The explosion of regional philanthropy brings to mind the narrative of a donor growing up somewhere off the beaten path, making their millions in a major U.S. city, and subsequently “giving back” to their home region. This certainly happens a lot, as we so often report, but it’s not the only story behind an explosion of big gifts in the American heartland.
In fact, many prominent regional donors made their fortunes in places not named New York City, Los Angeles or Silicon Valley. Many stayed close to home, working in “old economies” like energy, manufacturing and retail. And many of the donors who seem only to be appearing recently, making news with large gifts, have actually been supporting local causes for decades—starting long before large-scale philanthropy became a ubiquitous component of American society.
Consider the story of Pleasant Rowland, who recently made a $20 million gift to construct a new home for the Madison Youth Arts Center in Madison, Wisconsin.
Born in Chicago in 1941, she graduated Wells College, in Aurora, New York, in 1962. After stints as a schoolteacher, news reporter and anchor, and textbook writer, she founded the Pleasant Company in 1986 with $1.2 million she'd saved from textbook writing royalties. The company created the American Girl collection of dolls, books and accessories depicting girlhood through different eras of American history.
Rowland built the Middleton, Wisconsin-based company—now called American Girl—into a $300 million business and sold it to Mattel in 1998 for $700 million (more than $1 billion in current dollars).
In 2000, she retired from American Girl and formed the Pleasant T. Rowland Foundation, focusing on arts and culture, children’s causes in Madison, her hometown of Aurora, and her alma mater. The foundation, which boasts about $55 million in assets, at one time gave anywhere from $10 million to nearly $20 million annually. Previous support includes an endowment of a gallery at the Milwaukee Art Museum, funding for the construction of an aquatic center at a Madison retirement complex, and major gifts to the University of Wisconsin, including a child care center, a gallery in the new wing of the Chazen Museum of Art, and the endowment of the directorship for the Center for Textile Studies in the School of Human Ecology.
Late last year, the foundation made a $9 million grant to support the national expansion of Reading League, a nonprofit in Syracuse. Rowland also started the Rowland Reading Foundation in 2004, which is dedicated to improving instruction on reading in elementary schools.
Rowland’s assessment should warm the hearts of grant writers looking to “make the case” for the arts to donors. Patrons like Rowland don’t require mountains of spreadsheets and benchmarks to convince them that building a youth arts center is an inherently good thing.
Nor is this Rowland’s first foray into capital project grantmaking.
Rowland’s husband, Jerome Frautschi, whose family owns Webcrafters, a Madison-based printing firm, gave $205 million to build Downtown Madison’s Overture Center for the Arts, which opened in 2004. Frautschi is said to have financed the project wholly with personal funds from the sale of his stock in American Girl. Rowland founded the Great Performance Fund, a $46 million endowment to support the resident-arts organizations of Overture Center, matching all other gifts from community donors.
All of which brings me back to how Rowland and her gift differ somewhat from the conventional “regional philanthropy” narrative.
She didn’t make her millions in the world of high tech or finance, but by creating and selling dolls, merchandise and accessories. And while the recent surge in regional philanthropy has been driven by an infusion of wealth thanks to the bull market that began in March of 2009, Rowland, as noted, cashed in on her idea all the way back in 1998.
Lastly, the regional philanthropy boom is predicated on the idea that donors who migrate to more economically robust locales never lose their affection for home. But even this premise is a bit more complicated than you might initially suspect. After all, some residents leave and never look back—with profound philanthropic consequences for the communities (and nonprofits) left behind.
In a recent post, we looked at Wisconsin’s philanthropic “snowbird problem.” Each year, upwardly mobile retirees say goodbye to the Badger State and head for warmer climes. (Can you blame them? At the time of this writing, it is 16 degrees in Madison.) They settle into these new communities, and in time, establish relationships with local organizations. Inevitably, they cut checks. Money that could have been donated in Wisconsin instead flows to organizations in places like Florida, Alabama, and Arizona.
In response, Wisconsin’s 19 community foundations recently backed a 25 percent state tax credit for charitable gifts. The tax credit is seen as an incentive for the snowbirds to keep more charitable dollars in the state. Similar efforts have been launched in equally frigid states like Iowa, North Dakota and Montana.
There are two takeaways to be gleaned from this development. First, donors respond to incentives, so expect “flyover states” to amplify efforts to keep residents’ donations in-state. And second, Wisconsin’s efforts underscore the importance of donors like Rowland in regional philanthropic ecosystems—donors who establish roots, make their fortunes, and stay put.