The Legacy Continues

Minnesota legacy families maintain their dedication to local philanthropy

By Kevyn Burger
Friday, April 22, 2016

From its arts institutions, to its educational landmarks, to its medical facilities, to its innovative social programs, life in Minnesota has long been enhanced by a practice of generosity established by some of its wealthiest residents and best-known corporate citizens.

“We are fortunate to have some strong legacies here that continue to enrich our community,” says Jeremy Wells, vice president of Philanthropic Services at Minnesota Philanthropy Partners, a network of foundations, funds and organizations that promote charitable giving. “Giving is deeply instilled in our culture.”

The Minnesota Council on Foundations’ most recent Giving in Minnesota research calculated that individuals, foundations and corporations gave $5.7 billion in 2012, representing a 3% hike in total giving over the previous year.

There’s a long precedent for that level of funding, which is the envy of many other communities. In 1976, 23 business leaders set up the Five Percent Club for Twin Cities corporations that committed to donating 5% of their pretax income. Now known as the Minnesota Keystone Program, the club today lists almost 300 civically engaged member companies of all sizes, each committed to contributing 2-5% of their pretax income.  

“The early families created the philanthropic tradition that the Twin Cities is applauded for all over the country,” says Jean Sazevich, a former philanthropic advisor with the Minneapolis Foundation. “Some families who no longer have permanent residences in Minnesota still feel obliged to carry on the tradition of giving here.”

The practice of sharing the wealth may be contagious. In addition to families who earned or inherited vast fortunes, the state’s small family foundations have become a significant segment of Minnesota’s institutional philanthropy. In 2011-2012, these foundations collectively gave more than $91 million in grants.

“Families now have brands, and they are able to extend their legacy through social ventures and causes,” explains cultural historian Larry Samuel, who has studied the habits and behavior of the wealthy on behalf of JPMorgan. He is the author of Rich: The Rise and Fall of American Wealth Culture.

“Institutions are heavily dependent on this giving. They would have to get many, many individuals to match the dollar volume of these big donors,” he says.

Samuel, who holds a Ph.D. in American studies from the University of Minnesota, coined a term for philanthropists who come from established wealth: he calls them “Willionaires,” to distinguish them from their archetypal new money counterparts, who may be “Thrillionaires,” the spenders who love luxury and first class, or “Realionaires,” the humble self-made types who prefer to steer clear of the trappings of affluence.

“Old money gives back, not just to their families but to the community,” he says. “Individuals feel they are the caretakers of the generational wealth that came before them and will follow them. They will often say that they don’t own those resources, but they have the responsibility to use them wisely.”

Philanthropy is changing, with today’s younger donors seeking more than the family name on a wing of a hospital or a campus building.

“We’re seeing a major shift in the next generation. When wealth is transferred, family members have to really think about what’s important to them,” says Nancy Henkin, Ph.D., a Philadelphia-based consultant who works with philanthropists. Last year, she presented her theories on intergenerational giving to a group of foundation leaders at a workshop convened by Minnesota Philanthropy Partners.

“In the past, philanthropists donated because they were civic minded and it was their duty. They built institutions,” she says. “The paradigm is shifting. Younger people are more committed to causes that can change the world. We see them volunteering and wanting hands-on engagement. They have skills and they want to partner with organizations that have personal importance to them.”

That’s a trend that Tim Thorpe is witnessing.

As president of the James R. Thorpe Family Foundation, he’s part of an organization that gives money away, and has seen his board dive deeper with its partner grantees, with a new emphasis on seeing results. As executive director of the nonprofit Pathways, a health crisis resource center in Minneapolis, he meets with donors to solicit gifts.

“I’ll sit down with 80-year-olds who have regularly contributed and they say, ‘I trust you, you decide what to do with the money,’” he says. “Incoming funders tend to be more interested in specific programs that they care about; they may want to create and fund something new within the organization.”

The next wave of Minnesota philanthropy will depend on wealth continuing to accumulate in the region; that’s what will create the deep pockets that will fund the needs of the future.

“I would love to see more investment in the entrepreneurs who will be responsible for business development, the folks who can make a huge difference,” says Jeremy Wells. “Look at the wealth accumulated by one company, 3M; $7 to $10 billion in foundations and funds were created by heirs to and employees of the 3M fortune alone. Where’s the next one? We need to figure out how to encourage the heck out of the people who can build these businesses.”

Erika L. Binger
McKnight Foundation

Erika L. Binger knows how to go the distance.

