The New Philanthropists
Profiles of Leaders in Minnesota's Philanthropic Resurgence

If you mention the world "philanthropy" in Minnesota, the names that first come to the minds of many are ones like Dayton, Pillsbury and McKnight — families who started the state's philanthropic traditions as far back as the turn of the century. But the past decade has seen the emergence of a new generation of philanthropists in Minnesota who, while not yet household names, are making important contributions to the state. Unlike those who established foundations after their deaths through bequests, these new philanthropists have started foundations while they are very much alive.

There are many signs that Minnesota's new philanthropists are helping lead a resurgence in philanthropy in the state, spurred on by strong corporate profits and the 1990s surging stock market. Consider the following:

• Almost 300 new foundations were formed in Minnesota between 1995 and 1997 — three times the number created in the previous two-year period.
• This year the Minnesota Keystone Program has recognized 252 companies in the state for contributing between 2 and 5 percent of their pre-tax earnings for charitable purposes, up from 184 companies in 1994.
• There are signs that individual giving, too, continues to grow. Minnesota taxpayers increased their charitable contributions more than 9 percent between 1995 and 1996. And total contributions to the state's six largest United Ways, much of which comes from individuals, increased more than 7 percent last year.

Who are the new philanthropists behind Minnesota's recent giving growth? To help answer that question, Giving Forum profiles three people who made some of the largest charitable contributions in the state in the past year — Robert Buuck, Eugene Frey and Bill George. Buuck awarded $2.5 million to the University of Minnesota's Carlson School of Management. Frey donated approximately $25 million to The Saint Paul Foundation and $9 million to the Catholic Community Foundation — the largest single gifts either organization had ever received. George gave the United Way of Minneapolis Area its largest-ever contribution of $1 million.

Robert Buuck
An Entrepreneur's Philanthropy

Robert Buuck is an entrepreneur at heart. In 1972, he co-founded American Medical Systems (AMS), a medical device company specializing in implants for urology, which he sold to Pfizer in 1985. In 1994, he co-founded Iotek, a drug delivery company, and is its chairman today.

The value of Buuck's stock holdings grew significantly over the past ten years, to the point where Bob and his wife, Gail, found themselves with more wealth than they'd ever expected to have. The Buuck family decided to use their wealth to help others, and in 1994 established the Buuck Family Foundation. "We saw a foundation as the best way to bring some structure and formality to our gifting," Buuck says.

The Buuck Family Foundation has assets of approximately $10 million, and in 1999 will award about $500,000 in grants. The foundation focuses primarily on supporting education (financial aid and scholarship programs), social and community programs that help break the cycle of poverty, and programs that serve the physically challenged.

The same entrepreneurial drive that Buuck brought to his companies also drives his philanthropy. Since he came from humble beginnings himself, working hard to put himself through college, he is particularly interested in funding organizations whose clients are actively involved in helping themselves. "We are drawn to organizations where the recipients of charity have to put something back into the community," he says.

Much as he's enjoyed being intimately involved in his new business ventures, Robert Buuck also likes to have some firsthand involvement, to the extent possible, with the organizations he funds. He spent many months helping the Carlson School reshape its Entrepreneurial Studies Center, for example, before he gave $2.5 million to help with the center's expansion. "We didn't just passively write a check," he says.

Buuck says he didn't want to wait until he died to leave a significant portion of his assets to charity, but wanted to be involved with it now. "We used to think that in our will we'd leave some money to a few good organizations and that would be nice," he says. "But we decided that we wanted to be able to enjoy our giving and see the benefit of our gifts during our lifetime. Why do it after you're dead, when you can't appreciate it and help shape its direction and impact?"

Bob says he and Gail have found the process of establishing and running a foundation both rewarding and challenging. "It's taken more time than we had originally anticipated," he says. "We're finding it an engaging process to channel our gifts wisely."

Another challenge for the Buucks is to get their adult children more involved in the foundation's work. Perhaps because of the Buuck's relatively young age (Robert is 57; Gail, 56), their children don't see any great urgency to be as active in the foundation as their parents would like them to be. To encourage that involvement, the children each have a small pool of foundation funds to award as they wish, and they are starting to participate in site visits.

