How Joan Kroc’s Largess Changed the Salvation Army

Ward 2 in Biloxi, Miss., wasn’t much of a destination before the Ray and Joan Kroc Corps Community Center opened 11 years ago — unless you wanted to find one of the casinos situated nearby on the Gulf of Mexico. In this, the poorest neighborhood in the city, streets are dotted with vacant lots — a reminder of the massive devastation wrought by Hurricane Katrina in 2005.

From its opening day, people have flocked from neighboring counties and states to this gleaming, 52,000 square-foot, state-of-the art recreation palace on Division Street, constructed on an old lot across from a housing project where a high-school stadium once stood.

Before the Kroc Center opened just around the corner from his lifelong home, Robert Fountain, a Navy veteran and retired civil servant, had to drive crosstown to the more affluent west side of the city to a well-equipped gym. He signed up for a membership at the Kroc Center on the very first day. “I try to go every day for a couple of hours,” he said. “It’s a beautiful place.”

Jeff Koonce, who became the center’s member service coordinator nine years ago, loves the reaction of former residents when they return to the neighborhood. The only place for kids to play basketball in the 1980s was in a run-down city-owned structure.

“It’s still mind-blowing to people when they come back,” Koonce said. “They say, ‘If only this has been here when I was a kid.”

First-class recreation centers in low-income neighborhoods — dozens of them, scattered around the nation. That was the vision of Joan Kroc, billionaire philanthropist and heiress to the McDonald’s fortune of her husband, Ray. When she died in 2003, she left what amounted to $1.8 billion — roughly half her fortune — to the Salvation Army with instructions to carry out her wish.

Christiana Botic for The Chronicle

And today, 20 years later, 26 grand, state-of-the-art Kroc enters have opened in places as varied as Ashland, Ohio; Guayama, Puerto Rico; and Quincy, Ill. Salvation Army officials say 1.2 million people belong to Kroc fitness centers, and over 3 million people annually are served through a wide variety of other programs, including job training, theatrical performances, and after-school care.

The Phoenix Kroc Center hosts a financial-literacy course and filmmaking workshop. In Boston, a culinary-arts program provides job training. Several nonprofits keep offices at the Kroc facility in Augusta, Ga. In San Francisco, the center is attached to housing for veterans and for young people who have aged out of foster care.

One constant across the locations is the presence of a designated “Kroc Church.” Spiritual guidance is available to anyone who seeks it, said Dale Bannon, the Salvation Army’s national community relations and development director — likening it to a prayer box at a hospital.

A Departure for the Salvation Army

The path to this point has not been easy for an organization whose hallmark is frugality — one accustomed to raising much of its money in small gifts from everyday donors. The Salvation Army didn’t solicit the Kroc windfall, and it certainly hadn’t planned to open and maintain dozens of lavish, world-class recreation facilities. From the start, the bequest raised many questions. Would the announcement of the gift impact the willingness of other donors, great or small, to give? How would the gift affect the Army’s mission and culture? The journey that has ensued offers important insights for donors who have big dreams about how their money will be used posthumously.

Kroc’s will specified that the group was to divide the money equally among its four U.S. territories. Half was to be earmarked for the construction of recreation centers, with the other half deposited into endowments to support them. None of the bequest was to be used for existing programs, nor was the Army to convert existing buildings.

The centers were to serve as “campuses of opportunity” where “no child should ever feel envy toward contemporaries who came from higher economic and social backgrounds,” according to a document from Kroc’s lawyer. Beyond that, the heiress’s instructions were remarkably vague.

Neither Kroc nor the Salvation Army wanted her vision for the grand centers to “cannibalize” existing operations, said Col. Ralph Bukiewicz, the organization’s national chief secretary. The challenge they faced was squaring her goals with the Army’s core mission — “to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination.”

“Our legal experts told us, ‘We have never seen a gift of this size with such generalized terms,’” Bukiewicz said, adding that it forced his colleagues to ask, “What does ministry look like? Without necessarily overtly requiring someone to profess faith, how do we embrace, how do we achieve Joan’s dream?”

