Buffalo entrepreneur Patrick Lee is giving back in a big way
Patrick P. Lee made a fortune over the last 40 years as majority owner and chief executive officer of an international holding company based in Buffalo.
Now, Lee is setting aside much of that wealth for charitable purposes.
The inventor and entrepreneur has established a private charitable foundation that could quickly become one of the largest in Western New York.
While Lee started the foundation in 2005 with an initial $30 million contribution, the eventual sum is expected to be $200 million.
Such an infusion would catapult the Patrick P. Lee Foundation into the second-largest in Western New York, behind only the John R. Oishei Foundation, which started in 1940 and has grown to an estimated $300 million.
“Especially in a market this size, to have that kind of influx of grant making, it’s huge,” said Catherine Gura, president of the Children’s Guild Foundation and head of the Western New York Grantmakers board, a network of area foundations and other funders. “I don’t know of any foundation that’s started out comparatively [with that much money.] What a great opportunity for the community to have that.”
Founder of Enidine
Lee’s fortune resulted from ITT Corp.’s purchase of his International Motion Control for $395 million last year. At that time, Lee made plans to increase the foundation’s endowment, said Frederic Cook, the foundation’s executive director.
Lee, an engineer by training, founded Enidine, a manufacturer of shock absorption and vibration isolation products. He began acquiring other companies and established International Motion Control, which became a worldwide conglomerate of manufacturing firms.
The foundation’s Web site states that it will use “the majority of the assets from the sale” of International Motion Control to “serve a world in constant motion.”
Those assets are now part of a charitable remainder unitrust, a popular estate planning tool. The beneficiary typically receives a capital gains tax break and an annual income — a percentage payout from the trust. In exchange, the assets go to the charitable foundation after the beneficiary of the trust dies.
The foundation’s board of directors includes Lee’s son Chris, who had been an executive at the company before he was elected last week to succeed Rep. Thomas M. Reynolds, another Clarence Republican, in Congress.
In Chris Lee’s campaign against Alice Kryzan, an Amherst Democrat, a political ad paid for by the Democratic Congressional Campaign Committee had claimed the company was sold to “a corporation he knew sent sensitive national defense technology to China” and accused him of “putting profits ahead of us.”
The sale occurred six years after a separate division of ITT had given away classified information and paid $100 million in fines and forfeitures as part of a federal court plea deal.
Patrick Lee, chairman of the foundation board, declined to comment for this story.
Cook said the entrepreneur formed the foundation to give back to the community that helped him prosper.
“There’s logic in giving back to the people who supported you throughout your career. That’s where he’s coming from,” said Cook, who was hired in August.
Money drying up
The Lee Foundation is likely to face high expectations from area nonprofit organizations, which often turn to foundations for help when government funding becomes scarcer.
“They’re all going to try to get their mantras, their missions in front of [the Lee Foundation],” Gura said. “It will be, people will think, like the floodgates have opened.”
Already, foundations are under growing pressure from struggling nonprofit groups, even though the foundations, too, have taken their lumps in the roller-coaster stock market.
“The money everywhere is drying up. The money at foundations is drying up,” said Paul
T. Hogan, vice president of the Oishei Foundation.
The addition of another large foundation will certainly help the area, Hogan added.
“This is extremely positive for the region, and it’s great that Pat Lee has decided to keep the money in the community here,” he said.
But Hogan also cautioned that local foundations can do only so much.
Combined, the foundations in Western New York pump about $80 million to $90 million annually into the economy — an amount that pales compared with local government. Erie County’s budget, for instance, is about $1 billion.
Most local private foundations typically give no more than $10,000 per grant. Larger foundations such as Oishei and the Margaret L. Wendt Foundation can make grants of $1 million or more — and they have done so for significant projects.
Florida also to benefit
Cook, a certified public accountant who formerly served on the board of directors of International Motion Control, has been meeting with representatives of other larger foundations, including Oishei, to get a better sense of the area’s philanthropic landscape.
“They’ve thought through issues in great detail that we’ve only begun to scratch the surface on,” Cook said. “There’s no point in reinventing the wheel.”
Cook says he hopes to meet as well with officials of the Wendt Foundation.
The Lee Foundation plans to focus on funding for health care, mental illness and education, and already has pledged $500,000 over five years to the Roswell Park Cancer Institute, where Lee had served for several years as chairman of the board of directors.
In addition to Western New York, the foundation considers requests for funding in Florida, where the Lees also have a home. Ocean Reef Medical Center in Key Largo, for example, received $250,000 over five years towards a new medical center.
The foundation is “open” to considering a variety of proposals, but plans to be thorough in investigating funding requests.
“No matter how much money you’re dealing with, you’ve got to stretch it as far as you can,” Cook said.
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