillion to global gross domestic product. But the unique challenges faced by these enterprises often limit their longevity and success, with only a handful surviving past the third generation.
In order to improve those odds and the impact of family business on the economic landscape, the St. Louis-based Koch family has made a significant commitment to establish the Koch Center for Family Business at Washington University’s Olin Business School. The commitment, which comprises $12 million in estate and outright gifts, also will endow two distinguished professorships—one affiliated with the center at Olin and one at the School of Law.
The Koch family, including Paul, BSBA ’61, JD ’64, MBA ’68, and his wife, Elke, as well as Roger, BSBA ’64, MBA ’66, and his wife, Fran, pledged seed funding in 2016 to initiate a family business program at Olin. Their new commitment was announced at the third annual Olin Family Business Symposium in February.
“This strategic initiative in family business education, research, and outreach will benefit our students and family businesses in our community and beyond for generations to come.”
—Chancellor Mark S. Wrighton
“The Kochs have been passionate about seeing a greater focus on family business at Olin for many years,” Chancellor Mark S. Wrighton said during the symposium. “This strategic initiative in family business education, research, and outreach will benefit our students and family businesses in our community and beyond for generations to come.”
As co-chairmen of the board of Koch Development Co., which was founded by their grandfather, brothers Roger and Paul Koch have firsthand experience in running a family business. The company develops and manages commercial real estate and also owns and operates entertainment attractions, such as SkyWheel observation wheels in Myrtle Beach, South Carolina, and Panama City Beach, Florida. Additional SkyWheels are planned for Newport, Kentucky, located across the Ohio River from Cincinnati, and Virginia Beach, Virginia.
“There’s a lack of perception about how many family businesses there are and what role they play,” Paul Koch says. “There’s also a lack of perception about the complexities of family businesses.”
Roger Koch adds, “In making this gift, we hope to bring greater attention to these issues and encourage rigorous research that will help in the formation, growth, and sustainability of family businesses.”
The Kochs’ investment in family business and professorships builds on a long history of philanthropy at Washington University. The family has provided significant support for the Alvin J. Siteman Cancer Center and for scholarships and facilities at Olin, where both Roger and Paul earned undergraduate and graduate degrees. They also support the School of Law, where Paul earned his law degree. Roger and Paul received Distinguished Alumni Awards from Olin in 2012. Paul received a Distinguished Alumni Award from the School of Law in March.
Recruitment for the Koch Distinguished Professor in Family Business is underway. The Koch Professor will lead the family business center, conduct research in the field, and develop programming to assist family businesses.
“The center will have a strong research orientation, and it also will serve the business community by providing training, resources, and programs to foster best practices,” Olin Dean Mark Taylor says. “The Koch family has been extremely instrumental in pushing forward this vision of a center that will strengthen the study and viability of family business.”