As a former triathlete, she’s completed dozens of marathons and other long distance competitions, winning multiple national and world championships in the triathlon and duathlon. She is currently training as an aquathlete.

“Training and competing has given me a sense of knowing that when I put my mind to something, I can finish it,” she says.

As a philanthropist, the 43-year-old Minneapolis resident sits on the board of directors of the McKnight Foundation. With assets of $2.1 billion, it’s one of the nation’s 50th largest family foundations. It was founded in 1953 by her great-grandparents; her great-grandfather William McKnight started working for 3M in 1907 and rose through the ranks to spend over a decade as its president and chairman of the board.

“When they established the foundation, they wanted it to maintain a Minnesota-based focus. My great-grandfather was a firm believer in innovation,” she says. “We have carried on like he would have wanted us to. Today we want to work collaboratively with those closest to the issues. We trust them to lead us to solutions.”

The patience that Binger developed working on her long game comes into play with her personal philanthropy work. She’s turned her attention to some of Minnesota’s most intractable social problems, including generational poverty, the racial achievement gap and how to establish new pathways to opportunity for underserved communities, especially its youngest members.

“My desire to work with youth is something God placed in my heart,” Binger says, noting that she volunteered as a teaching assistant, tutor and coach during her years at high school to just after college. “In order to have long-term impact, you have to be committed to your path and your vision.”

While the foundation has power and influence, Binger takes a low profile approach when meeting with grantees or deliberating about how to maximize her impact as a philanthropist.

“I’m a good listener; it’s in my nature. I listen and reflect, I think about things. I seek people out to learn from. With technology, I think you can miss something without making time for the face-to-face.”

Independent of the foundation, Binger founded the V3 Youth Triathlon Team, now V3 Sports, which provides urban youth in Minneapolis with opportunities to train and participate in triathlons at the same time as they learn about nutrition, leadership and character development. The nonprofit is currently in the process of raising funds for its own year-round training complex for the community.

“What I enjoy most is seeing transformation in people’s lives, seeing their dreams realized. I like to see impact on issues,” she says. “It’s a blessing and honor to do what I do.”

John Larsen
John Larsen Foundation

In his career as a residential building designer, John Larsen helps families build homes.

That’s something he has also done as a philanthropist, funding a cause that has brought deep meaning to his personal life.

Larsen, 46, has been the board president of the John Larsen Foundation for the past eight years. The family foundation carries the name of his father and grandfather, who was one of the first salesmen for Deluxe Corp., founded over a century ago as a check printing company in St. Paul.

The members of Larsen’s nuclear family — his parents and sister — are the other trustees of the consensus board, supervising an endowment that gives 5% of its assets away.

“There are many facets to leadership, but what’s important to me is that I have to walk the talk,” he says. “I want to make sure my life is in alignment with the social causes I support. With our donations, we follow the passions of our board members.”

Larsen often seeks a personal connection to the causes and nonprofits that the foundation funds. For many years, the foundation contributed to Avenues for Homeless Youth, a Minneapolis-based nonprofit that helps young people get off the street.

Six years ago, Larsen and his partner (now husband) welcomed a teenaged girl to their Lake of the Isles residence though the agency’s GLBT Host Home program. She’s now in graduate school and the couple remains devoted to her, Larsen refers to her as their ‘foster daughter’ and says the couple is committed to their role as herparental figures.

“We wanted to give more than money,” he says. “It’s been so rewarding to see her find her path and for us to be her dads.”

Larsen is accustomed to following and funding his passion. He co-founded Project 515, a nonprofit formed in 2006 and named for the 515 Minnesota laws that discriminated against same-sex couples. The advocacy organization was on the front lines of defeating the 2012 marriage amendment. It closed its doors when same-sex marriage was legalized.

Today, Larsen and his husband give a significant portion of their annual income to causes they care about. He lists social justice nonprofits, the arts and the environment as the family foundation’s top funding priorities. Larsen believes his many years of service on the board of the Minnesota Council on Foundations helped him learn how to maximize the impact of the foundation’s grant making.

“I want my feet on the ground. We volunteer, we make site visits to our grantees and look at the nonprofits we fund for the impact of the dollars,” he says. “It’s not enough to write checks. I want to see how we can leverage our contributions to influence the bigger dollars, the pot of money that can move mountains.”

Tim and Molly Thorpe
James R. Thorpe Family Foundation

It was in the late 90’s, not long after he graduated from college, that Tim Thorpe asked if he could ‘be a fly on the wall’ at a board meeting of the James R. Thorpe Family Foundation.

