Joan Kroc's philanthropy super-sized and personal
By David Montgomery
Washington Post
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| The will of Big Mac billionaire Joan Kroc left $1.5 billion to the Salvation Army, a record for a donation to a charitable organization.
Advertiser library photo • Sept. 23, 1998 |
Then suddenly would come the knock at the door, the unexpected envelope: the $500,000 camouflaged as a holiday card for public radio, the $1 million delivered to the hotel room for AIDS research, the $15 million in anonymous checks of $2,000 apiece distributed like candy to flood victims.
And so one of the great American fortunes was being spent, one surprise at a time, a seemingly whimsical redistribution of treasure.
If you had more than $2.3 billion, how would you get rid of it?
Two years ago, when making surprise gifts of staggering sums was still pure fun for the Big Mac billionaire — before she felt the deadline pressure of terminal cancer — Joan Kroc stood briefly before a crowd of Salvation Army officers and San Diego dignitaries.
At 73, her hair was perfectly coifed and golden. Her voice was a fresh gust from the Minnesota heartland that she'd never completely left in spirit.
"I'm sure this is something that Ray would have liked me to do," she said, invoking her late husband, who built the empire called McDonald's and died in 1984. "And I'm sure he's looking down — ah, I hope he's looking down," Kroc added, prompting guffaws.
"I am a maverick salvationist," she said.
It was the June 2002 opening of the Salvation Army's $90 million Ray and Joan Kroc Corps Community Center in San Diego, an unusual appearance in the spotlight for Kroc.
The maverick salvationist proved a maverick philanthropist. She gave away money the way the nonrich fantasize it should be done: no fanfare or foundations, no red tape or robber-baron formality. Just the unexpected personal proffer of $1 million to prevent nuclear war, $3 million for a shelter for the homeless, $100 tips to the immigrants at the drive-through inquiring if she'd like fries with that.
She once set up a foundation, like most fabulously rich philanthropists. But she shut it down — too much paperwork.
She never read fund-raising pitches: If you asked Kroc, you did not receive.
She got her ideas serendipitously. The name of her yacht and jet was the same as her giving style: Impromptu.
St. Joan of the Arches, as her friends called her, might have remained in the shadows, not well known beyond San Diego. But her will — she died in October, about 3 1/2 months after being diagnosed with brain cancer — revealed she had just slipped $2 billion under some more doors, including another $1.5 billion to the Salvation Army, the largest gift ever to any charity; and $200 million to National Public Radio. In death, she emerged into the light of the annals of American philanthropy.
Staggering sums
There she was in the audience.
"I noticed in the front row about five seats off center was this rather handsome blonde lady," recalls the Rev. Theodore Hesburgh, former president of the University of Notre Dame. In 1987, he was in San Diego lecturing on educating students to be peacemakers in the nuclear age.
"She was paying rapt attention. After the talk she got up right away and came up to the podium and said, 'Father Ted, I really appreciate what you're trying to do to prevent nuclear war, and I really believe in that and I'm going to help you.' Having said that out of the blue, she turned around and walked away."
Hesburgh asked his hosts who the woman was. "Joan Kroc," they said, to which he replied, "Who's that?"
Six months later, Kroc asked for a tour of Notre Dame, where Hesburgh had started a peace studies program but lacked funding. A few weeks later, Kroc called and said she'd pick up the tab, $6 million.
"It was just like that — simple," Hesburgh says. "She was very modest about it. No fuss, no feathers."
Over the years, Kroc gave another $14 million, then left $50 million in her will. She also gave $30 million, plus $50 million in her will, to found a peace institute at the University of San Diego.
When Jimmy Carter was launching the international work of his Carter Center, Kroc invited the former president to lunch.
"She said, 'I'm going to give you 100,000,' " Carter recalls, "and I was feeling very pleased to get $100,000, but then she finished the sentence by saying, 'shares of McDonald's stock.' "
Carter could hardly wait for lunch to end. "I had barely got separated from her when I dashed to a newsstand, bought a copy of the San Diego Union-Tribune, and looked up McDonald's stock. It was $36 a share" — a gift of $3.6 million.
One day Kroc read in the Los Angeles Times about Mathilde Krim, founder of the American Foundation for AIDS Research.
"It's still a little mysterious," Krim recalls. "The next morning I received at my hotel a little envelope, and it contained a million dollars. And I almost fell over."
Once a sick hummingbird landed in Kroc's yard. It was taken to the San Diego Zoo, where it was nursed back to health. Kroc gave $100,000 for the zoo's hummingbird enclosure. Then she donated $3.3 million for a big-cat habitat. When the zoo needed to pick up a clouded leopard from Ohio, the cat flew first class on Impromptu.
"She loved surprising people and seeing the reaction," says Dick Starmann, her friend and philanthropic adviser. She'd say, "Boy, we're going to knock their socks off!"
