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Salvation Army picks up $1.5bn takeaway from McDonald’s

Independent, UK
Jan. 22, 2004
David Usborne in New York • Friday January 23, 2004

For the Salvation Army in America, nothing will be the same again. Its image as an austere evangelical organisation best known for deploying its uniformed members to ring little bells outside shopping malls at Christmas to raise desperately needed dollars has been abruptly transformed by an unfamiliar glow.

Casting this sunshine are the golden arches of McDonald’s. The Army has revealed that – after weeks of soul-searching – it has accepted a $1.5bn (820m) bequest from Joan Kroc, the widow of Ray Kroc, founder of the burger empire. It is the largest gift ever given to a charity.

This is more money than the Army manages to raise in the US through its usual fund-raising activities in a whole year. It dwarfs even the $1bn that the cable television pioneer Ted Turner gave to the United Nations several years ago. Bill Gates of Microsoft gave away $6bn in a single stroke, but the money was donated to foundations and then distributed to many groups.

Of course, the Army’s leadership is expressing profound gratitude. Indeed, when Commissioner Todd Bassett, its national commander in the US, spoke about it this week, he kept saying million instead of billion. “I can’t even use the right words,” he conceded. “I struggle with it.” But the Army, which is part of the worldwide church founded by William Booth in England in 1865, pondered for several weeks before concluding that it was ready to take the money, because it comes with strings attached. Ironically, the bequest may actually increase the long-term burden on the Army to raise money every year, rather than ease it.

Mrs Kroc, who died aged 75 in southern California last October, stipulated that it be used entirely for the building and operation of between 25 and 30 family centres, evenly spread through the Army’s four administrative territories in the US, with headquarters in Los Angeles, Chicago, New York and Atlanta.

The model is the Ray and Joan Kroc Corps Community Centre that opened in a neglected corner of San Diego in 2002, built thanks to an earlier donation of $92m from Mrs Kroc. The facility, the only one of its kind operated by the Army, covers 12 acres and has a gym, large swimming pool, ice rink and theatre space. It has been credited with transforming the neighbourhood.

The philanthropy of Mrs Kroc is already being compared with that of Andrew Carnegie, the American steel baron who promoted the building of libraries as the best hope for down-trodden communities.

On her death, she also donated to other organisations, including a $200m gift to National Public Radio.

Under the terms of her will, the bequest to the Army must be divided in two, with half dedicated to building the new centres and the other half to be put in an endowment to help cover operating costs. But the interest from that may only cover half of the costs of keeping the centres open.

The Kroc gift means the Army will be forced to raise more money every year – at least $70m (38m) more – rather than less. “No one realistically was ever gong to turn it down,” said George Hood, the national community relations secretary. “But in accepting it, we are taking on a significant fund-raising challenge.”

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