“I went to listen. I wanted to learn what it was all about,” says Thorpe, now 59.

Tim Thorpe is a great nephew of James Ruggles Thorpe, who established the foundation in 1974. “Uncle Jim” had been the second-generation president of Thorpe Brothers Real Estate, established in Minneapolis in 1885. A lifelong bachelor, Thorpe invited his nieces and nephews to serve on the board, and left the major portion of his estate to the foundation.

Intrigued by the foundation’s work, Tim Thorpe began regularly asking to sit in on board meetings, and still recalls the day when a middle-aged cousin turned to him to ask, “What do you think, Tim?”

That began his involvement in the foundation, which ultimately led to a board seat and, five years ago, being elected as its president.

“Today, we do site visits for all of the grants we give. That really connects us more closely with our impact in the community,” he says. “Philanthropy opens you to so many aspects of life.”

Now Thorpe’s daughter Molly is near the age that he was when he got interested in the family’s legacy of giving, but she grew up watching her father’s work.

“I think I was 12 when I tagged along with my dad to the Cookie Cart,” says Molly Thorpe, now 27, recalling a visit to when the two participated in the youth employment program in North Minneapolis. “That made a big impression on me.”

The board of the James R. Thorpe Foundation is still made up of the founder’s relatives, but today only one of the original board members is still serving. Younger board members never met the pipe-smoking, outdoors-loving Uncle Jim, who was devoted to causes that benefited Minnesota’s children.

“When thinking about donations, the board could always ask, ‘Is this what Uncle Jim would have wanted?’ but we decided we needed to define that as the torch was being passed,” Tim Thorpe says.

A few years ago, as the board was transitioning to new members, the foundation held what Tim Thorpe called “a facilitated conversation.” At a retreat, they identified programs that serve the elderly and underserved youth as their focus within social services, arts and education for grant-making as they move forward.

“We want to fund what’s practical and relevant,” Thorpe says. 

The Thorpe Foundation’s governing rules require board members to be a descendant (or a descendant’s spouse) of James Thorpe, be at least 30 years old and reside in Minnesota.

Molly Thorpe is already thinking about becoming part of the fourth generation to serve.

“I want to be in on the process of building my own community,” she says. “I’ve seen how philanthropy gives you a stake in the future and a unique opportunity to champion what you believe in. It’s a privilege to have a role in that.”

Barbara Carlson Gage
The Carlson Family Foundation

The Minnesota grandmother once named by Forbes as America’s 12th richest woman often has to rely on her cherished gavel to keep order during meetings of the family foundation that she chairs.

“Everyone has such good ideas and gets so excited about what they’re sharing that I have to bang it to get order,” says Barbara Carlson Gage with a hint of mischief in her voice. “Our family gets very talkative when we’re together.”

Gage’s father, the legendary entrepreneur Curt Carlson, presented her with that gavel when he told her that he wanted her to be in charge of the family’s charitable efforts.

Known for driving a shrewd bargain, Curt Carlson vetted his own daughter before selecting her for the position.

“I had been board chair at Augsburg College. I found out that he questioned them about whether I was a good chair before he made the decision,” says Gage. “I got the job, and I have been so lucky to have it; it’s been the best job in the world.”

Curt and Arleen Carlson had two daughters — firstborn Marilyn Carlson Nelson became her father’s successor as CEO in the family’s privately held global hospitality business. Gage, three years her sister’s junior, has been president and chair of the Carlson Family Foundation.

“I am always learning. I love going on site visits, partnering with projects and strategizing with the people. It’s very exciting to see the projects grow.”

Gage says her father deeply appreciated the affordable college education that he received at the University of Minnesota during the Depression, and made his alma mater a priority during his lifetime.

Mr. Carlson gave the university $25 million in 1986; at the time, it was the largest single gift ever made to a public university from a living donor. In his honor, the business school was renamed the Curtis L. Carlson School of Management.

Beyond its ongoing support of the university, the Carlson Family Foundation has identified education and at-risk youth as funding priorities. Gage speaks with pride of the foundation’s charitable investments in programs that support youth mentoring and address teen homelessness, adolescent mental health and the achievement gap.

Carlson, the parent company of hotel chains Radisson and Country Inn & Suites, has also taken a leadership role in the travel industry in fighting human trafficking.