Personal Experience

Kroc planted the seeds in the late 1990s for what would become her ultimate gift. She’d noticed kids milling aimlessly around the streets in San Diego, the city that had become her hometown after Ray had purchased the local Padres baseball team.

“I realized they desperately needed a safe gathering place, a place with facilities and trained professionals to nurture their arts appreciation and athletic potential,” she said at the time.

Kroc herself had grown up poor in St. Paul and, as a young wife and mother, supported her daughter and first husband with her masterful piano playing. She knew from personal experience the importance of keeping kids from idling on the streets.

Lenny Ignelzi, AP

Years later, after marrying Ray and inheriting his fortune, she found herself impressed by what she understood to be the Salvation Army’s “efficient” capacity to “wring the most out of a nickel.” She called for a meeting with San Diego area officials, and over lunch, she requested a proposal for a recreation center to be situated in a poor neighborhood.

Until then, her investment in the group had been minimal, an occasional donation supporting meals for the needy at Thanksgiving. (In the earliest days of McDonald’s, Ray’s associates say, he manned one of those Army’s red kettles in Chicago each Christmas season just long enough for the newspaper cameras to snap a good publicity shot.)

Presented by local officials with modest plans, Joan Kroc pushed back, insisting on a “showpiece of exceptional quality.”

By the time the grand 195,000 square-foot facility in five buildings on the 12.5-acre site of what had been a festering old strip mall in the Rolando neighborhood opened to the public in 2002, it featured a National Hockey League-regulation ice rink, three pools, sports fields, a library, a climbing wall, and a 540-seat theater named for Kroc herself. In the end, she’d doled out $93 million to construct the center and endow its future.

At the gala opening festivities, children’s TV star Fred Rogers — Kroc’s good friend and another beneficiary of her generosity — told the enthralled crowd, “Many people in our time look at a neighborhood, which can easily breed dope dealing, robbery, and murder, and their reaction is to build bigger prisons. Not Joan Kroc. Her reaction is to build bigger swimming pools.”

No-Strings Gifts

Not long after, Kroc, then age 74, was diagnosed with a terminal brain tumor, and she and her small staff of advisers revved into action to prepare her final wishes. Having no formal foundation in place added a layer of complexity to the task.

Faced with about $3 billion in assets, she compiled a list of recipients of unrestricted gifts, including the peace centers she’d created at Catholic universities Notre Dame and the University of San Diego ($50 million each); Ronald McDonald House Charities ($60 million), and National Public Radio ($225 million).

The Salvation Army was named as the residual beneficiary of her estate, which included her grand compound in Fairbanks Ranch, Calif. By the time it was settled several years later, the total sum transferred to the church — the “lottery of philanthropic gifts,” Bannon said — had ballooned to $1.8 billion from the $1.5 billion it had originally been told it would receive. In today’s dollars, that’s the equivalent of $2.9 billion.

And with that final dispersal of her assets, the Salvation Army was left alone to implement her wishes.

‘Like a Gold Rush’

By then, word had spread across the nation — as did requests from communities eager to host their own Kroc Center.

“It was like a gold rush, the old Oklahoma land rush,” said Jack Getz, who was hired to help manage the bidding process in the Salvation Army’s southern territory.

The tiny news item about the gift in the back pages of the morning paper that Sue Thilo read over breakfast in Coeur D’Alene, Idaho — then a city of 44,000 — launched her in search of a slice of that gold. For years, she and other community activists had been trying but failing to raise funds to build a desperately needed recreation center, performing-arts venue, and pool. The lack of such a facility was, she said, a “huge hole in our community.”

Thilo and others sleuthed out an invitation to the bid process, though they were told it was a “long, long, long shot.” The Salvation Army didn’t even have a presence in the area. Besides, larger municipalities with seemingly greater need were sure to prevail.

Kroc Facilities Around the Country

1/6

Christiana Botic for The Chronicle

Children play at the Salvation Army Kroc Center’s Aquatic Center in Biloxi, Miss. on Thursday, Feb. 23.