But she was no-nonsense. She withdrew an offer of Western art when a group in Rapid City missed her deadline to open a museum. Sometimes in a business meeting she would sense she was being patronized or schmoozed. "When she walked out of the room, she'd say, 'They thought they were dealing with a dumb blonde,' " says Starmann. "And she'd wink."
In April 1997 Kroc watched televised reports of the flood that inundated Grand Forks, N.D., and East Grand Forks, Minn. She offered $2,000 of immediate assistance for each affected household as they awaited government and insurance money. Local officials, sworn to secrecy, publicly referred to the donor as the Angel. Kroc's name eventually leaked, but she continued to refuse recognition.
Once Kroc was on a plane to see her father, who was dying in a Minnesota hospice. She talked with her seatmate, Doris Howell, a doctor who dreamed of launching the first hospice program in San Diego.
Kroc gave $18.5 million to start the San Diego Hospice, plus $20 million in her will. She would drop by unannounced with flowers for patients and families.
Billions donated
This is not the way most billionaires give away money.
"Let us erect a foundation," declared John D. Rockefeller a century ago, "and engage directors who will make it a life work to manage ... this business of benevolence properly and effectively."
Rockefeller, Andrew Carnegie and others in the golden age of American philanthropy established large foundations to exist forever, donating as little as the 5 percent annual minimum required by the tax code. Most of the rest of their fortunes went to found big institutions: universities, research institutes, medical schools.
Rockefeller had given the equivalent of $2.9 billion in current dollars to his Rockefeller Foundation by 1929; it's still worth about $3 billion, distributing about $160 million annually and $12 billion since the beginning. The Carnegie Corp. foundation began with the equivalent of $2.2 billion in 1911. It's worth $1.8 billion now, donating about $80 million a year and $1.6 billion since its creation.
They've been outstripped by the top foundations today, according to the Chronicle of Philanthropy, including the Bill & Melinda Gates Foundation, worth $27 billion; Lilly Endowment and the Ford Foundation, each $11 billion; and the Robert Wood Johnson Foundation, $8 billion.
Creating a foundation that will survive you means more money can be given away over time. But a foundation eats up some of the fortune in administrative costs and puts off until tomorrow much of the good it could do today.
After Kroc's bequests to charity and an undisclosed sum to her family (which includes her daughter, who declined to be interviewed), the proceeds from McDonald's will be gone.
"It gets the capital assets into the hands of a nonprofit doing the work," says James Allen Smith, professor of philanthropy at Georgetown University. "It probably means that the good will be done sooner, rather than have it deferred and doled out at 5 percent a year."
Kroc also broke with tradition by giving so much — $1.5 billion — to a social service organization like the Salvation Army. The biggest gifts traditionally have gone to universities, museums and the like.
For years, Kroc gave gifts of increasing size to the Salvation Army, which she believed used money effectively, her associates say. She asked Salvation Army officers to plan a community center in San Diego's neglected neighborhoods, constantly urging them to dream bigger. One day Don Sather got off the phone and stopped by a colleague's office looking ashen.
"She wants to add an ice rink," he said.
If the center was successful, she wanted to try the concept nationwide, her associates say, but the Salvation Army didn't know that.
For the $200 million bequest to National Public Radio, Kroc quizzed NPR president Kevin Klose at length and sent Starmann to pore over NPR's books.
She surprised Klose with a holiday card in 2002 containing $500,000 for NPR. Seven weeks before she died, she told him they were "going to do great things together."
He had no more idea what that meant than did the Salvation Army.
Liked Filet-O-Fish
Kroc's neighborhood McDonald's was six miles from her $14 million house in Rancho Santa Fe, just north of San Diego.
To get there, she drove past thoroughbred horse farms and polo fields to a suburban shopping center.
"She came in twice a week," says supervisor Steve Naegele. "The Christmas before last she came in and passed out $100 bills to our crew."
Or she'd pull her blue Mercedes into the drive-through lane and leave a $100 tip. She liked the Filet-O-Fish.
"And a hamburger for her dog," says assistant manager Greg Wise.
'Annals of givers'
She kept her cancer diagnosis a secret from all but a close circle. "She didn't want pity," says her friend Maureen O'Connor, former mayor of San Diego and widow of the founder of Jack in the Box. "I said, 'Joan, you've lived 29 lives and we're going for the 30th.' She said, "I know that, honey. I've had a wonderful life. I'd just like a few more years to see my great-grandchildren grow up.' "
She began planning her last rush of giving, one more round of surprises.
"She said to me last summer before she passed away, "Aren't they going to be surprised!' " recalls Starmann.
At her memorial service, a granddaughter read from a letter Kroc had sent her on her 21st birthday.
"I want you to believe that a life of service is a happy one to lead," Kroc wrote. "Serve others joyously and your reward will be great; carry with you the message of charity and brotherly love. ...
"Amount to something! Vow to be more than a parlor ornament. Vow to be something that will place your name among the annals of the givers."
