Shifting Foundation

Two decades ago, the Burkitt Foundation saved the historic enclave of Hyde Park. But now the foundation is pulling out, and Hyde Park -- as well as many of the social service agencies it houses -- may really become a thing of the past.

As soon as the foundation put its properties on the market, real-estate agents were scrambling to put together bids for developers. A mere six days after they were listed, half of the houses -- all the contiguous ones around the Hyde Park cul-de-sac -- were under contract to be sold. Realtor Robert C. Ryan, one of six Ryan children, worked quickly: Perry Homes is already preparing the two large houses on Commonwealth for the wrecking ball, and real-estate sources say the Hyde Park enclave, most of which sold in one day to one agent, is under contract to apartment developer Jenard Gross.

Though nobody has questioned the foundation's legal right to sell its properties, some have wondered why it chose to do so now, and why so quickly. Since the Burkitt Foundation is a nonprofit trust designated for charitable purposes, the main goal of its directors is not to make money, but instead to give it away. And the directors argue that by selling, they'll have more money to disburse. But others have suggested that the uses the Hyde Park houses were being put to were perfectly in keeping with the foundation's mission, and the extra money won't make up for what's being lost.

In 1962, the childless Bess Burkitt Crane entrusted her considerable fortune to the law firm that had represented her railroad magnate father -- Kelley & Ryan. At Crane's behest, the firm set up a foundation that would annually distribute part of her money to charity. Kelley & Ryan oversaw the day-to-day operations of the foundation, managing its assets, screening grant proposals and answering requests for information. Current foundation directors say that Crane primarily intended to fund Catholic education and Catholic endeavors.

In 1967, lawyer R.H. Kelley passed away, and his son-in-law, Cornelius O. Ryan, succeeded him as president of the Burkitt Foundation. He followed in Kelley's footsteps in other ways as well, putting his legal expertise at the service of the Dominican sisters and serving as a Knight of the Sepulchre and a Knight of Malta.

Meanwhile, the firm devoted itself to investing Crane's money, purchasing some Montrose properties for her estate. When she died in 1973, those properties became part of her foundation. In the years following Crane's death, the foundation became more and more connected to the family of its president; C.O. appointed various Ryan children to the board, and by the early '80s, five of his six children served as trustees. Meanwhile, the foundation tapped C.O.'s son Robert to handle a number of the foundation's real-estate deals, for which he received commissions.

By 1986, though, internal squabbles had changed the makeup of the board. All but two of C.O.'s offspring -- Carl and Joseph -- were gone from the foundation's board, and Robert was no longer the Burkitt Foundation's real-estate manager. From 1986 on, Joseph Ryan was deeply involved with the foundation. He, attorney James McLain and another Kelley & Ryan employee, Frank Beatty, paid special attention to the real-estate side of the foundation's giving, locating appropriate nonprofit tenants and drawing up leases.

Then, in 1995, Joseph abruptly resigned from the board. At about the same time, C.O. gave up his ownership interest in Kelley & Ryan while retaining the presidency of the foundation, thus for all intents and purposes taking the foundation away from the firm to which it had originally been entrusted. "It was issues involving the succession of the foundation and its future control," is all Joseph will say of his reasons for resigning. "I wanted to diversify the board and move away from the Ryan family being in charge." At the end of December 1996, Kelley & Ryan's contract to administer the Burkitt Foundation expired and was not renewed. Instead, Texas Commerce Bank took over the administration of the foundation. Six months later, the foundation's properties went on the block.

Today, the Burkitt Foundation's board consists of C.O. Ryan, his brother Gerald, his son Carl and Bishop John McCarthy of Austin. William Ryan, another of C.O.'s sons, provides the foundation's legal counsel, and Robert once again brokers the foundation's real-estate deals. Though C.O. says "we don't want anybody to get the idea that this is an appendage of the Ryan family," in many ways the Ryans have inherited the Burkitt legacy, which today totals over $10 million.

The Burkitt Foundation money is not, of course, the Ryans' to keep. But it is theirs to give away. Many of the foundation's annual cash grants, which totaled $241,860 in 1995, go to Catholic schools, churches, missions and social service groups throughout Texas. For example, in 1995 Houston's Christ the King Church received $5,000, and in 1991 Austin's Natural Family Planning Center received $2,000. But a handful of non-Catholic organizations have also received foundation money, and at least some of those are connected to the Ryan family. In 1995, Episcopal Day School in Brownsville received $10,000 and Trinity-First Day School in El Paso received $2,000; both schools had among their students C.O. Ryan's grandchildren. The foundation also gives $5,000 annually to the religious studies department of Rice University, C.O.'s alma mater. And Rice's Phi Beta Kappa Alumni Association, which until recently counted C.O. as vice president, has been receiving $4,000 to $6,000 a year.

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