Public radio gets bequest of more than $200 million

Donation is from widow of McDonald's founder

November 07, 2003|By Chris Kaltenbach and Mary Carole McCauley | Chris Kaltenbach and Mary Carole McCauley,SUN STAFF

WASHINGTON - Millionaire Joan B. Kroc's appreciation for National Public Radio paid serious dividends yesterday, with the announcement that the late philanthropist and widow of McDonald's founder Ray Kroc had bequeathed NPR more than $200 million, possibly the largest cash gift ever made to an American cultural institution.

"We are inspired and humbled by this magnificent gift," NPR President Kevin Klose said during an afternoon news conference at the broadcaster's headquarters. "This remarkable act of generosity will help secure the future of NPR as a trusted and independent source of news."

The gift, the largest in the 33-year history of NPR, was made in the form of two trusts and is nearly double NPR's annual operating budget of $104 million.

The exact amount of Kroc's bequest will depend on the resolution of her estate and the value of her investments, though NPR officials said the gift could approach $220 million. The funds will be made available to NPR early next year.

Most of the bequest, roughly $175 million, will be placed in an endowment fund, Klose said, which is expected to provide $10 million in annual revenue. Kroc's will did not put any restriction on how the money could be used, he said.

Few cultural institutions have been the beneficiaries of gifts as large as that received by NPR, according to The Chronicle of Philanthropy. One of the largest, worth $424 million, was given to the Metropolitan Museum of Art by foundations built on the Reader's Digest fortune.

But even as they trumpeted the magnitude of the gift yesterday, NPR officials seemed apprehensive about making too much of it. None of the money, they stressed, will trickle into the coffers of NPR's hundreds of local affiliates, which will still depend on membership drives and corporate grants for the bulk of their operating budgets.

If anything, Klose said, he hopes the spirit of Kroc's gift will encourage people to open their wallets even wider to the nonprofit broadcaster, which broke even last year after losing $4 million in 2001.

"I hope that people will see this as setting a very high standard," he said.

Best known for its daily news programs Morning Edition and All Things Considered, NPR also presents music and cultural programming to an estimated 22 million listeners.

Anthony Brandon, president and CEO of Baltimore's NPR affiliate, WYPR-FM, said his station "will always benefit from the strength of NPR." Still, he predicted, the gift likely will have little effect on his station, either directly or indirectly.

"The local affiliates get no direct benefit from this grant," he said. "I think people will understand that there is no structural or corporate connection between National Public Radio and the local affiliates. We are financially responsible for WYPR."

Kathleen McCarthy, director of the New York-based Center for the Study of Philanthropy, predicted that only good would come of Kroc's bequest.

"I don't think it will necessarily discourage people from making other major gifts," she said. "Particularly if it is used as an endowment, other donors will see it as something that will build the organization in the future because it will ensure its long-term survival.

"This gift could actually make NPR more competitive for other big gifts in the long run."

She also praised Kroc for giving to a cultural institution.

"Arts organizations are the most vulnerable," she said, "because they have been historically under-funded by the government." Currently, NPR receives about 2 percent of its annual operating budget from government grants.

Private giving is also relatively small. In 2002, arts, cultural and humanities organizations in the United States received 5.1 percent (or $12.22 billion) of the total $241 billion donated by individuals, corporations and foundations.

National Public Radio sells its programming to 750 affiliate stations throughout the country; Baltimore's WYPR, for example, pays NPR $500,000 annually. Half of NPR's annual budget comes from such payments, with the remainder from corporate underwriting (25 percent), foundation grants (23 percent) and government funding.

U.S. Rep. Earl Blumenauer, an Oregon Democrat who is chairman of the Congressional Public Broadcasting Caucus, praised Kroc's largesse as an example to be followed.

"It raises the profile," he said at the news conference. Perhaps optimistically, he suggested her act might even help persuade Congress to increase funding for NPR and other public broadcasting services. "I would hope, with time, that we could do more," he said.

Others, however, predicted the gift would have little effect on government funding for NPR and other broadcasting services, such as television's Public Broadcasting System, money distributed through the Corporation for Public Broadcasting.

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