The Duke Endowment, which turns 100 today, says it will distribute $5 billion over the next 15 years, or about $1 billion more than its current projected philanthropy.
The move is a nod to the Charlotte-based foundation’s history: The endowment has provided $5 billion in grants during the past century because of industrialist J.B. Duke’s desire to enrich lives and support communities in North Carolina and South Carolina. With assets of more than $5 billion, it’s the largest foundation in the Southeast, says board Chair Charles Lucas III.
“We wanted to do something special,” he says. “This will allow us to invest more money faster to try and solve problems and make lives for citizens in the Carolinas better. We will accelerate our giving and make bigger gifts faster.”
J.B. Duke lived from 1856 to 1925, becoming one of the world’s richest men through investments in what became American Tobacco and the Southern Power hydroelectric operation. (It was a predecessor to Duke Energy.) His endowment officially started on Dec. 11, 1924, with $40 million, followed by $67 million a year later. It set fairly stringent rules directing investments to aid the well-being of children and families; healthcare; higher education and rural United Methodist churches.
Lucas, a descendant of J.B. Duke, called the extra $1 billion commitment “a “stretch goal.” It will bolster existing grantmaking strategies, endowment President Rhett Mabry said in a release.
J.B. Duke wanted the endowment to do “big things for God and humanity through philanthropy,” Mabry said. “We’re trying to do what Mr. Duke did 100 years ago, and that’s to give generously.”
The extra $1 billion in projected spending may involve more than $60 million in annual grants over 15 years. Last year, the endowment approved about $210 million in new grant commitments.
Income from about 46% of the endowment is directed to four campuses: Duke University, Furman University, Johnson C. Smith University and Davidson College. Another 33% goes for healthcare causes. About 12% is directed to rural United Methodist churches in North Carolina, reflecting Duke’s view of the importance of churches in sustaining strong communities, Lucas says.
Tax rules require foundations to make grants of at least 5% of their assets annually, Lucas says. The endowment expects to boost that rate to at least 5.25%, which trustees believe is feasible after studying dozens of financial projections.
“We need to exceed 5.25% to reach our goals,” he says. “We believe Mr. Duke would want us to do that and work harder to stretch more and help the people of the Carolinas.”
Endowment leaders are pleased with their investment results, Lucas says. He notes that its financial performance has ranked in the top 10% of foundations over the past decade and top 25% over the past three years.
The endowment has hosted more than a dozen community celebrations related to the centennial over the past year and created a website to describe the history of Duke’s legacy and the work of endowment grantee partners.
