Perhaps a classy 46,000-square-foot building, where officials ponder how to dole out $126 million in gifts this year from its $3.4 billion of assets, would suit the industry icon, even if smoking is forbidden there. The visionary manufacturer and marketer, who globalized a habit many consider worse than a vice, probably would applaud the building’s financing — 30-year, 3.85% notes from Massachusetts Mutual Life Insurance Co. — to replace $700,000 a year to rent its former offices. Perhaps he’d chuckle at his cigar-in-hand statue in a private backyard patio garden. It’s a replica of the one at Duke University, the major recipient of the $3.2 billion the endowment has distributed.
Staying true to Buck Duke’s detailed wishes while adapting to change is part of the job for the 15 trustees, positions as envied as Augusta National memberships. He stipulated that the endowment invest only in Duke Power Co. shares or bonds issued by federal and state governments or municipalities with at least 50,000 people. Trustees got that rule changed, and real estate, private equity and hedge funds make up more than half the assets, which are managed by Duke University Management Co. He focused giving on four areas — rural Methodist churches, child care, health care and higher education. That provides lots of leeway, except the last one, where he required donations to four schools — Davidson College and Duke, Wake Forest and Johnson C. Smith universities. The quartet typically gets more than a third of the gifts, which have averaged $115 million annually over the past five years.
The new building, on a busy street in the Dilworth neighborhood, reflects the endowment’s long-term view and increased public profile, President Eugene Cochrane said at the opening event. Quiet philanthropy by billionaires seems a thing of the past, with the wealthiest more likely to trumpet their giving than hide it. The days of penurious salaries and second-rate office space at nonprofits also appear gone, with 10 of The Duke Endowment’s 40 employees receiving more than $190,000 in compensation in 2012, according to its annual federal filing. Trustees get about $142,000 a year.
Not that the money is what attracts trustees — who include members of the Duke, Kenan, Gray and other iconic North Carolina families and former CEOs and hedge-fund managers. It’s more about extending the tobacco tycoon’s influence nearly a century after his passing. Gov. Pat McCrory, who worked nearly three decades for the electric utility Buck Duke co-founded in 1905, attended the ceremony but didn’t address the gathering. That seemed strange, until a friend reminded me that The Duke Endowment and the families that run it will be around long after any politician has his day in the sun.