- WHAT GIFTS BUILD
At this time last year, the Walton Family Foundation, Arkansas's richest and most generous, ranked 42nd nationally in asset size, with $1.3 billion.
Today, the foundation could be second in worth only to Bill and Melinda Gates' $33 billion foundation, depending on how much of Helen Walton's estate has been transferred to it.
Walton, the widow of Wal-Mart founder Sam Walton, was the 11th richest woman in the United States when she died in April. She had already made known her intention to leave her estate to charity. If her estate has been distributed and a sum approaching the $16 billion in Wal-Mart stock she held has gone into the family foundation, its assets should exceed those of No. 2 Ford Foundation, $12.2 billion at last report. Because foundations must give roughly 5 percent of assets yearly, the impact could be astounding.
The foundation declined an interview, so we can only speculate what the infusion into the family foundation could mean for causes in Arkansas. In 2006, the family foundation (to be distinguished from the Walton Family Charitable Trust Foundation) gave more than $56 million to Arkansas non-profits, including $35.3 million to three universities for the Walton International Scholarship Program.
The foundation's major thrust has been K-12 education, and in 2006 it gave $92.2 million to charter school, merit pay, voucher and other school initiatives across the country.
Total giving for 2006 was $189 million, and also included $50 million to special programs (including the Walton Scholarships and the Bush-Clinton Katrina Fund), $21 million to entities in Northwest Arkansas (including $10 million to Crystal Bridges Museum, founded by Helen and Sam Walton's daughter, Alice) and $4 million to programs to breathe life into the economy of the Delta in Arkansas and Mississippi.
A trend in giving in Arkansas is gifts and grants to public school districts. Some of that money is for merit pay — the Walton Family Foundation pledged $2 million earlier this year toward a merit pay program in the Rogers School District — but not all of it.
The Care Foundation in Springdale, the third largest grant-making foundation in Arkansas with $144 million in assets, has made $30 million in grants since 2000, more than half of which has gone to public school education in Northwest Arkansas. An operating foundation of the Northwest Arkansas Community Foundation created in 1998 with hospital conversion funds, Care initially did open grant-making, but after a couple of years, executive director Suzanne Ward said, “The board said this is all good, but we'd like to take a couple of issues and dig in.” Applications are now invited.
Grants have gone to public schools for pre-K education, fitness centers, nutrition curricula, programs to help transition from middle to high school to encourage a higher graduation rate and school-based health clinics. Care gave out $2 million in one year alone to ACES (Arkansas Consortium for Employment Success) pre-school programs in Decatur, Gravette and Springdale, and has provided more than $1 million for school-based mental health clinics in elementary schools in Springdale, Bentonville, Decatur, Gravette and Siloam Springs.
Thanks to Care, kids at middle schools in Springdale and Bentonville have access to mountain bikes and stationary bikes and climbing walls, kids in Eureka Springs are learning how to eat well and even cook and an International baccalaureate program is going into elementary and middle schools in Springdale and Bentonville.
Other public school gifts include $1 million Pete and Pat Allen pledged to the Siloam Springs School District for a new elementary school and more than $480,000 Olds Foundation gave the Centerpoint School District to buy land for its FFA farm, farm equipment, bleachers, lockers and scholarships.
The University of Arkansas had another banner year, recording its greatest one-year leap in endowment holdings since the Waltons gave it $300 million in 2003. The UA Fayetteville endowment now stands at $876.8 million, $100 million more than in the 2005-06 fiscal year. The university's goal is to reach $1 billion in endowment funds by 2010.
The University of Arkansas Foundation's largest gift came from the Trinity Foundation of Pine Bluff, $6 million for the School of Engineering.
The University of Arkansas for Medical Sciences had a healthy year, with gifts exceeding $100,000 from foundations and individuals totaling $33 million (compared to $15 million in all foundation giving in 2005). Its largest donation came from the Winthrop Rockefeller Foundation, which gave $12 million to fund the creation of a new leukemia and lymphoma program. The gift honors the late Lt. Gov. Winthrop Paul Rockefeller, who died of a rare blood cancer that fell outside UAMS' expertise earlier this year. The Arkansas Cancer Research Center was renamed the Winthrop Paul Rockefeller Cancer Institute.
The Donald W. Reynolds Foundation, headquartered in Las Vegas, gave $14.5 million to Arkansas State University in Jonesboro to build a health sciences center.
Outside the UA system, John Brown University, the University of the Ozarks and Harding University divided up the Walton International Scholarship giving, each receiving more than $11 million. The University of Central Arkansas at Conway received its largest gift ever, $3 million from the estate of Mary Ellen White Crow and Jake Crow of Elaine.
The sums that operating non-profits (like the University of Arkansas Foundation or the Harvey and Bernice Jones Center for Families) and family foundations pay to their trustees for services rendered became a key target of charity reformers after reports of egregious compensation surfaced in the early 2000s. These included news stories on Paul Cabot of the Boston Cabots (the ones who speak only to God), who paid himself $5 million over four years in compensation for his role as trustee of the family foundation, and St. Paul's School in Massachusetts, where parents howled over the headmaster's $524,000 salary (he was also provided a 14,062-square-foot mansion) and perks given the vice rector, including a membership to the Canyon Ranch spa and a two-week trip to the south of France. The year previous, the Bielfeldt Foundation in Illinois paid $3 million in management fees to the family and its firm, but only $1.2 million in grants.
A Harris poll taken in 2006 found that only one in 10 Americans believes that charities are ethical. Earlier this year, Sen. Charles Grassley of Iowa (not to be confused with Richard Grasso, who paid himself $190 million over eight years to head up the technically nonprofit New York Stock Exchange) urged the Internal Revenue Service to update the 990 tax form that operating and grant-making non-profits use to report expenditures. In response, the IRS is overhauling the form to require more detailed reporting on compensation.
Aaron Dorfman, head of the National Committee for Responsive Philanthropy, said more transparent reporting — including what exactly the directors and trustees do to earn their pay — would be a boon to the press and others who act as foundation and charity watchdogs. (The IRS lacks the manpower to review the tax forms itself.)
In assembling information from tax forms filed by the state's grant-making foundations, the Times this year includes compensation amounts to trustees, officers and board members. Numbers alone don't tell the story — which is why Congress wants the IRS to demand more details. In cases where the trustees were paid a more than nominal sum (many pay themselves nothing), they may have been providing professional services. For example, David Frueauff, president and trustee of the Charles A. Frueauff Foundation, the fifth largest in Arkansas, works full-time at the foundation and manages its equity investing, his accounting firm said; he is paid $128,000. Total compensation to the foundation's trustee/employees was $523,000; the foundation paid out $5.1 million in grants. In comparison, the Stella Smith Charitable Trust (15th in assets) paid nearly $150,000 in compensation and paid out $707,000 in grants.
The Willard and Pat Walker Charitable Foundation, the 10th largest Arkansas grantmaker, which gave away $15 million, listed its compensation as $58,000. It paid nearly $1 million, however, in operating expenses, compared to Frueauff's $427,000.
The Charles and Joan R. Taylor Foundation Inc., ranked 13th, is the largest family foundation in Arkansas to provide no compensation to its trustees or officers. The Trinity Foundation was the biggest grantmaker to pay no compensation.