2/6

Christiana Botic for The Chronicle

Music and Creative Arts Coordinator Felicia Bond teaches piano at the Salvation Army Kroc Center in Biloxi, Miss. on Friday, Feb. 17.

3/6

Christiana Botic for The Chronicle

Children learn using computers at the Salvation Army Kroc Center’s After School Program in Biloxi, Miss. on Friday, Feb. 17.

4/6

Abigail Dollins, Statesman Journal, Imagn

Mary Ann Johnson, 84, practices climbing the rock wall with her trainer Tim Carr on Tuesday, Aug. 25, 2020 at the Kroc Center in Salem, Oregon. Johnson who recently turned 85 years old made it her goal to climb the wall for her birthday.

5/6

Matthew J. Lee, The Boston Globe, Getty Images

Former Alvin Ailey dancer and master teacher Nasha Thomas leads participants in learning Ailey’s signature choreography as Alvin Ailey American Dance Theater celebrates their 50th year at the Salvation Army Kroc Center Gym in the Dorchester neighborhood of Boston on Feb. 24, 2018.

6/6

Antranik Tavitian, The Republic, USA TODAY NETWORK

Phalen Booker, a financial advisor with Edward Jones, right, leads a lesson on investments during a 10-week financial literacy class held through the The Kroc Center and Salvation Army in South Phoenix on Wednesday, March 9, 2022, in Phoenix.

With a skilled grant-proposal writer and the buy-in of key local residents, Coeur D’Alene’s citizens rallied together to prepare a detailed application, identified a centrally accessible 12-acre location, and plunged into raising the Salvation Army-stipulated $8 million — two and a half times what any capital campaign had attempted in the area before.

Steep obstacles stood in the way in other communities, including the Great Recession, in full swing by 2008. Some cities couldn’t secure adequate land. A few municipalities were rankled by the faith-based nature of the Salvation Army.

In some places, the “Kroc surprise” did, as had been feared, lead to “donor creep,” as one divisional commander in San Francisco told a reporter.

Salvation Army officials said they don’t have a record of how many initial applications were received for Kroc Centers. Ultimately, 33 cities were chosen to proceed, with each location navigating a complex matrix of local zoning, permitting, and fundraising — and several, as was the case with Staten Island, N.Y., ultimately not reaching completion.

That Biloxi would win final approval was practically a given. Joan Kroc, an inveterate gambler who jetted around on her private plane, Impromptu, on a lark, had toured Ward 2 back in 1999 after a foray to the local casinos. In a twist on her San Diego gift the previous year, she’d committed $2 million to build a swimming pool. Various political issues, and then the destructive hurricane, had stalled those efforts.

Other shoo-ins were Chicago, Ray Kroc’s hometown, and Atlanta, where the Salvation Army maintained a training headquarters.

Up in “long-shot” northern Idaho in May 2006, a standing-room-only crowd packed into Coeur D’Alene City Council chambers. A divisional commander had barely spoken the words — that the city had indeed won $60 million to construct and endow a Kroc Center — when thrilled locals erupted in cheers and tears of joy.

Jerome A. Pollos, Coeur d’Alene Press, AP

Three years later, the 109,000 square-foot resort-style facility, including a climbing wall, jogging track, cardio fitness area, and pools, came online, attracting an eye-popping 16,000 members in just a month — six times what had been anticipated.

Today, third-grade students from around the region are taught to swim at Kroc’s aquatic center — crucial public safety, Thilo said, in a region filled with lakes. Food and clothing drives help the area’s less fortunate. Special events booked into the 400-seat theater generate revenue, as do meetings and parties. Area gyms concerned that the Kroc might bigfoot them out of business saw their memberships grow, and more gyms opened.

As evidence that “generosity breeds generosity,” Thilo said, capital campaigns launched by the hospital and community college proved successful. “Perhaps the success of the Kroc Center demonstrated what charitable giving can do. How it’s enriched our community, it’s impossible to measure.”

