Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 19, 1995 TAG: 9502180010
SECTION: EXTRA PAGE: 1 EDITION: METRO
SOURCE: BETH MACY STAFF WRITER
DATELINE: LENGTH: Long
If Gov. George Allen succeeded in cutting 32 percent in state funding from Center's budget, Sears knew he would have to eliminate his marketing department.
Meaning, he'd have less help raising money - even though more money would be exactly what he'd need.
Before the General Assembly annihilated Allen's budget, Sears frantically phoned board members and state legislators and drafted resolutions that showed Center's economic impact on the Roanoke Valley ($13.6 million), and the state-funding disparity between it and The Virginia Museum of Fine Arts in Richmond (31 cents vs. $25 per visitor, respectively).
``I don't have a Jack Hancock any more who stands up with these guys and can turn the money out - from $10,000 to $100,000 for a project,'' he said of Hancock, the Roanoke Electric Steel founder and a guiding force behind Center's creation, which spurred the redevelopment of Roanoke City Market.
Hancock died last year at 89.
``If Mr. Hancock were here, he'd be on the phone with the governor right now, and we wouldn't have to be doing these resolutions,'' Sears said.
\ When Jere Lee Hodgin recalls Mill Mountain Theatre's 1993 production of ``42nd Street,'' he thinks of Marion Via, the millionaire heiress who was the No.1 philanthropist of the theater - and the Roanoke Valley.
Via sent an annual $100,000 check to Mill Mountain, but because of this particular production she doubled the amount. ``She had asked me at dinner one night, `Are we gonna have the same six people in the chorus and the same eight people in the orchestra?''' says Hodgin, the theater's creative and executive director.
``She loved this show because it was about a young, unknown person breaking into show business, which she had tried to do.''
Via's extra money doubled the cast and orchestra - and the overall quality of the production - though she didn't live to see the show performed.
Via died in 1993 at 75, six months before the curtain rose.
``There is no doubt that her money allowed us to grow and create theater at the level it is now, to make a reputation in and outside of this community," Hodgin says.
``She gave us this huge safety net. She encouraged us to take risks.''
\ When Bob Kulinski talks about United Way of the Roanoke Valley's financial picture, he uses a sheet of valleywide business trends, titled ``Celebrating Our Achievements Despite Adversity: What We've Had to Overcome Since 1988.''
The fact sheet shows how nonprofits reflect the community's economy - both its giving and buying potential. Some highlights:
In 1987, contributions from Norfolk Southern and Dominion Bank comprised 20 percent of the United Way of the Roanoke Valley's $3.75 million campaign.
Factor into that equation these economic factors: the railroad downsizes, offering 300 early retirements in 1987; Dominion becomes First Union, based in Charlotte, N.C., in 1993; the recession of 1990-'93.
By 1993, contributions from Norfolk Southern and First Union had dropped 9 percentage points, comprising 14.8 percent of United Way's campaign.
``When you lose a vice president at Norfolk Southern, that job in terms of economic impact takes a huge toll on the area,'' Kulinski says. ``You have a whole base of people who are no longer shopping at Davidsons, going to the symphony or eating out as much."
Former Dominion chairman Warner Dalhouse - who once had the power to authorize corporate gifts of $1 million to Center in the Square, $250,000 to the Jefferson Center and $250,000 to Explore - says million-dollar gifts are a thing of the past in Roanoke.
``Not to say that First Union isn't generous; they give an average of $300,000 away'' to Roanoke charities a year, plus additional community-service involvement that amounted to $380,000 last year, Dalhouse says. First Union pledged $300,000 over three years to the Hotel Roanoke project, he notes.
``But less money is being given to groups than when the CEOs of those companies went to bed in Roanoke Valley homes.
``The whole world changed with the '90s. It's not just that Dominion is gone and Mountain Trust is gone and Carter Machinery is gone, and Sidney's is out of business and Heironimus is owned elsewhere and Coca-Cola Bottling is a Carolina company and the newspaper is owned in Norfolk; that's part of it.
``But there's also been a change in the imperatives of corporations to be more efficient, more profitable, more competitive.''
\ In the 1950s, power and influence in Roanoke were tightly held by four institutions: the railroad, the electric company, the bank (then First National Exchange, later Dominion) and the newspaper.
