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The American Swedish Institute in Minneapolis stands to benefit from money that will flow to the Anne Ray Charitable Trust.
Ho, Photo courtesy of American Swedish Institute
Cargill Foundation to get big-bucks boost
- Article by: JEAN HOPFENSPERGER
- Star Tribune
- January 24, 2011 - 11:09 AM
After years of waiting, a stock deal is finally freeing up the money that will make the local Margaret A. Cargill Foundation one of the nation's biggest philanthropies, the donor of millions of dollars in Minnesota and across the globe.
A business move announced by Cargill Inc. last week means the foundation and a sister philanthropy -- Anne Ray Charitable Trust -- could split an estimated $8 billion.
That transforms the Margaret A. Cargill Foundation into one of the nation's 15 biggest foundations by assets and makes it at least twice the size of Minnesota's next-largest foundation, the McKnight Foundation.
The foundation finally can ramp up its grant-making for environmental programs, arts and culture, and "relief, recovery and development" -- top priorities as it flings open its doors. Although its vision is global, Minnesota will usually get a slice of program funding, staff said.
"Since 2006 [when Margaret Cargill died at age 85] it's been --'When can we actually start making grants?'" said Sallie Gaines, foundation spokesperson. "Just knowing we will be able to burst forth from the starting line is really exciting."
The Cargill heiress' fortune had been tied up in stock in the private company founded by her grandfather, and it could not be publicly traded. But the Cargill company's decision last week to divest its stake in local fertilizer giant Mosaic Co. was designed to free up cash for Margaret Cargill's trusts.
Her Cargill stock will be swapped for Mosaic shares, which are publicly traded and therefore easily converted to cash. At today's market prices, those shares are worth about $8 billion, of which $4 billion will go to the foundation.
"We will finally have the cash to fulfill Margaret's vision," Gaines said.
To put those assets in perspective, only eight foundations in the nation have $5 billion or more in assets.
While Minnesota nonprofits are likely to benefit from the foundation's stepped-up grantmaking, one stands out in particular. The American Swedish Institute in Minneapolis is particularly well-placed. It is one of about a dozen nonprofits funded by the Anne Ray Charitable Trust, a separate philanthropy founded by Margaret Cargill in 1996 that is slated to receive $4 billion.
Cash-strapped charities across the nation, and the globe, have been watching the foundation with interest, Gaines said. Nowhere is that more true than in Minnesota.
"People have been waiting with great anticipation," said Kate Barr, executive director of the Nonprofit Assistance Fund of Minneapolis. "There's been a sense of, 'Come on. There are so many needs in the community. This is an opportune time for some bold new leadership.'"
Giving away a fortune
Before Margaret Cargill died, she left behind specific instructions for how her fortune should be spent. Guided by those instructions, the foundation made about $5 million in small grants in 2009, Gaines said. Now it's gearing up for its first significant global projects.
It purchased an office building for its headquarters in a quiet, wooded area of Eden Prairie and decorated it with pieces from Margaret Cargill's private art collection. It hired program directors and other staff from around the country.
Staffers were told to think big, Gaines said, to pinpoint the most pressing needs on the planet and to narrow them to needs that haven't yet received much assistance. For example, teams flew to Alaska to examine projects preserving American Indian art and culture, and to Asia to investigate environmental needs.
"Margaret wanted to improve the lives of the maximum number of people," Gaines said.
The foundation chose three focus areas for starters, Gaines said. It plans to start awarding grants later this year. They are:
•Environment: Priorities include conserving tropical rain forests, reducing greenhouse gas emissions and keeping boreal forests intact.
Closer to home, a "connect youth with the outdoors" project could include funds for Minnesota groups starting in about two years, she said.
•Arts and culture: American Indian arts and culture, in particular programs to help preserve dying art forms, are at the top of the list. The foundation first will focus on the Pacific Northwest, followed by the Southwest and then the Upper Midwest. Minnesota projects could be part of the third round of funding likely to begin in 2012 or later, Gaines said.
Scholarships, K-12 teacher training and other avenues to train a new generation of artists will be considered, Gaines said.
•Relief, recovery and development: International in scope, it includes a Midwest Disaster Preparedness program to provide disaster relief funds for Minnesota and surrounding states.
But most of the funds will be used to respond to earthquakes, floods and other natural disasters across the globe, projects to prevent similar disasters in the future, and regional development. That includes support for sustainable agriculture to help farmers improve production.
In the next few years, the foundation also will set up programs for animal welfare, children and families, and elder care.
"Margaret was concerned to see elderly people who did not have strong support systems or ready access to quality care," Gaines said.
Waiting for news
Local nonprofits have eagerly awaited news about Cargill's agenda, Barr said. They've had mixed expectations.
"Some people think this will be a giant rock candy mountain for Minnesota," Barr said. "Others think there is a secret door [to getting the grants]. So it's important that they know what to expect, and if there is an entree [to getting grants], what it is and what it is not."
Meanwhile, the American Swedish Institute, the only Minnesota recipient of the Anne Ray Charitable Trust jackpot, already is discussing future projects with the organization, said Bruce Karstadt, institute president. The institute is likely to request funds for its community outreach programs and for construction of its new cultural center, said Karstadt, adding, "We're excited and grateful."
Margaret Cargill's support for the institute began with its exhibit of textiles made by a close friend and teacher, Hilma Berglund, who had died. Cargill made an anonymous donation for that exhibit, held in the 1990s, and the relationship grew, Gaines said.
Other groups eligible for trust funds include the Nature Conservancy, the American Red Cross and the YMCA of the USA.
Gaines said the deal announced last week was among many options discussed over the years to liquidate Margaret Cargill's assets. The exact value of last week's deal will depend on the value of Mosaic stock on the date the transaction closes and on the dates of other stock sales that will take place during the next 4 1/2 years.
"Uncertainty can be unsettling," Gaines said. "This makes it clear we will be moving forward with all the programs we envisioned."
Jean Hopfensperger • 612-673-4511
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