Sarah Lutman: What’s influenced Dick Schulze’s philanthropy?
Mark Dienhart: Schulze came from a working-class family in the Mac-Groveland neighborhood in St. Paul. He planned to enroll at St. Thomas after graduating from Central High School. That was during the Vietnam War; the draft had just begun. He signed up for the Air National Guard and didn’t go to college. He always worked and couldn’t participate in normal school activities from his grade-school days on. He had a paper route and a lot of other jobs.
His philanthropy is consistent with his personal narrative. He’s interested in working-class families and the plight of the middle class.
SL: What motivates his giving?
MD: In terms of legacy, his legacy as a successful entrepreneur is secure. Another legacy is the Schulze School of Entrepreneurship at [the University of] St. Thomas. That is what he wanted to do when he graduated from high school, and he didn’t get to. So he wants to see that blossom. He wants to do good and important stuff with the fortune he’s made.
SL: What will the foundation focus on?
MD: The Schulze family has been profoundly affected by health issues. So there is an interest in health and health care that’s in the DNA of the family.
We’re interested in education—not just higher ed but also K-12. Our discussion is around the performance of the schools that have to prepare the next generation of citizens and the people who drive the economy. We’re interested in the slipping performance of American students internationally, what that means in terms of the effectiveness of schools, the rigor of the curriculum, how teachers are prepared and what keeps high-achieving students from choosing teaching [as a career].
The third area is basic human services. I think any foundation that wants to be proud of its work has to be working in that space.
Our giving will be focused on Hennepin, Ramsey and Dakota counties in Minnesota, and Collier County in Florida.
SL: How are you structuring the foundation?
MD: When you start with a bit of a blank slate, you can hire people you think are well suited to these responsibilities and you can explore different areas to see where the board wants to be. Where we are right now is in a very exploratory process. While there’s a strong family influence, Dick decided that he wanted to have independent directors—we have five. There are three family members [on the board]. We’re at about $150 million in assets right now. Over the course of the next four years we’ll grow to as much as a billion dollars.
Schulze doesn’t want this foundation to be around in perpetuity. He wants it to have about a 50-year lifespan. He thinks there will be people like him, successful entrepreneurs, who accumulate wealth, and his responsibility is to take care of the issues that confront the community in the here and now. He believes the next generation is going to have people like him. It’s the entrepreneur’s optimism.
So the spend rate we’ll have will magnify the size of the foundation. Our spend rate might be three times the normal spend rate for a foundation that is intending to be perpetual.
SL: Your website talks about transformation and measurable impact.
MD: It’s the same kind of approach that Schulze took in his business life. It is being very direct and clear about expectations. It’s about checkpoints along the way to make sure that benchmarks are met.
SL: Are you inundated by people who have ideas for you?
MD: We are. I opened up the letter of inquiry process and I’m not turning down meetings with anybody. You don’t need permission to apply, and the phone number on the website is my phone number.
SL: You’ve said Schulze is interested in the middle class. How do you define it?
MD: There aren’t any simple definitions of middle class or working class, but it’s clear that this category of society is shrinking pretty dramatically and we are being driven to extremes. You can imagine why that’s important for a person who built a company like Best Buy. The workforce of Best Buy was largely the middle class, the people who ultimately were able to purchase consumer electronics because of the way Best Buy was pricing them were middle-class people. And the decline of the middle class has an economic impact that affects the nation and the economy. Dick would say this is something that public policy and public dollars are not focused on, and so someone has to pay attention to it.
SL: What can TCB readers take away from Schulze’s story?
MD: When he was in the midst of the battle with Best Buy, people were wondering, “So what’s going to be the next chapter here?” And he comes out of that saying, “I’m looking to give away a lot of the money I spent all this time and energy earning and that I was willing to fight for, and that I was willing to go back to work for at age 73.” And he says what’s most worthwhile is spending his time doing philanthropy. For all the successful folks out there, what’s interesting is that when you reach his point in life and you are as successful as he is and somebody says, “What’s the next frontier?” He’s saying the next frontier is finding ways of giving it away.
Sarah Lutman is a St. Paul-based independent consultant and writer for clients in the cultural, media and philanthropic sectors.