Every week all across America—exactly where is a secret—a dozen anonymous associates of a California billionaire are giving $15,000 to unsuspecting people in dire financial straits.
Those who get the checks have no idea that the money comes from the bond-investing guru Bill Gross and his wife, Sue, who last month pledged to give away most of their $2-billion fortune while they are alive.
Mr. Gross and his wife began awarding the unusual gifts two years ago to augment their William and Sue Gross Family Foundation’s expanding philanthropic portfolio of traditional multimillion-dollar donations to education, medical research in the United States, health care in developing nations, and anti-poverty programs in Africa.
Both the big headline-grabbing donations and the small anonymous gifts reveal a singular spontaneous style of the 69-year-old Laguna Beach bond investor, who is eager to accelerate his donations beyond the fraction of his fortune he has given away so far. To date, the Gross Family Foundation has donated nearly $110-million, but that’s just 5.5 percent of what Bloomberg estimates to be Mr. Gross’s net worth and slightly less than what he estimates he earns annually in interest.
Mr. Gross and his wife have already displayed an affinity for unorthodox giving, inspired less by a rigid grant-request process and more by stories they see on “60 Minutes.”
“The standard philanthropic philosophy seems to be that you have to focus and concentrate in order to have an impact,” Mr. Gross says. “I think Sue and I are more eclectic. We’re a little different.”
That’s putting it mildly. Consider:
- In February, the couple gave $20-million to Mercy Ships after watching a “60 Minutes” segment about how the nonprofit delivers medical care by boat to poor people along the West Coast of Africa.
- A 2006 segment on “CBS News” about the stem-cell research program at the University of California at Irvine led to $14-million in gifts, credited with spurring a rapid rise in the institution’s research and reputation.
- Some $500,000 went to the foundation of the former NBA player Dikembe Mutombo after “60 Minutes” aired a show about his efforts to build a hospital in his home country of Congo.
Mr. Gross did not previously disclose the existence of a secret network of associates in America who give away his money anonymously in amounts of $15,000. But he revealed the project to The Chronicle while discussing the challenge of giving away the fortune he built as the founder of Pacific Investment Management Company, commonly called Pimco, where as chief investment officer he manages the world’s largest bond fund, with $248-billion in assets.
Passionate about the charities he supports, he also wants to use his money to help individuals directly. “This sounds stupid, but it’s not easy to give money away,” he says. “Two years ago I said to Sue, ‘It would be nice to give money straight to a person or to a family. So how do we do that?’”
As it turns out, “60 Minutes” provided the inspiration yet again with a story from early 2012, about Florida workers struggling to survive after the space-shuttle program closed. Mr. Gross and his wife were concerned for those facing financial uncertainty so late in life: canceled retirements, bankruptcies, lost health plans.
“They were 50 to 60 years old and had spent their entire lives on the shuttle program,” Mr. Gross says.
So the couple contacted a person interviewed by the television show and asked if the individual would identify those closest to the brink of financial collapse. The couple then wrote $15,000 checks to each one.
The experience reminded Mr. Gross of the 1950s-era CBS drama called “The Millionaire.” In it, a rich benefactor’s associates gave $1-million in each episode to a random person, on the condition that the millionaire’s identity remained unknown.
On a visit in 2012 to the town of his birth, Middletown, Ohio, Mr. Gross and his wife recruited more people willing to identify needy recipients. Today that network has spotters in 12 regions around the nation and has helped “hundreds” of people, he says. “Sue writes a [$15,000] check just about every other day,” he says.
Many Requests
Mr. Gross quickly began to regret talking about the project for fear that any publicity could result in a flood of pleas.
His office is already inundated with college students seeking help paying school loans, a request likely inspired by the couple’s $23-million gift in 2005 to Duke University, Mr. Gross’s alma mater. Mr. Gross wants it known that he and his wife have nothing to do with determining who receives the money. They just write the checks.
The selection process for both their small and big gifts may be unusual. But once the Grosses decide to support an institution, they remain loyal to the cause by demanding results and encouraging others to contribute.
Officials at the University of California at Irvine credit the Grosses with helping to put its stem-cell research center at the forefront of spinal-cord injury treatments.
“We wouldn’t be here without their support,” says Peter Donovan, former director at the Sue & Bill Gross Stem Cell Research Center at the university. “Their support has been vital to building this enterprise.”
The couple’s initial $10-million gift to the center led to $43-million in state- and federal-government support to build the center into a state-of-the-art research facility. Two years ago, the Grosses donated $4-million more to match the amount raised by the university.