“It’s very disturbing; the stories I’ve heard would tear you apart,” Gage says. One of her ten grandchildren, still a college student, has gotten involved in anti-trafficking efforts and has presented at a conference devoted to combatting the problem.  

“I am very proud how passionate the next generation is,” she says. “They take a global perspective.”

According to its bylaws, the foundation board is composed of eight board seats that rotate in three-year terms.

This year, the rules will be amended to add two additional seats, designated for members of the next generation — the grandchildren of Gage and her sister.

“They will have to be 21 to be eligible; Marilyn has three grandchildren who are 21 this year and I have two who are 20. We worked with a specialist on family foundations who recommended this approach,” she explains. “We thought long and hard about it. This will be a good way for them to be on the board and learn.”

Some of the youngest family members never knew Curt Carlson, but Gage says his presence is still felt. The foundation meets in what was previously his office in his home overlooking Lake Minnetonka.

“When we’re there we can feel the values and personalities of my dad and my mother. I like to think they would be so proud of what we’ve accomplished,” Gage says. “We’re carrying on.”

Pia Phillips & Abbie Nelson

Pia Phillips and Abbie Nelson hit it off immediately. They recall meeting when they were four years old, both excited about making crafts with the crayon melting machine in their Minneapolis preschool.

A dozen years later, they are still best friends. Today they share the roster on their high school’s tennis team, a love of take-out sushi and walks around Lake of the Isles.

But the teens have more on their minds than sports and their appetites. Their time together is also occupied with thoughts of seriously ill children.

That’s something they know about through personal experience.

“It sounds cheesy, but I have a different outlook now. I cherish life more,” says Phillips, 15, who lost her curly hair during chemotherapy while she was treated at Minneapolis Children’s Hospital for Hodgkins lymphoma in 2014.

One year earlier, it was 13-year-old Nelson who had faced a frightening health setback. She was admitted to Children’s Hospital in St. Paul with mysterious symptoms that turned out to be diabetic ketoacidosis, a serious condition that can lead to diabetic coma. She has since been diagnosed with Type 1 diabetes.

“That was when I realized that not everyone has the love and support that I have,” says Nelson, now 16. “Now I live with something that’s hidden. I learned you can’t make assumptions about people.”

Both girls are daughters of prominent families that each have their own history of philanthropy. Nelson’s parents are Martha Dayton and Tom Nelson, making her a descendant of the storied Dayton dynasty. Pia is the daughter of Karin Phillips and entrepreneur and former CEO of Phillips Distilling Co. Dean Phillips. What the young friends experienced got them thinking about the special needs of other teenagers whose chronic illnesses keep them hospitalized for extended periods of time.

From this, the nonprofit PAB’S PACKS was born; its name is a mashup of ‘Pia’ and ‘Abbie.’ The organization delivers backpacks to teens, stuffed with items that will come in handy — and, more importantly, provide comfort — while they are patients at one of the Children’s Hospitals and Clinics.

“We do a great job with the little ones in the hospital, but teens can get overlooked,” says Martha Dayton, who chairs the board for the organization and is its CIO — Chief Idea Officer. “Once they hear about this, donors get it immediately and want to be involved. The girls tell a good story; they strike a nerve.”

The PAB’S PACKS canvas backpacks contain items including a cozy fleece throw, a stuffed penguin named Pabby, a notebook for jotting down questions — something that Abbie wished that she had during her hospitalization — and a stress ball, which Pia would have found helpful, “to squeeze when I have the fidgets,” she explains.

The backpacks also contain a personal message from the young founders and a postcard for the patients to share their stories. The hospitals keep the backpacks at the ready for patients during their stays. The girls also make regular visits to hand out the goodie bags to pediatric patients.

“That’s the most rewarding part,” Nelson says. “Pia and Abbie have learned at a young age that we can’t control so much of what we face in the world,” Dayton adds. “But we can control how we respond to the hand we’re dealt.”

Although relatively new, PAB’S PACKS has gotten off the ground with support from several foundations and private donors; a part-time executive director has now been hired to allow the organization to expand. The founders imagine that PAB’S PACKS could someday have a national reach. Both girls say they want to stay involved as they move into young adulthood. Their experiences as pediatric patients may influence their professional plans. Pia Phillips says she wants a career in medicine and Abbie Nelson thinks she will find work with children.

Most importantly, both girls have a bright future to plan for. Their story on the PAB’S PACKS’ website notes, “Thanks to the wonderful care we received at Children’s Hospitals Pia is cancer-free and Abbie has her diabetes under control.”