By the 1980s, only the bank retained such formidable influence. The power of institutions had been replaced by the power of individuals.
Roanoke, relatively young and blue-collar, has never had the concentrations of wealth that other Southeastern cities have drawn upon. And the wealth it did depend on - money from John Hancock and Grand Piano and Furniture founder George Cartledge for instance - was made by self-made entrepreneurs who felt a responsibility to give back to the community that made them rich.
In a 1988 newspaper survey, the top two clout-wielders in Roanoke were Hancock and Dalhouse. The highest-ranking woman - in fact, the only woman - was Marion Via, whose trusts inherited $300 million from the sale of Allen-Bradley Co., her father's company, and the privilege of doling her money out in a quiet, yet reverberating, way.
There was Hancock, whose exclusive ``Monday night at five'' gatherings called together business and political leaders. Among the initiatives outlined at those meetings - and personally jump-started by checks from Hancock and his gang - were the Explore Park, Center in the Square, the Roanoke-Virginia Tech smart road and the national debt sign at Jefferson Street and Campbell Avenue downtown.
A hall at Virginia Tech is named after Hancock, who in 1988 gave $1 million to establish an endowed faculty chair for the College of Engineering. His gifts weren't always the biggest, but his influence to marshal other resources was.
``He was adamant and strong-willed about causes he felt strongly about, and you just didn't say no to him,'' says John Clarke, a former Dominion executive who now runs an investment-management company.
Hancock's personal estate, estimated at $14 million to $20 million, went to his family. His daughter Betty Carr Muse, an arts patron and civic leader in her own right, says the family is considering starting a charitable foundation.
``But Roanoke may not get the entire benefit because the third generation isn't even here,'' Muse says. ``That worries me. I kept saying to Daddy and to George [Cartledge]: 'Get some people lined up to take over when you're gone.'''
\ Marion Via may not have had the personal influence Jack Hancock had, but consider what the Roanoke Valley would look like without her input: Take away the Bradley Free Clinic, to which Via gave $1.06 million to establish in honor of her father, Milwaukee industrialist Harry Bradley.
Take away the 10-year salary commitment for Roanoke Symphony Orchestra conductor Victoria Bond. Take away the annual $100,000 checks to the Salvation Army, the Rescue Mission, Mill Mountain Theatre, public television's WBRA, Opera Roanoke, the Roanoke Valley Horse Show.
Take away entire performances solely underwritten by Via, including ``Porgy and Bess,'' ``Aida,'' the horse show-symphony event called Music in Motion and symphony concerts featuring Tony Bennett and Leontyne Price.
Take away the $13 million public gift she gave Virginia Tech, and you wouldn't have the Parkinson's Disease research center or the Via-Bradley College of Engineering foundations - both of which help fund faculty salaries, scores of scholarships, facilities and equipment.
``Particularly in these high-tech areas, having very strong academic and research programs are an inducement for industry to move to this region,'' says Charles Steger, Virginia Tech vice president. ``She understood that it would enhance the quality of life in the Roanoke Valley.''
Tax returns from the two Tech foundations show assets of more than $22.7 million in 1993, reflecting investment growth and additional Via gifts.
Via's will provided for the continuation of long-term gifts she'd pledged for the conductor's salary and the horse show. Her real-estate holdings, personal property and bank accounts - probated at $17.5 million in Roanoke City Circuit Court - were divided among her two sons and two granddaughters.
But the bulk of her trust holdings, estimated at $400 million to $500 million, are contained in two of five family trusts created by her father in 1945. These trusts were the focus of a 1985 Milwaukee lawsuit, in which Via fought successfully to name her own trustees.
According to the original trust document, Via's sons and granddaughters are the beneficiaries of the income produced by the trusts. The principal of the trusts will not be distributed until 30 years after the death of the last beneficiary named in the 1945 agreement.
The last beneficiary is likely to be Peter Via, now 53. Her other son, Edward, now 40, was not yet born when the trust was created.
Edward will receive half of the principal when the trust terminates, if he is still alive. The remainder will be split between Peter's two daughters and their heirs, tax-free. Based on an assumed growth rate of 7 percent and a termination year of 2055, the trust holdings would contain more than $25 billion.
"The grandchildren and great-children will be the biggest beneficiaries,'' estate lawyer Bruce Stockburger said after analyzing the trust document. "We need to rename this city for them and get them to live here."