They have helped other medical facilities as well. In 2012 they gave $20-million to Cedars-Sinai Medical Center in Los Angeles to help advance biomedical research. In 2005 they gave $20-million to Hoag Memorial Hospital Presbyterian for a women’s-health pavilion.
The couple has given more than $30-million to Doctors Without Borders, and the organization’s efforts in developing nations attracted the couple to do more for Africa. “Our sort of philanthropic view is to be worldwide citizens,” Mr. Gross says. “And to scan the world and see where people need or seek the most help.”
Their $20-million gift to Mercy Ships will go toward building a new ship whose on-board hospital will bear the couple’s name. They supported the Dikembe Mutombo Foundation because of the basketball player’s focus on Congo.
Susan Johnson, head of the Mutombo Foundation, says she was shocked the night in 2010 when she answered the phone in her Atlanta office and first learned about Mr. Gross and his interest in her organization.
“I happened to be working late one evening and I got a call from Bill Gross,” Ms. Johnson says. “He said he was so moved by the [“60 Minutes”] story and how can he help.”
After the conversation, Ms. Johnson Googled Mr. Gross’s name and learned he was a billionaire. She sent the information on the hospital construction right away and received the gift a couple of weeks later. “Oftentimes people will be moved by something they see on TV and they’ll say, Send me some information,” she says. But many times a donation never transpires.
“I knew he’d do something because he was so sincere,” she says.
Business Skills
Mr. Gross makes no apology for what attracts him and his wife to charities.
“I don’t have a lot of organizational skills,” he says. “Sue is pretty busy herself.”
He says philanthropists who have been CEOs of major corporations, like Bill Gates, know how to run a foundation.
“We don’t have time for that,” Mr. Gross says. “We try to attach ourselves to something that is already ongoing.”
But he and his wife do require the charities they support to demonstrate more than just a passion for their causes. They must show that they have good business skills and the ability to sustain their operations.
“You want a group that is businesslike,” Mr. Gross says.
With Mercy Ships, Mr. Gross was worried that construction costs could force the project to exceed its budget and delay its completion.
“All of our concerns were not necessarily satisfied,” he says. “It didn’t come without risk.” But, he added, “we thought the cause and the history and the effectiveness of the organization deserve a commitment.”
Children’s Involvement
In his decision to give away his $2-billion fortune during his lifetime, Mr. Gross says he has to prepare for the potential complication of having three children who are involved in his giving. Sibling battles over family fortunes can often hamper a philanthropist’s effort to give away so much money. That can become even more complicated when the benefactor is a celebrity investor like Mr. Gross, a frequent business television commentator who engaged in a high-profile public spat with billionaire investor Carl Icahn over who was doing more in his philanthropy.
“It can get ugly,” Mr. Gross says about family disputes. But, he adds, “if you make it obvious what your intentions are, it prevents the possibility of ugliness.”
The foundation, whose nearly $415-million in assets represents about 19 percent of his net worth, is managed partially by his three children, while he and his wife attempt to spend the rest “as we race the deadline for dying or becoming so senile that we forget we made the promise.”
“I think we’re very satisfied with what we’ve done so far,” he says. “The only question is, ‘Have we done enough?’”
That’s where the children come in. Jennifer, 49, and Jeff, 42 (Mr. Gross’s children from his first marriage), and Nick, 25, all received allotments for gifts. When they identify a charity to support, they must personally visit the group, write a detailed report, and discuss their ideas with the entire family.
Mr. Gross is confident that if he cannot finish the job before he dies, his wife and children will.
Ironically, he says, the biggest impediment for giving away a fortune is the fortune itself: The interest on $2-billion compounds annually to $150-million, he says. A luxury problem, to say the least, he realizes.
“It sounds ridiculous,” he says. “But I have to hustle.”
Raymund Flandez contributed to this article.
Where Bill and Sue Gross Give: a Sampling
Doctors Without Borders: $22.8-million
Cedars-Sinai Medical Center (Sue & Bill Gross Surgery and Procedure Center): $20-million
Hoag Hospital Foundation (Sue & Bill Gross Women’s Pavilion for women’s health): $20-million
Mercy Ships (Sue & Bill Gross Healing Hospital ship): $20-million
Columbia University (Millennium Villages project in Africa): $15.2-million
University of California at Irvine (Sue & Bill Gross Stem Cell Research Center): $14-million
Smithsonian Institution (William H. Gross Stamp Gallery at National Postal Museum): $8-million
James Hines Foundation’s Teachers of the Year program (annual Orange County, California, public-school awards): $2-million