"We want to engage our children in the process of gifting and in the stewardship of the family's assets," says Buuck, "to help us transition to our family's next generation."

Eugene Frey
Supporting What Is "Closest to Us"

Eugene Frey's own life experiences have played a major role in guiding his personal philanthropy. The Freys' $25 million gift to The Saint Paul Foundation, for example, was influenced in large part by the fact that the city of Saint Paul is the home of Waldorf Corporation, where Frey, 68, spent his entire career and made his fortune. The gift was Frey's way of saying "thank you" to the city. "We want to advance the quality of life in this area," he says.

Frey joined Waldorf as a sales trainee in 1954. He moved through the management ranks of the company, which makes folding cartons and recycled paperboard, and became its president in 1985 after leading a leveraged buyout. The Freys became the sole owners of Waldorf in 1994, and last year sold the business to Atlanta-based Rock-Tenn Co.

The Freys established the Frey Foundation in 1987. The foundation awarded $250,000 in grants last year. All of the Freys' charitable giving — whether through their foundation, their donor-advised funds at The Saint Paul Foundation and Catholic Community Foundation, or their individual donations — falls into three general areas: education, human service and disability issues. "We focus on those things that are closest to us - the events in our lives," says Frey.

The Freys' interest in human service stems from Mary Frey's many years of volunteer work with Catholic Charities. Disability issues are close to the family's heart because the Freys' oldest son, Jim, is a paraplegic as the result of a car accident. And their focus on education is rooted in Eugene Frey's longtime involvement with the University of St. Thomas, and in his belief that education is "paramount for people bettering their lives." Frey is a St. Thomas trustee, and is heading up its current capital campaign.

The Freys' three adult children are deeply involved in the running of the family's foundation, as are their spouses. Like the Buucks, the Freys have found it a challenge to operate a foundation, and have sought outside consultants for help. "While it's difficult to make money, it can be equally difficult and time-consuming to do a quality job of giving it away," Frey says. "But I think you have an obligation to do something when you have the means to do it."

And the rewards are well worth the effort, he adds. Frey's advice to others who are considering getting more involved in philanthropy: "Dive in and do it. Don't give it to someone else to do. Do it yourself."

Bill George
Giving Back to the Community

Bill George recalls how he and his family moved to the Twin Cities in 1969 without much in terms of wealth. Today, as chief executive of Medtronic, a Fridley-based medical technology company, George finds himself in a much different situation, and he's giving back to the community that has helped him succeed. "I think society is best served if people who are fortunate enough to be successful pass it on to others," he says.

George, 56, established the George Family Foundation four years ago through donations of Medtronic stock. He is involved in the foundation with his wife Penny, and their two sons, Jeff and John. The foundation's assets stand at about $10 million, and the Georges are in the process of working with a consultant to help them refine and focus the foundation's giving. Although that process is not yet complete, George says their foundation will likely have at least two primary areas of interest: whole life healing and youth development.

Whole life healing has become an area of intense personal interest for the Georges in the past few years, as Penny has been recovering from cancer. Their interest in youth development comes from their many years of involvement in the area. Through her work as a psychologist, Penny has aided the career development of young people. And Bill has worked as a volunteer with youth in many capacities, including as a soccer coach for 13 years.

George says he prefers to fund programs instead of capital and endowment activities, because he can see the results now. "With capital and endowment activities, you only see the use of about 5 percent of your funds each year," he says. "We'd rather see all of the funds being used today."

Making an impact today is a driving principle for the Georges' philanthropy, which is why Bill and Penny don't plan to leave a large amount of wealth to their children. "We're supporting their education, but after that they know they're on their own," George says. "They're not looking to inherit anything." The Georges have sat down with their sons to discuss this issue, and all agree it is the best course to take. Says George: "If our dollars can go to correct society's problems now, it can do a lot more good than if it sits in a estate."

