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Salvation Army recieves a surprise gift

post #1 of 8
Thread Starter 
January 21, 2004

The Salvation Army, a charity best known for using bells and kettles to collect spare nickels and dimes at Christmastime, said yesterday that Joan B. Kroc, the wife of the builder of the McDonald's restaurant chain, had left it roughly $1.5 billion in her will when she died last fall.

The gift is the largest single donation that anyone in the worlds of philanthropy and fund-raising could recall — and more than the Salvation Army received from all sources in 2002 — and it left Commissioner W. Todd Bassett, the Army's national commander, tongue-tied.

"I can't even use the right words," he said with a laugh after he had mistakenly used "million" instead of "billion" several times during a telephone interview. "I struggle with it."

The gift, which was first reported yesterday by The Wall Street Journal, is likely to have a profound impact on the Salvation Army, a no-frills, religion-based organization that provides services like drug rehabilitation, transitional shelter, after-school programs and disaster relief.

"One of the interesting questions about this is whether it will change public perception of the Salvation Army," said Diana Aviv, president of the Independent Sector, a trade association representing nonprofit organizations. "Will people continue to think of them as part of the crew toiling alongside the Red Cross after Sept. 11 handing out blankets and coffee? Or will perceptions change, enabling them to attract donors who might never have considered giving to them before?"

Ms. Aviv noted that when Ted Turner pledged $1 billion to the United Nations, he raised its visibility and gave it credibility among philanthropists that it had lacked.

"Some people thought he was nuts; other people argued that countries, not rich people, should be doing what he was doing," she said. "But some people began to think of it as a place they, too, could give their money."

The gift is a huge vote of confidence in the Salvation Army. The organization is known for keeping tight control of administrative expenses, and Peter Drucker, the management expert, has long praised it for being well run and efficient.

Mrs. Kroc, however, handed it the biggest chunk of her fortune, which is estimated at somewhat over $2 billion. "It is really an honor to be trusted like that," Commissioner Bassett said.

The Salvation Army also had concerns about what affect the gift might have, discussing it with legal counsel for several weeks before it agreed to accept it on the terms that Mrs. Kroc had spelled out. "We really asked ourselves, `Are we prepared to accept this gift?' " said Maj. George Hood, national community relations secretary for the charity. "No one, realistically, was ever going to turn it down, but in accepting it, we are also taking on a significant fund-raising challenge."

Mrs. Kroc's orders were that half the gift be divided among the Salvation Army's four territories across the country and spent on building 25 to 30 community centers modeled after one she underwrote in San Diego. The rest of the gift is also to be equally divided among the four territories and held in an endowment, the income from which will pay for staff, maintenance, utilities and other expenses at the centers themselves.

But based on the Salvation Army's experience running the Ray and Joan Kroc Corps Community Center in San Diego, which Mrs. Kroc paid for with $92 million and opened in 2002, that will cover only 40 percent to 50 percent of the total operating costs of the centers, Commissioner Bassett estimated.

That means the Army may have to raise as much as $70 million annually to cover operations when all the centers are built in 10 to 15 years, Major Hood said.

Large gifts can also be a double-edged sword, discouraging other donors from making contributions because they think the recipient no longer needs their help. "We know there will be additional fund-raising pressure because the communities that support us will have to be convinced to continue to support our other efforts," Major Hood said.

The Salvation Army offers a wide array of programs and services through more than 9,000 centers and with the help of more than three million volunteers. Founded in 1865 in England, it came to the United States in 1880. It is run by ordained ministers and has a quiet but strong evangelizing component to its activities, which has often placed it at the center of controversies about public financing.

Commissioner Bassett said Mrs. Kroc was comfortable with its Christian roots and knew that each center, like the one in San Diego, would have a chapel or a place of worship on the premises. "I have been in her home, and she asked those of us there to sing `The Old Rugged Cross' and `What a Friend We Have in Jesus,' " he said. "She fully understood the importance of the spiritual life of a person and knew that was integral to the Salvation Army."

Mrs. Kroc, who was dubbed St. Joan of the Arches by former Mayor Maureen O'Connor of San Diego because of her philanthropy, was a quiet giver. Peter Rowe, a columnist at The San Diego Union-Tribune, used newspaper clippings to estimate that she gave away $639 million, including $335 million in gifts after her death ($200 million of which went to National Public Radio).

Dick Starmann, the former McDonald's executive who was her longtime spokesman and is a trustee of her estate, said the first time he ever wrote a press release about Mrs. Kroc was when she died, and the announcements about her posthumous gifts had all been made by the organizations that had received them.

"She wasn't like, frankly, a lot of other wealthy people," Mr. Starmann said, adding, "She did what she did very quietly, very purposefully and had a lot of fun doing it."

Mr. Starmann said she would put on a babushka and go to the Kroc community center and just sit and watch children swimming in the aquatic center or ice-skating on a rink that is said to be good enough for the National Hockey League.

"She saw how it worked and how the Salvation Army handled it tremendously well, and so she was comfortable entrusting them with this gift," he said
post #2 of 8
Wow, that is quite a donation...Does that mean the Salvation Army will take time off on the next holidays? Well, I think the money is going to a very good cause.
If I had that much money to give though, I would sort of spread it over a number of charities, specially animal welfare organizations
post #3 of 8
Maybe it will encourage more people to make large donations. When I think about giving to the Salvation Army, I think about stuff: furniture, clothing, books, etc, and the occasional bill or handful of coins. I think it's great that she did that.
post #4 of 8
I would love to be able to donate that kind of money to the ASPCA, maybe then some could afford to be no kill shelters and do free spay and neutars.
post #5 of 8
I think that's wonderful! Billions don't even register with me I just know it's a LOT OF money! What a nice person.
post #6 of 8
It was very honorable what she did. Too bad she wasn't an animal lover
post #7 of 8
That's an excellent thing to do. I'm sure they will put it to good use.
post #8 of 8
Originally posted by Princess Purr
I would love to be able to donate that kind of money to the ASPCA, maybe then some could afford to be no kill shelters and do free spay and neutars.
I think one of the Silicon Valley mega-millionaires did just that it San Francisco a few years back. I don't know if it impacted their entire shelter system, but I recall reading that at least one large non-kill facility had been built and completed funded by him. I cannot recall the company he owned though.
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