Foundation Takes Pains to Answer, ‘What Would Margaret Do?’

Photographs Courtesy Of Margaret A. Cargill Philanthropies

Margaret Cargill left behind more than $6 billion for charity when she died in 2006 — and specific ideas about where to spend it.

A decade later, the philanthropy that bears her name is hitting its stride, pumping hundreds of millions of dollars a year into the causes she held dear: the environment, disaster relief, arts and culture, animals, teachers, and older people. All the while, its leaders have been asking: “What would Margaret do?”

Margaret A. Cargill Philanthropies, an umbrella group that covers three grant makers, is housed in an eco-friendly building designed to reflect Ms. Cargill’s love of art and distaste for corporate environments. Inside, staff members have spent years devising a blueprint for spending the heiress’s fortune according to her wishes.

They know that Ms. Cargill, who died at age 85, loved the outdoors, textiles, and Native American arts. She wanted to intervene in areas that were being neglected by others. She prized innovative approaches. She nixed giving to influence public policy and thought medical research could get money elsewhere.

Chief Executive Christine Morse, President Paul Busch, and other of the foundation’s trustees all knew Ms. Cargill, whose grandfather co-founded Cargill, the giant Minnesota agriculture conglomerate. And they are striving to ensure her priorities are embedded in all of the organization’s activities.

“We’re doing everything we believe is important to be a bit more specific and explicit, rather than just ‘Make the world better,’ " says Ms. Morse, who developed a close 15-year friendship with Ms. Cargill while advising her on her philanthropy. “We have guidance from our donor, and we want our staff to understand that.”

Big Changes

Margaret A. Cargill Philanthropies over the past two years has reached a giving level of about $250 million, the sum it now expects to give annually. It took a while to get to that point because Ms. Cargill’s former associates had to settle her estate, design a governance structure, designate program areas, and ramp up from a handful of employees to more than 90.

As of January 1, the philanthropy will have a new structure. The three existing entities will be streamlined to two: Anne Ray Foundation (named after Ms. Cargill’s mother), which will combine two organizations Ms. Cargill created before she died, and the Margaret A. Cargill Foundation, which was set up after her death.

Ms. Cargill zoomed to the top of The Chronicle’s list of the 50 biggest donors in 2011 following a deal that allowed her estate to convert her assets to philanthropy. It involved swapping stock in Cargill, a privately held corporation, for shares in the Mosaic Company, a public fertilizer business. The final sale of those shares took place in 2016.

Photographs Courtesy of Margaret A. Cargill Philanthropies

The proceeds were split between Anne Ray Charitable Trust, one of the grant makers created while Ms. Cargill was still alive, and Margaret A. Cargill Foundation. At the end of 2015, Anne Ray had assets of $3.6 billion and the Cargill Foundation $2.9 billion. A smaller group created by Ms. Cargill, Akaloa Resource Foundation, had $189 million.

If compared with private foundations, those collective assets place Margaret A. Cargill Philanthropies among the country’s top 10 grant makers, nestled between the David and Lucile Packard Foundation ($7 billion) and the Gordon and Betty Moore Foundation ($6.5 billion), according to Foundation Center figures.

Naturally, the nonprofit world has been eager to learn more about how that money will be spent.

“It was a big topic of conversation and still is,” says Trista Harris, president of the Minnesota Council on Foundations.

Avoiding the Limelight

Anne Ray gives money only to designated beneficiaries, including the American Red Cross, the American Swedish Institute, the Nature Conservancy, and the Public Broadcasting Service — which are all benefiting from the sizable windfalls.

But Margaret A. Cargill Foundation, while not accepting unsolicited proposals, has a healthy grant-making budget for groups that work on its priorities. It spent about $115 million in 2015, with the biggest share going to environmental projects ($24 million), followed by disaster relief ($21.6 million).

The foundation is now Minnesota’s top grant maker, jumping ahead of longtime organizations like the Target Foundation and McKnight Foundation. But Ms. Harris says Cargill’s leaders have eschewed the limelight while undertaking a thoughtful planning process.

That process has involved intensive internal deliberations and consultations with foundation, nonprofit, tax, legal and other experts. Margaret A. Cargill Philanthropies has established a unified grant-making strategy for its three organizations, recruiting program officers nationwide to oversee what were once separate portfolios—guided by Terrence Meersman, vice president for programs, a former executive at the Bill & Melinda Gates Foundation and the Virginia G. Piper Charitable Trust. It has set up advisory panels, commissioned “field scans” to determine where the need is greatest, developed background papers, and solicited advice from grantees.

“There are other examples of people methodically developing their strategies,” says Jeffrey Bradach, managing partner of the consulting group Bridgespan, which has been organizing brainstorming and planning sessions for Cargill staff, leaders, and grantees. But he says this effort is distinctive because of the familiarity its leaders had with Ms. Cargill. “We work with a lot of people where the donor was active 50 years ago and we’re trying to discern what he or she meant,” he says. “That’s a little bit different.”

Mr. Busch explains how Ms. Cargill’s desire to tackle under-the-radar problems influenced the organization’s approach to disaster relief and recovery, one of seven areas, or “domains,” that the board has approved as permanent programs. It hired a consultant to pinpoint which U.S. regions experienced recurring disasters like floods, tornadoes, or storms without attracting much media attention. The conclusion: Cargill should focus on 10 Midwestern states, including the Dakotas, Minnesota, Montana, and Missouri, that did not receive as much attention as the East and West coasts.

