Interview with Ken Langone

When Ken Langone got word that his friend Bernie Marcus had been fired, he was thrilled. “You got hit in the a** with a golden horseshoe,” he crowed. Marcus was not amused. Sure, he had a pie-in-the-sky vision of a massive home-improvement store that would totally remake the industry. But he was flat broke. That didn’t worry Langone; raising money was his specialty.

Langone hit the pavement to find investors for what is today the $220 billion global chain Home Depot. It was a steep climb from his working-class background. Raised by a plumber and a cafeteria lady who prodded him to get an education against his will, he ultimately buckled down at Bucknell while starting side businesses right and left. He broke into Wall Street despite hearing at every turn that he did not belong. He founded his own venture-capital firm in 1974 and helped launch Home Depot with Arthur Blank and Marcus four years later. His recent memoir I Love Capitalism! gives ample credit to the system and the individuals who set him up for this success.

With his wife Elaine, Langone was among the original signatories of the Giving Pledge. He often gives anonymously, but occasionally makes donations with naming rights. He has served on the boards of Bucknell University, NYU Langone Health, Harlem Children’s Zone, the Robin Hood Foundation, the Center for Strategic and International Studies, St. Patrick’s Cathedral, and more. At 83, still hard at work to make more so he can give more, he met with Philanthropy to discuss his major donations.

Philanthropy: You start your story with a debt of gratitude you say cannot be repaid. Hundreds of millions in giving, and still you consider yourself in debt.

Langone: When it came to my last semester at Bucknell, I was short $300 for the classes I would need to graduate. Elaine and I had just gotten married, and we were poor as church mice. If I couldn’t graduate that semester, I would have to drop out. Thanks to the dean’s assistant—Martha Henderson, I’ll never forget her name—Bucknell lent me the $300. It was a loan, but I considered it a gift: I paid it back long ago, but I still feel like I owe them three hundred bucks.

Philanthropy: What was Bucknell’s return on that investment?

Langone: Lots and lots of money. I believe my wife and I are the biggest donors in the history of the university. But still, I can never pay them back. No matter how much more you do for the other guy, when he was there for you at a critical point in your life, you can never truly pay him back. Because that was the key to the door that let me go beyond that point. If I hadn’t had it, who knows what would have happened?

Philanthropy: Often people begin their philanthropic careers giving to their alma mater. Was that what you did?

Langone: I was on the Bucknell board of trustees from 1981 to 1996. But about 35 years ago my wife and I began to get serious about philanthropy in many areas. We realized how good fortune had shined down on us and we felt like this was something we should do. When we decided it was time, we had a pretty good list of places that we wanted to support. Although we don’t give them equal amounts of money, they’re equally important to me: The Boys’ Club of New York. Harlem Children’s Zone. The Animal Medical Center. The Catholic Church. New York University.

I went to NYU Business School at night to get my MBA when I was first working on Wall Street, and I taught at NYU afterward. It was a great opportunity for someone from my background, working my way up. But I lost contact with the school for a long time. When NYU Law phased out its night program, I worried about the future of the business school’s night program that had been so valuable to working professionals like me. I made a $10 million gift in 1999 to help it along.

Thanks to that relationship, my friend Marty Lipton, who had just become chair of the NYU board of trustees, came to see me with the president of the university. They explained that the medical school was in crisis and asked me to come aboard as chairman to provide leadership. My first thought was, who knew NYU had a medical school?

Philanthropy: We hear a lot of different perspectives on naming rights and anonymous philanthropy. You’re in the somewhat unusual position of having done both—identical gifts to the same institution. First you anonymously gave $100 million to the NYU Medical School. And then you gave the same amount again in what became a naming-rights gift, NYU Langone Health, though you had intended that to be anonymous, too. Walk me through your thinking for why you wanted it to be anonymous and what changed your mind.

Langone: I had a business interest in medicine from early on; my company Invemed was heavily involved with the health-care field. I believe in new technology with old-fashioned patient care. Before I responded to Marty’s request, I spent the better part of three months doing research, talking to a lot of people inside and outside of NYU. I saw that the quality of care there was spectacularly good. But morale was low thanks to a merger with another hospital, massive financial problems, and confusion over who was in charge.

I concluded that I could be helpful. I had recently stepped down from the Bucknell board after 15 years. I believe there should be a limit on how long you hang around, and I felt like that’s enough. So I had the time and I had a very personal knowledge of the challenges that were going to be presented to health care by virtue of the aging population.

But I didn’t want people to think I walked in with a big check and said, okay, now make me chairman. They didn’t ask us for a donation. I told Marty that I would take the job, and as part of that endeavor, I was going to give him $100 million anonymously. Elaine and I thought, we like who we are. We know who we are. We don’t need to make a splash in the society pages or anyplace else. It’s awfully easy when people are kissing your behind to let it go straight to your head.

