Five years after Joan B. Kroc, widow of the founder of the McDonald's Corporation, left $1.8 billion to the Salvation Army so it could build thirty state-of-the-art community centers across the nation, plans for many of the facilities are sputtering, the New York Times reports.
Although Kroc left enough money for each center to have an endowment equal to the cost of construction, the Salvation Army also required each community to raise additional funds, amounting to $628 million nationally. To date, the organization has received gifts and commitments totaling just 34 percent of that amount, or $214 million, a spokesperson told the Times. At the same time, the value of Kroc's original gift has been battered by the economic downturn, causing the portion of it reserved for endowments to fall to $774 million, a decline of 14 percent.
The gift from Kroc has always rested uneasily with some Salvation Army officials, who have a hard time reconciling the centers — which feature swimming pools, indoor ice skating rinks, and large theaters — with the organization's mission of serving the needy. And now the plans are proving difficult to finance, leading local groups in Detroit and Massena, New York, to scrap their proposed Kroc centers, while the futures of other centers remain uncertain. "The Salvation Army is not immune to the economic climate in which we find ourselves," Lt. Col. Ken Johnson, the Salvation Army's secretary for business administration in the southern territory, told the Times. "When Mrs. Kroc gave her gift, it was a different economic world."
Although deep-pocketed donors in some regions have stepped in to help, fundraising has stalled in other parts of the country. For instance, a planned center in Long Beach, California, is struggling to raise $25 million, while centers planned for Chicago and New York City are in need of $50 million and $200 million, respectively.
Still, several communities have completed their projects and seven more are scheduled to open by the end of 2010. Indeed, fundraisers for the Kroc Center in Philadelphia believe that starting construction now will help spur donations. "Some folks are less capable of giving because of investment returns and asset values being less, but they still want to hear from us," said Raymond Welsh, a senior vice president at UBS Financial Services and chairman of the Philadelphia fundraising committee. "Some are saying not now, but that's not no forever."