Donor’s Wishes

Two Cargill grantees praised the organization’s efforts to engage nonprofits in its strategic-planning efforts.

Darius Teter, vice president for programs at the antipoverty group Oxfam — which has received money from the Margaret A. Cargill Foundation for its disaster work in Central America, Ethiopia, and the Pacific Islands — participated in a “joint learning exercise” last year with other grantees who discussed lessons learned in responding to international disasters. Cargill leaders “showed a real humility about knowing what the answer is to complex challenges,” he says.

Mark Tercek, president of the Nature Conservancy, who used to work on Wall Street, compares Ms. Morse to Warren Buffett, the unassuming Nebraska investor who gets extraordinary results by working closely with the limited number of companies that get his money. He says Ms. Morse and her colleagues have made an exceptional effort to understand the Nature Conservancy’s work, including site visits, attendance at board meetings and annual volunteer meetings, conversations at his or their headquarters — and even efforts to find out what makes him tick.

As a designated beneficiary of Anne Ray Charitable Trust, the Nature Conservancy got a fresh injection of money after Ms. Cargill died — and Mr. Tercek says Cargill leaders agreed to allocate some of it to an area that is not always popular with grant makers, infrastructure needs — for example, bolstering its information systems.

He says he hopes the philanthropy’s approach starts to get more attention.

“They’re Midwestern,” he says. “They don’t toot their own horn or anything,” he says.” It’s just one step at a time. A lot of it is not fancy.”

The effort to document Ms. Cargill’s wishes began with Ms. Morse, who met her in the 1990s while working for a financial-services firm that advised the Cargill family. The two women bonded over their shared Minnesota backgrounds and interest in Scandinavia, and “she became a very dear friend to me and to my family,” Ms. Morse says.

Ms. Cargill, who moved to Southern California after graduating from the University of Minnesota in 1954, made substantial anonymous donations over the years, and Ms. Morse helped her set up the Anne Ray trust and Akaloa to channel her philanthropy . The latter supports eight groups serving Southern California, including the San Diego Humane Society, Idyllwild Arts Foundation, and St. Paul’s Retirement Homes Foundation.

Ms. Morse also helped Ms. Cargill lay the groundwork for the grant maker that would be created after she died. “She didn’t want something named after her,” says Ms. Morse, who worked with another of Ms. Cargill’s close friends to change the heiress’s mind. “We felt pretty strongly she should get the credit for the good work she had been doing,” she says.

She and others then began documenting how Ms. Cargill wanted her fortune to be spent. “She’d say, ‘When I die, just do it,’ " Ms. Morse says. “And I would say, ‘Yeah, but I’m going to die, too. I gotta have it written down. I gotta have guidance. The next generation has to have guidance.’ "

Mr. Busch, then Ms. Cargill’s tax adviser, and Naomi Horsager, now the philanthropy’s chief financial officer, met with the heiress over a nine-month period to explore her areas of interest and ask her to name the values and principles that should guide future managers of her assets.

“We would ask questions and let her talk and share a lot of her personal experiences,” Mr. Busch says. They would take notes, summarize what they heard, and send it back to Ms. Cargill to review.

Today, every new employee is handed a written description of Margaret Cargill’s story and a framed document that outlines cultural values that should guide the way her money is spent (for example, “Humility: It’s not about us”). They are asked to watch a “legacy video” featuring interviews with people who knew her. The staff, board members, and others attend a Founder’s Day event every year to revisit their organization’s history.

Ms. Cargill’s program interests are incorporated into the documents that created Margaret A. Cargill Foundation, giving them legal weight.

Bruce Silcox

And anyone who visits the philanthropy’s building in Eden Prairie, Minn., will learn something about Ms. Cargill’s character.

“She was not a corporate person,” Ms. Morse says. “She lived her life more in what I would call the humanities and the arts.”

During a renovation and expansion, the group’s headquarters, which adjoins a wetland, was designed to tread lightly on the environment, for example by using recycled materials and installing a geothermal heating and cooling system. It is filled with textiles, rugs, and art from Ms. Cargill’s personal collection and offers a “reflection room,” meeting rooms with treadmills, outdoor meeting spaces, and a garden.

“She saw how hard I was working,” Ms. Morse says, “and said, ‘If people are going to work this hard at what I am leaving for them to do, they need to be in a comfortable place.’”

Preparing for Next Steps

Margaret A. Cargill Philanthropies is now preparing for the restructuring that will take place on January 1. Anne Ray Foundation will be set up as a “supporting organization,” or grant-making charity, while Margaret A. Cargill Foundation will retain its status as a private foundation. As part of the strategy to unify the philanthropy’s vision, each will have a five-member board, but with identical members, including Ms. Morse and Mr. Busch.

The staff is also working to flesh out two of the seven program areas that are less developed than the others: recruiting, training, and retaining teachers; and quality of life, a category that covers support for vulnerable children, families, and older people.

When asked about other next steps, Ms. Morse responded: “Making sure we harvest the learnings from our staff and grantees.” Over time, she says, she and her colleagues will start sharing more about its discoveries online and with the foundation community.

“We wanted to be very careful, just because we had a significant amount of assets, not to give the impression in the early years that we were going to go out and tell you how to do your jobs,” she says. “We felt like, We can’t give you advice yet. We need to take time to learn it ourselves.

“We’re starting to get through some of those humps.”

Notes: A previous version of this article said that the final sale of Mosaic Company shares took place in 2014 instead of 2016.

The caption of Ms. Cargill originally said that the photograph was taken at her home. It was taken during a trip she made to Washington, D.C.