‘Halo Effect’

Quantifying the precise impact on all of the communities served by the Krocs is as complex as navigating the Salvation Army’s vast matrix of operations and finances. A 2015 study commissioned by national headquarters calculated that the centers radiated a nationwide economic “halo effect” of nearly $270 million — including the impact of the initial construction, ongoing maintenance, creation of jobs, and the health and fitness benefits to the population.

Four centralized administrators at Salvation Army headquarters provide training and development to staff at the centers, sharing information about membership-recruitment strategies and facilities management. The $900 million tucked away into endowments to support the centers has ballooned to nearly the size of the original gift, $1.5 billion, said the Salvation Army’s Bannon.

Since the organization, as a church, does not have to report its finances, the precise operating budget of each center is not public, nor is their financial health.

Not a Churchgoer

Even though the Salvation Army complied with Kroc’s wishes to create the centers nationwide, it is not clear she would be entirely pleased with the outcome of the only gift she’d ever given that attached her husband’s name. Several people close to her maintain that while she showed deep respect for people of faith and invested tens of millions of dollars to build peace centers at two Catholic universities, she herself was not a churchgoer and would have taken issue with the facilities being used for religious purposes.

Before she fell ill, Kroc herself ran up against the group’s conservativism at the San Diego center, including when a gay men’s chorus was not allowed to book the theater bearing her name. After having stern words with management, she visited the choral director to apologize, then donated a $105,000 Bösendorfer piano to the group.

Squaring the religious with the secular has proved a challenge internally at times — eliciting debates over whether the centers should stay open on Sundays or offer classes in Eastern-based practices like yoga or tai chi.

Ted Fitzgerald, Boston Herald, Getty Images

Indeed, Kroc’s gift dispatched the Salvation Army in a direction it hadn’t intended — a mistake some donors make, said Diana Aviv, a veteran philanthropic adviser and former CEO of Independent Sector, a national coalition of nonprofits and foundations. In turn, the Salvation Army pivoted and put the gift to work consistent with its mission, which, she said, only makes sense.

Today, MacKenzie Scott’s unrestricted giving takes a less “maternalistic” approach to philanthropy, said Phil Buchanan, president of the Center for Effective Philanthropy — trusting nonprofit professionals to use her gifts as they see fit. Buchanan’s group received $10 million from Scott and last year issued a study on how Scott’s donations had impacted a wide swath of nonprofits.

“If you really want to make a difference, you’re better off allowing [recipients] to deploy the resources, rather than saying from on high in donor-land, ‘I want you to do this particular thing,’” he said. “There’s often a sort of ego and legacy component to giving that’s not always consistent with having the most impact.”

And yet, even unrestricted gifts can be fraught. Despite the millions Kroc gave at the end of her life to the San Diego Hospice ($20 million) and San Diego Opera ($10 million), each group faltered financially. And National Public Radio, despite having received an unrestricted gift that amounted to the second-largest slice of the Kroc fortune, recently announced cutbacks due to financial troubles.

A Dream Come True

Angelia Grandberry grew up in the projects across the street from the Gulf Coast Kroc Center back when drug dealers loitered on the corner and kids hung around smoking weed and drinking beer for lack of a better place to go.

Now, decades later, she runs the day care and camp programs at the center, where she relishes the opportunity to hire local teens to help her. She proudly wears her Kroc shirt around the community.

Christiana Botic for The Chronicle

The center has provided a safe space, she said, where piano and guitar lessons are offered, family bingo nights are held, and children can play safely as they wait for their parents after school. Some of the locals were initially intimidated by the opulence of the place, Grandberry said, and thought it meant they wouldn’t be welcome. She explained that Joan Kroc meant for the place to be accessible to all — that beauty was part of her plan.

“What she wanted was for kids from low-income families to be able to come here,” she said. “In my view, her dream is coming true.”

Reporting for this article was underwritten by a Lilly Endowment grant to enhance public understanding of philanthropy. See more about the grant and our gift-acceptance policy.