November 7, 2003
Kroc leaves $200 million gift to NPR
By JOE CANTLUPE
COPLEY NEWS SERVICE and
By Jeff McDonald
WASHINGTON – Joan Kroc's passion for the news and her support of KPBS, the local public broadcasting station, inspired her bequest of more than $200 million to National Public Radio, helping secure the future of the independent radio voice.
NPR, the multiple award-winning news organization that barely a decade ago was scratching for every nickel it could find, received the windfall yesterday with no strings attached.
The huge donation stunned NPR officials, who called it the largest cash award ever presented to a U.S. cultural institution and said it was more than double the organization's annual budget.
"We are inspired and humbled by this magnificent gift," said Kevin Klose, the NPR president.
Kroc, a well-known philanthropist who gave to the poor and the sick, to the aged and the hungry, was diagnosed with inoperable brain cancer earlier this year. She was 75 when she died Oct. 12 at her home in Rancho Santa Fe.
True to character, the intensely private widow of McDonald's Corp. magnate Ray Kroc kept her sickness hidden from all but those who were closest to her.
Last spring, Kroc began arranging to shore up many of the organizations and institutions to which she had given so much. Among other things, she gave valuable sculptures from her residence to two of her favorite charities.
In the weeks since she passed away, Kroc's estate has confirmed a pair of $50 million bequests to peace institutes at the universities of San Diego and Notre Dame. Earlier this week, the San Diego-based public radio station KPBS was given $5 million.
"She was a big fan of the news," said Dick Starmann, a spokesman for the Kroc estate, which was estimated to be worth $1.7 billion at the time of her death.
"She had an unusual interest in what was going on in the world," he said. Kroc "liked NPR's unfiltered presentation of the news."
Accepting such a large donation comes with a lot of responsibility, nonprofit experts said. Charity executives should develop a strategy to invest the money wisely – whether they choose to expand existing programs or to beef up endowments.
"The most important thing is to develop a really careful financial management plan for the funds," said Pat Libby, who runs the Nonprofit Leadership & Management Program at the University of San Diego.
"You can't let it go to your head. It's very important to get people who have experience dealing with very large amounts of money."
NPR was at a loss to say what it might do with the donation, one of the largest publicly announced gifts in recent years. But NPR president Klose said most of the money would be invested rather than spent.
"Mrs. Kroc supported KPBS and by extension became deeply interested in NPR," said Klose, who added that the radio network has about 22 million listeners and raises most of its money through donations and government grants.
The eventual amount of the bequest will depend on the resolution of the Kroc estate and the value of her investment, according to NPR officials.
Most of the gift will become part of an endowment created 10 years ago to guard against periodic drops in revenue. Including the Kroc donation, that fund balance will now exceed $225 million, NPR said.
"It is no secret that these have been challenging economic times for public radio, a challenge that is still unmet," Klose said, pointing especially to the needs of its member stations.
Best known for daily news staples such as "Morning Edition" and "All Things Considered," NPR also presents a variety of music and cultural programming.
In San Diego, KPBS produces current-events programs such as "These Days" and "The Editors Roundtable" and feature shows like "A Way with Words" and "The Lounge."
Starmann said Kroc became hooked on KPBS years ago and began giving to that station, which is on the San Diego State University campus. The relationship she cultivated with KPBS led to her decision to bestow $200 million to NPR, he said.
"If she believed in an organization and its mission, and liked the people, that was real important to her," Starmann said.
A private company that counts some 750 independent radio stations as members, NPR receives between 1 percent and 2 percent of its annual budget as grants from federally funded organizations.
Since her husband died in 1984, months before his San Diego Padres played in their first World Series, Joan Kroc has given away hundreds of millions of dollars.
After that World Series appearance, Joan Kroc sold the team and began donating her millions – most often quietly and sometimes anonymously.
In the 1980s, Kroc agreed to pay $18.5 million to build the San Diego Hospice overlooking Mission Valley. She built a homeless shelter downtown and later gave more than $50 million to the Ronald McDonald Charities.
Roughly five years ago, she spent $30 million to build and endow the Joan B. Kroc Institute for Peace and Justice on the USD campus – a think tank dedicated to world peace. A similar institute operates in Indiana, at Notre Dame.
About the same time, Kroc approached the Salvation Army about building a massive community center to serve underprivileged communities in San Diego.
The resulting $90 million donation was the largest gift ever presented to that charity. The arts, recreation and education center in Rolando now draws thousands of visitors every week.
Kroc's $200 million gift to NPR is among her biggest donations and is one of the largest gifts ever bestowed by a San Diego County resident. Irwin and Joan Jacobs last year pledged $120 million to the San Diego Symphony.
Bill Gates of Microsoft has given more than $20 billion to various causes over the years, and many philanthropists have given hundreds of millions of dollars in specific chunks, some even anonymously.
Nonetheless, the size of the NPR bequest from Kroc was stunning. Many public radio hosts are more used to listener fund-raising drives than they are to being handed money without asking.
"I was nearly speechless. That's a dangerous state for someone in my line of work," said Susan Stamburg, an NPR announcer for 30 years who thought back to when the station was $9 million in debt in the 1980s and was forced to rely on collection buckets for "nickels and dimes."
Rep. Earl Blumenauer, D-Ore., who helped organize the Congressional Public Broadcasting Caucus, a group of legislators who support NPR and other public broadcasters, praised the donation from Kroc and said it would solidify NPR's standing.
"This is the closest we've come to a true national voice," he said of the public radio station. "This could not come at a better time."
Stephanie Bergsma, an associate manager of development at KPBS, was a friend to Kroc for some 20 years. She said the gift will secure the future of NPR and help strengthen the partnership between NPR and her KPBS.
"It makes an incredible statement, from a really important, thoughtful, dedicated philanthropist, about how much she valued what we do, and I think it's going to be a lifeline for many people," Bergsma said.
"She wanted to make a difference in the biggest possible way. She embraced hope for the future. It's a gift that will truly live forever."
Additional donations from the Kroc estate will be announced in coming weeks, Starmann said, but he declined to say which charities may receive some of the money.
"There are going to be more coming in San Diego," was all he would say.