The wealth Via amassed during her lifetime from the trust interest - estimated at $50 million to $60 million - is believed to be contained in trusts established to transfer her estate to future generations, avoid the highest tax rates and keep the details off the public record. The beneficiaries of those trusts were not revealed in her will.
Whether some of Via's favorite non-profits stand to benefit from charitable remainder trusts - a tax-planning strategy that would allow her heirs to inherit the interest from her estate, with the principal going to charity when they die - is unclear, though Stockburger suspects that could be the case.
This much is clear: Marion Via had the foresight in 1991 to set up the Marion Bradley Via Memorial Foundation, which has continued to fund some favorite projects. Contributions from the foundation's 1993 tax return - the latest available - show that 21 charities, all but two of them local, received more than $1.28 million after her death.
Included on the list: Renew Roanoke (Hotel Roanoke campaign), Virginia Tech's baseball stadium, Salvation Army, Juvenile Diabetes, Crisis Pregnancy Center, Rescue Mission, Mill Mountain Theatre, Roanoke Symphony Orchestra and Bradley Free Clinic.
Who administers the trusts and the foundation? Who decides who gets what?
Four trustees. Three are old Via-family friends from Milwaukee who now live in Wisconsin, California and Florida.
The fourth is a Roanoker - Via's attorney, confidante, co-executor of her estate and surrogate son:
John Rocovich.
And he refuses to divulge the details.
\ When Barbara Landon first became a fund raiser, she read a trade book that stressed not depending on ``someone calling you up out of the blue and saying, `You've got such a wonderful organization, I'll give you $100,000,''' says Landon, vice president of development for Blue Ridge Public Television.
``But it did with us because Roanoke had people who cared and did it quietly. Especially with Marion Via, it wasn't for name recognition. You look at Center in the Square, the Free Clinic - they're landmarks for this town now, and it's because we had people who cared.''
Organizations who relied heavily on the big benefactors are scurrying to broaden their support base. Which is no easy task, considering that it takes 1,000 people - giving $100 each - to make up for just one of Via's checks.
``The equation in Roanoke is that you have several legends who've passed away, some corporations who've gone away, and the social-agency needs going up; meanwhile the public funding goes down,'' explains Jim Harkness, a former Dominion executive who's now vice president of development for Roanoke College.
Meaning, competition for the dollars is stiffer than ever.
``We should've been planning for this 10 years earlier,'' John Clarke says. ``There was too much reliance on Hancock and George Cartledge, then Marion Via.''
Most of their money is still at the discretion of Roanokers, but the capacity or vision to dole it out has diminished, Clarke believes. ``Hancock left us Roanoke Electric Steel, which is locally headquartered, and I hope Cartledge lives forever. But he has Grand Piano and Furniture and young George Cartledge Jr. and the Cartledge Foundation, which will continue his charitable thoughts and deeds.
``And Mrs. Via, she has left whatever - and it's headquartered in John Rocovich.''
``It's not so much attitude as it is capability,'' adds Rupert Cutler, executive director of Explore Park. Hancock, who gave over $1 million to Explore from 1985 till his death, ``did as he pleased. But Don [Smith, Roanoke Electric Steel's CEO] is responsible to his stockholders.
``Dalhouse had discretion and flexibility, but Ben Jenkins, the new head of First Union, reports to Charlotte.''
Explore received $50,000 a year from Dominion, Cutler says; First Union gives $5,000. The bank's largest local contributions in 1993 went to Hotel Roanoke ($100,000), the Red Cross ($20,000), the Jefferson Center ($50,000) and United Way ($85,200), according to the foundation's tax return. The foundation gave away $7.3 million that year - most of it in North Carolina and Florida, where the majority of the bank's business is conducted.
Norfolk Southern's foundation is a major supporter of United Way, which receives $110,000 annually; and Mill Mountain Theatre, Roanoke Symphony Orchestra and the Art Museum of Western Virginia, which receive $50,000.
``Based on having our headquarters here, I'd say we probably give a little more in Norfolk than we give in Roanoke or Atlanta,'' John Turbyfill, chairman of the Norfolk Southern Foundation, said in a telephone interview from his Norfolk office.