When I came aboard, it was a hell of a mess. The better part of my contribution was not the money. It was my effort and my time to unravel this mess and get the place going.

Philanthropy: What did you do to turn it around?

Langone: What I came in with—which was far more important than my medical background or lack thereof—was my understanding of how to get people to move together in one direction. That was Home Depot. We’d have directors go to stores and hold small meetings in the breakroom with the associates. We’d motivate the kids and encourage them that they make a difference—that they are the difference. We’d inspire them to give the customer a great experience.

So one of the first things I did at NYU was to tell the dean I wanted to have meetings with doctors, and nurses, and anybody else who wanted to come. And the same pitch that we made to the kids in the stores, we made there, and it resonated.

The thing that made me say I would take the job was when I learned how good the doctors and nurses were. I said, this is easy. They’ve got the great people already. They just need a clarion call. And we’ve got to figure out a way to get them facilities to go with their talent and their commitment. The two things I had to do at NYU and at Home Depot were the same: raise money and be a cheerleader.
 
Philanthropy: Raising money is where the second installment of $100 million comes in.

Langone: In eight years, after we dramatically enhanced our operation, our wonderful dean retired and we opened the search for a new one. We picked our head of imaging, Bob Grossman, and I was so excited about his vision that I gave another $100 million so he’d have something to work with.

Again, it was to be anonymous. But Marty and Bob came to us and argued that attaching our names to the institution would result in a plethora of following gifts. This felt strange to Elaine and me. We were just two poor kids who had far exceeded our dreams. But we thought about it, and said if it’s for the good of the organization, let’s do it.

My mother used to say to me, self-praise stinks. She was a very wise lady. It’s still surreal to me to walk in there and see my name on everything. When I walk into the doctor’s office and he’s going to examine me, there on his coat is my name. That’s heady stuff.

But it turns out Marty and Bob were right, because we got four $100-million-plus gifts in response. Numbers that large, I have difficulty relating to. It’s a staggering sum. I’m not suggesting we didn’t create value that enabled us to earn the money. I’m only saying that in the context of my life—where I started from and where I am—it’s awesome. If you’d have told me 50 years ago this is where I’d be, I’d say you’re out of your mind. When I got out of college, all I wanted to do was make $10,000 a year. That was my dream. I think I beat it.

Philanthropy: And then you made a third gift of $100 million in 2018 to make tuition at NYU Langone Health free.

Langone: Bob and I had been discussing the idea of free tuition since he came aboard, and laying the groundwork for the better part of ten years, sharing our dream and our vision with board members and donors. Bob argued that it would be a game changer. It would enable graduates to pick lower-paying fields like primary care and pediatrics, where more good doctors are desperately needed, without overwhelming debt to force them out.

We’re just one school, but we hoped that by getting out front and setting the example others would follow. When we finally reached the point where we had enough money to pull the trigger, Elaine and I contributed the third $100 million as part of the announcement.

Of course, the lure of free tuition made our already-high application numbers spike 50 percent. This included a lot more applicants from disadvantaged backgrounds, double the number of minorities. A kid whose father is a plumber and mother works at a school cafeteria who is bright and motivated, he wants to be a doctor. He says I’m going to apply to NYU, because if I do, and get in there, I’m going upwards. It’s within my framework of reality.

But out of 9,000 applicants, we can only accept about 90. It’s a high-stakes choice. We can be very choosey, but still, it’s hard to discern who is going to carry through on the ultimate mission, who will make patient care their core commitment. It will be years before we see what fields these students go into.

Philanthropy: With this and with other scholarships that you’ve funded, is it your hope that those recipients will view the help they get in the same way you view your $300 from Bucknell?

Langone: We’ve got 38 kids on scholarship at Bucknell now. They very nicely drop me a note every once in a while. I tell them I appreciate the gratitude, but if they have the good fortune I did, to share that good fortune with other people. That’s the implied obligation. Not to me, but to society.

The best leadership is by example. Don’t ask people to do something you wouldn’t do yourself. One time I was in a store meeting with Home Depot employees where I learned that the store manager was unresponsive to their concerns. I wrote my New York office number on the blackboard and said if anybody has a question they can call me. On the way out, I said to the store manager: “Look, I understand you’re too busy to talk to your people. I don’t mind. But if they have a problem, they’re going to call me.” That problem went away fast.

Philanthropy: Did anybody call you?

Langone: They still do. I go to the stores. I talk to the kids. I want to know if they’re happy. I want to know what we can do to make it the best place for them to come to work.

We have a store in Paducah, Kentucky. I met the manager of that store somewhere and he said to me, nobody ever comes to Paducah. I’m sorry to hear that, I said; when’s the next store meeting? I flew to Kentucky. I walked in the store and I said, you can’t say nobody ever comes here anymore. Here I am. Look, people need to know that they matter. We all want to feel a sense of purpose in ourselves. It’s that simple.
 
