7 Charities Stand Ready to Share Some of Anne Ray Charitable Trust’s Expected Windfall

The Margaret A. Cargill Philanthropies may eventually support hundreds of charities, but few of them will feel the impact as much as two little-known research centers in Minneapolis and Santa Fe, N.M.

Ms. Cargill, an heir to the Cargill agribusiness fortune who died in 2006, left shares in her family’s business worth almost $9-billion to her philanthropies.

Half her estate—an amount worth more than $4-billion—belongs to the Anne Ray Charitable Trust, which can only provide support to the seven charities named in its founding documents. The trust, named after Ms. Cargill’s mother, will greatly expand its grant making this year.

Four of the beneficiaries of the trust are large and well known: the American Red Cross, the Nature Conservancy, the Public Broadcasting Service, and the YMCA of the USA. A fifth, Berea College, in Kentucky, is mid-sized, with an operating budget of $38-million per year.

But the final two—the American Swedish Institute, in Minneapolis, and the School for Advanced Research, in Santa Fe—are relatively small nonprofits, with annual budgets of $2.2-million and $3-million, respectively.

Curse or Blessing?

The value of the Anne Ray trust is big news for each of the seven beneficiaries. If the spending from the trust were spread equally (which nobody expects), ,each charity would get the same level of support that a $600-million endowment provides.

But the trust has the potential to be transformative—or, worse, overwhelming—for the two smallest beneficiaries, even if they receive a relatively puny share of the trust’s payouts.

“It sounds crazy to say, but sometimes a huge infusion of resources into an organization that isn’t ready for it is more a curse than a blessing,” says Phil Buchanan, executive director of the Center for Effective Philanthropy, in Cambridge, Mass.

Trust officials say pay-out decisions will vary each year, and among charities. “The amounts that will go to each will depend on each organization’s plans, and how those fit with our mission,” says Christine M. Morse, the trust’s chief executive.

Many expect the biggest organizations to ultimately receive the most support. The Red Cross has received $8-million from the trust in the past three years, primarily to prevent AIDSpreventAIDS in Siberia. Berea has received about $2.3-million over six years, primarily for campus sustainability projects.

“The scalability of what the American Red Cross can do is hundreds of times what a Berea College can do,” says Larry D. Shinn, Berea’s president, “but we’re probably dozens of times what the American Swedish Institute can do.”

‘Excited and Humbled’

The American Swedish Institute, founded in 1929, is a historic mansion, museum, and cultural center. Hilma Berglund, the textile artist, was a longtimelong-time mentor to Ms. Cargill, and when Ms. Berglund died in 1972, she left her collection and journals to the institute.

Ms. Cargill gave the charity $4.2-million during her life. But the potential support from the Anne Ray trust is much greater. If the trust eventually pays out at least 5 percent of its assets per year as planned, it is likely to eventually make grants worth $200-million or more per year. That means the American Swedish Institute could see its $2.2-million annual operating budget fully matched by the trust, even if it receives only about 1 percent of the trust’s annual spending.

“This really challenges us to find ways to cultivate and serve a larger and more diverse audience than we ever have in our history,” says Bruce Karstadt, president of the American Swedish Institute. “We’re excited and humbled by the circumstances in which we find ourselves.”

Mr. Karstadt says he has considered the “serious question” of whether other donors will shy away when they realize the charity receives support from a trust worth billions. “We will continue to need to derive support from members,” he says.

The School for Advanced Research is a research and cultural organization in Santa Fe that focuses on archaeology and anthropology, and supports the work of Native American scholars and artists. Its Native American focus probably appealed to Ms. Cargill, who had a deep interest in those cultures, but no one associated with the charity can recall whether she ever visited the campus, says John Kantner, the vice president for academic and institutional enhancement.

“We’re not exactly sure how we came to be one of the beneficiaries,” Mr. Kantner says. .Not that anyone is complaining. The school, founded in 1907 as an “Americanist” center for archaeology, went nearly dormant for two decades in the mid-20th century, due to funding woes.

The charity’s $3-million annual budget makes it possible for 10 to 12 artists and scholars to live in residence. The organization has received about $1-million in the past four years from the Anne Ray trust, which it has used to start an internship program for young Native American college graduates who aspire to high-level academic or museum positions.

Mr. Kantner says the charity is planning a capital campaign to increase the number of fellows on the campus. But regardless of the ultimate support from the Anne Ray trust, the organization doesn’t plan to expand by more than 50 percent, he says.

“We don’t have a grandiose view of doing something radically different here,” Mr. Kantner says.