``Norfolk's getting a lot more than it used to from us, but we've attempted to continue our support in Roanoke.... I don't think the giving's gone down in Roanoke.''
Schedules from the railroad foundation's 1993 tax return show that Tidewater-area charities received $1.83 million in contributions. Roanoke Valley groups received $382,510 - despite Roanoke's railroad division having 3,084 employees, which is 1,612 more workers than the Norfolk operation has.
\ Civic leader Bittle Porterfield was treasurer of the art museum during what he calls ``the absolute depression of '92.'' The downsizing and streamlining forced upon many area arts organizations prepared them for the recent decrease in donations.
``The legacy of the big givers is that people are quality-minded,'' says Porterfield, who also has his own charitable foundation. ``They'd rather see a reduction in the number of offerings rather than sacrifice quality.''
The symphony suffered a deficit last year for the first time in its 41-year history, partly because of a decrease in Via funding.
To balance the budget this year, it cut pops concerts from three to one, reduced educational programs, halted staff and musician raises, cut staff by one and cut one rehearsal off each concert.
The symphony's annual budget has dropped from $1.1 million in 1992-1993 to 871,000 for 1994-1995. The budget is comprised of 10 percent public funding, 30 percent corporate donations and 60 percent individual contributions.
``It's tight, but our commitment is to artistic excellence,'' says Lori Gubala, development director. ``We're hoping to be able to add back the one rehearsal we had to cut.'' A campaign to raise a $1 million endowment - to pay for the conductor's salary when the Via commitment runs out next year - has netted nearly $800,000 in four years.
Opera Roanoke, which received as much as $200,000 annually from Via, put nearly half of her gifts in an endowment account for future operating expenses, says former director Judy Clark, now an arts consultant.
``Instead of huge flashy events I think you'll see equal quality but on a smaller scale - less costly, but every bit as fine,'' she says. ``What the opera needs to do and what all arts groups need to do now is build a bigger constituency.''
The No. 1 reason people don't give to charities is because they've never been asked, says Alan Ronk, who heads the Foundation for the Roanoke Valley, which manages 19 endowment funds ranging from the $1 million Katherine Nelson Fishburn Foundation Fund to the $25,000 Cave Spring Lions Club Scholarship Fund.
The foundation gave $250,000 in grants last year to 100 area nonprofits, much of it from funds established by low-profile people.
People like Melva P. Jones, a widowed Vinton church organist who died in 1992, leaving a $250,000 endowment for music and art.
Ronk believes there's a wealth of untapped charity dollars from ``people who've lived modestly, bought some stock in their 40s and drive a nice car but don't live extravagantly. And they care about Roanoke.''
Non-profits need to employ a variety of aggressive fund-raising strategies, Ronk says, including personally involving second-generation benefactors in their organizations, soliciting post-death gifts and bequests (called planned giving) and targeting the unknowns.
Harkness of Roanoke College says that non-profit ``agencies and their boards are going to have to make sure their needs are perfectly presented, do a better job of asking and spending and justifying their spending, and challenge everything they do from their mission statements on down to how each paper is filed.''
Entrepreneurs who are new to philanthropy have a different sense of community obligation, United Way's Kulinski says. ``It's harder to get the new self-made millionaires to support their communities to the same financial degree as the Cartledges and the Hancocks."
Physicians, of which Roanoke has a disproportionally high number, need to be solicited more strenuously. One fund-raising group recently invited 300 doctors to an event - and only eight showed up.
Corporations and individuals in Roanoke have a tendency to contribute less than they're capable of giving, Dalhouse says. ``I've raised a lot of money in 25 years, and people tend to make a $100 gift and really think they've done something extraordinary when they could probably make a $250 gift just as easily."
"There are a lot of people who can give but don't," says lawyer Heywood Fralin, who heads the charitable foundation set up by his brother, Horace, who died in 1993. "Everybody wants the tax benefit, but lack the motivation" to give. "Most people who do give don't to it for tax reasons; they do it for the charity of it."
The valley will likely never replace the large benefactors of the '80s, but new leadership will emerge over time, fund-raisers say.
Says Explore's Cutler: ``It all boils down to a community beginning to take on responsibility, pulling up its socks and saying, `We can't expect the government and certain individuals and corporations to do everything for us.' We need more cooperation locally.''
Keywords:
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by CNB