Philanthropy: Home Depot has the reputation for a robust culture of volunteering and corporate philanthropy which you helped instill.

Langone: We felt strongly that when we open stores, we should show our appreciation—by offering great products, low prices, and great service, but also by embedding ourselves in the community. So we told the people in the stores that this is an important part of who we are and you’ve got to be part of it. Our people build playgrounds and houses for veterans. When there is a local disaster, they are out front running supplies and helping rebuild.

About 20 years ago, my co-founders and I agreed we wanted to start something: a fund for our employees where, God forbid, if there was a sudden death in the family, an illness, a car accident, you name it, they could receive a $2,500 emergency grant. Each of us put up $5 million and we started the Homer Fund. The Homer Fund is now supported by all the staff. They can give a buck a week or whatever they want to give. 

Philanthropy: From your experience on multiple boards, what makes for a successful board member?

Langone: I’m active in anything I’m involved in. If I’m not active, I’m not going to be involved. If you want me on a board just for my name, go get somebody else.

In the case of a charity, I need to understand what the goal is. I’ve never had one charity that didn’t have a noble calling. That doesn’t mean they were effective. My job, wherever I’m involved, is to make sure not a nickel is wasted. I know how to get the most out of a buck. As philanthropists, if we don’t use our skills as well as our wallet, shame on us. So when I get involved, I’m all in.

I have no shortage of activities. I’ve got a lot of shortage of time. All the money I gave away, I’ve already gotten it all back. I made more. So it’s like water in a tank. What I’ll never get back is the time I gave. I could’ve been reading a book. I could’ve been playing golf. I could’ve been watching a movie. I could’ve been making more money—which I love doing; I love my businesses. So I made a sacrifice. 

Philanthropy: After our talk, I’m going to swing by St. Patrick’s Cathedral, where you have had a lead role in fundraising. What should I keep a special lookout for there?

Langone: You’re going to walk in, and wherever you turn, you’ll see something that’s going to blow you away. Just the awesomeness of the place. A whole city block. One of the most valued pieces of real estate in the world, and it’s a church sustained by private contributions, from wealthy individuals and poor individuals. I headed up the effort to finance the restoration, which cost almost $200 million. No government. Did it all ourselves.

One element of particular importance to me is an altar Elaine and I dedicated. On Good Friday, Christ was carrying his cross, his face covered with spittle and blood and sweat. A woman wiped his face, and on the towel was this image of him. The feature of that altar is a marble mosaic of the face of Jesus on a cloth.

Most mornings, I start my day at St. Patrick’s. Then I can sin the rest of the day, see? Then the next day, I make up for my sins and then I go out and I sin again.

Philanthropy: What does your faith mean to you?

Langone: My faith is everything. I came from a devout family. I loved being an altar boy. I’m not going to judge anyone else for their beliefs, but for me, God is the most important part of everything I do. Back when I was teaching, I did tell my business students if there’s one book they need to read, it’s the Bible—Old and New Testament. There’s guidance in there for everybody. I pray every morning, “God, let me always do it for your praise, honor, and glory—not mine.”

As a devout Catholic, I lament what the Catholic Church is going through right now with the revelations of abuse. It’s something that’s got to be fixed, and it’s not going to come without pain. 

Because of my role at St. Patrick’s, I was part of a delegation to greet Pope Francis when he visited New York. I disagree with him about socialism big time. But bear in mind, he only came to America four years ago for the first time in his life. And he came out of a country where a few families control the wealth and they don’t give a hoot about the rest of the people. So that’s the way he’s informed.

To him, or to anyone tempted by the promises of socialism, I say, look at every university. Look at every hospital. Look at every charity. Look at anything in this country. Names are on it because people took money out of their pocket and gave it to that cause. If some successful guy didn’t give those things, they wouldn’t be here for you.

Philanthropy: You’ve spoken out about income inequality. That’s not a phrase we often hear from a conservative Republican like you.

Langone: I’m very passionate about it. Because I came from the other side of the tracks. It’s a serious problem if people don’t have the same opportunities that I did or believe that there’s a ladder up for them. You can’t have a country divided by envy, it won’t function well. As my book says, I love capitalism, but it has flaws, and it’s up to us as capitalists to make sure that the tide does indeed lift all boats. That’s our challenge, and that’s our responsibility.

The thing I brag about—at Home Depot we have 3,000 kids who started with us entry-level, which means in the parking lot pushing carts. These kids didn’t go to college, but they stayed with our business and worked hard, and 3,000 of them are multimillionaires today. That’s capitalism. That’s how it’s supposed to work.

Henry Kaiser had a great expression: problems are opportunities in work clothes. In this world, there are still opportunities. Think of Home Depot—Bernie was 49, I was 43. We weren’t kids. We weren’t upstarts out in the Valley with an algorithm that could make a zillion dollars. We took a well-established industry and turned it on its head.

And on that note, I’ve got to go now and make more money!