Continuing the Tradition

Although the giving stories of Bill George, Eugene Frey and Robert Buuck are different, they are remarkably similar in several ways. Each of these new philanthropists expresses a desire to give something back to the communities that played a major part in their success, and to do so in a way that is thoughtful and connected to their life experiences. Perhaps because of their many years in the business world, they also share a desire to see real results from their philanthropic efforts; to make a difference - now, not later - in improving people's lives.

Each of these new philanthropists and their families have begun making their own marks in shaping and sustaining a philanthropic culture begun by Minnesota's founding families. George says his own philanthropic interests have been greatly influenced by the philanthropy of local community and corporate leaders, both past and present. He cites former Medtronic CEO Win Wallin as an important role model, as well as families like the Daytons. "We can learn a lot from these families that have done so much in our community in the past," George says. "They've definitely passed on that sense of responsibility to the community."

Side Story
New Philanthropist Profile: Janet Watson

Minnesota resident Janet Watson has a house in Arizona that she rarely uses, so many years ago she started opening it up to friends. There was just one problem: her friends continually insisted on paying rent for their use of the house, and she continually refused to accept it. "I didn't want to become a landlord," she says. Then Watson had an idea: instead of paying her rent, she asked her friends to give the money to a charity of her choice.

But as more and more of her friends made use of the house to escape Minnesota's harsh winters, the donations got more difficult to manage. So Watson established a donor-advised fund at the Minnesota Women's Foundation, a public/community foundation focused on the needs of women and girls. All the rent checks now go into the fund, "and I can take my time in deciding where I want the money to go," Watson says.

The 77-year-old Watson is full of innovative ideas for supporting her favorite charitable causes. One of her favorites is to sign her social security checks over to charity each month. "I'm trying to get others to do this, but haven't been successful yet - everyone looks at me like I'm nuts," she says. "But I know there are others out there who don't need those checks."

When deciding where to give, Watson says an important factor for her is being able to trust the people running the organization, which is one reason she chose the Minnesota Women's Foundation to house her fund. She also prefers to support smaller, grassroots groups. "I'm not a big donor; I couldn't put my name on a building. So I give to smaller organizations, where my contribution is going to make a great deal of difference to them."

Side Story
New Philanthropist Profile: Paul White

When Paul White and his business partner, Earl Rasmussen, started their metal stamping and fabrication business, BTD Manufacturing, Inc., in 1979, they wanted to create a company unlike most they had worked for in the past. "Our goal was to start a company that would always remember its most important asset: its people," White says.

White and Rasmussen created a "sharing pyramid" to guide them in how to use the net profits of their fledgling company, based in Detroit Lakes. At the top of the pyramid is the reinvestment of a percentage of profits back into the company, so that it can continue to grow. On the second level is charitable contributions to help people in need. Next comes employee profit-sharing, followed on the fourth and final level by performance incentives for the company's management team.

It wasn't long before BTD was profitable enough to reach the pyramid's second level and begin giving to charitable causes. By 1988, the company's giving program had grown to the point where White and Rasmussen decided to establish the BTD Manufacturing Foundation at West Central Initiative, a community/public foundation in Fergus Falls, so that BTD could provide a more stable source of charitable funds from year to year. The foundation awarded more than $75,000 in grants last year.

"The challenge for Earl and I is the company's day-to-day operations, and the money is like baggage: it just comes along with it," says White. "Our goal in life is not to say 'we have to make X number of dollars.' Our goal is to keep our employees as our number one asset, create opportunities for them, and be able to share some of the profits of BTD with others who are in need. Our sharing of dollars with others is one of the most rewarding experiences that a person can have."

Three years ago White also decided to establish his own donor-advised family fund, the White Family Foundation, at West Central Initiative. He says he started the fund so that his family could "work together and communicate with each other, and gain a better understanding of ourselves and our Christian values."

White's philanthropic interests are driven in large part by his belief that people with wealth are merely stewards of those dollars on behalf of God. "God gave each of us specific gifts and talents," he says. "If we use these talents in earning dollars, then we need to share those dollars with others."

Copyright 1998 Minnesota Council on Foundations
Reproduction in any form without the written permission of the publisher is prohibited.

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