Best Buy’s founder plans to donate about half of his net worth to a family foundation focused on medical research and education.
Richard Schulze, the founder of Best Buy Co. Inc. and its single-largest shareholder, plans to gradually expand the size of his $100 million family foundation to about $1 billion and donate most of the money in hopes of “meaningful, transformational change,” primarily in K-12 education and medical research.
Schulze, 72, said in an interview Monday from his Florida home that he and his wife, Maureen, plan to donate about half their net worth through the Minneapolis-based Richard M. Schulze Family Foundation, which will have a national horizon.
“Our family is feeling good about this,’’ Schulze said. “And I’m prepared to make meaningful contributions. This foundation will be driven by our research … and finding ways to transform [health and education] for the benefit of mankind.”
Dick and Maureen Schulze married after losing their first spouses to cancer and have made medical research at the University of Minnesota and Mayo Clinic a philanthropic priority.
Schulze left the Best Buy board during a tumultuous 2012 that ended with a new CEO and a new rebuilding strategy. After entertaining plans to take the publicly traded big-box retailer private as its stock price drifted to around $12 per share, Schulze made peace with new Best Buy CEO Hubert Joly, whose turnaround strategy has gained traction. Best Buy shares closed Monday at $27.41. The foundation will be funded primarily from Schulze’s holdings in Best Buy.
Schulze said that Mark Dienhart, executive vice president and chief operating officer of the University of St. Thomas, will become chief executive of the foundation on July 1.
Dienhart and Schulze, who will chair a new, independent board that will contain only one other family member, plan to start with a “blank sheet,” Schulze said. That includes hiring staff, commencing research and resuming grant-making activities.
The foundation has been largely dormant in the months since Nancy Tellor, one of Schulze’s children, left the foundation to live in another state.
Schulze, a St. Thomas trustee and one of the university’s largest donors, started talking to Dienhart about the foundation job after the St. Thomas board selected Julie Sullivan, an administrator at the University of San Diego, to succeed the retiring Rev. Dennis Dease as St. Thomas president. Dienhart, 59, was a finalist for the presidency.
For the last decade, Dienhart served as the university’s No. 2 executive and oversaw unprecedented growth at Minnesota’s largest private university and directed a $515 million capital campaign for buildings, faculty and scholarships.
Dienhart, a former athletic director at the University of Minnesota, said Monday that he remains a loyal St. Thomas alumnus and that he looks forward to working with Schulze on his “ambitious plans” for the foundation.
Schulze said he expects Dienhart to research the foundation’s priorities and make grant recommendations to the board that will be monitored and measured for impact.
“Mark is a high-quality executive and has an opportunity to explore these areas,” said Schulze, who said he also likely will continue to give to St. Thomas, where the Schulze School of Entrepreneurship within the Opus College of Business is named for him.
Bill King, president of the Minnesota Council on Foundations, called the Schulze plan “exciting” and a growing trend among affluent business executives and retirees who don’t want to leave it all to their kids.
“We see a lot of CEOs who have figured out how much is enough, how much do we give to the kids and other family members,’’ said King. “They are using some of their wealth to grow their foundations in their lifetimes. It used to be about endowed foundations after death. You can do a lot more with large grant-making. You can really pick a focus as the Schulzes are doing and really try to move the needle on what they care about.”
Earlier this year, Schulze was named chairman emeritus of Best Buy and given an office at headquarters. Two of his closest advisers, former Best Buy executives, were named to the board to represent Schulze’s 20 percent stake in the company, worth about $1.94 billion.
Schulze said he’s pleased with Joly, who was hired away from Carlson, and that he speaks with the Best Buy CEO regularly about the company.
“We have a healthy engagement with Hubert and speak with him two or three times a week,” Schulze said. “We’re feeling good about our place and space at Best Buy.”