Xenophon Strategies

The Salvation Army

The Kroc Bequest

Philanthropist’s $1 billion gift presents a media challenge.

Project Highlights

• Strategic counsel
• Media relations
• Media monitoring
• Issues management

Overview

The Salvation Army sought Xenophon’s assistance in October 2003, just days after being informed that Mrs. Joan Kroc, wife of the founder of McDonald’s Corp., bequeathed virtually her entire estate worth in excess of $1 billion to the organization’s four U.S. territories.

News of a $1 billion gift could have potentially confused traditional donors into believing that the Army was without funding needs, when in fact, the opposite was true.

Mrs. Kroc specified that the donation must be split evenly among the territories and be used only for planning and building community centers similar to the one her previous $70 million donation had built in San Diego. Further, she stipulated that before any of the funds can be spent, the local Army organizations and their communities must raise funding in an amount equal to the cost of any community center. Finally, Mrs. Kroc ordered that none of her bequest ever be spent on operational activities of The Army.

While senior Army officials were humbled by Mrs. Kroc’s unprecedented largesse, they also knew that the announcement of this most unusual bequest would present a series of difficult challenges, among them:

Timing

Trustees of Mrs. Kroc’s estate were clear in their wishes that an announcement be made as soon as possible after the Army had been notified of the gift. For the Army, however, an announcement made too prematurely would have significantly impacted its most important fund-raising period of the year – the Thanksgiving and Christmas holidays. News of a $1 billion gift could have potentially confused traditional donors into believing that the Army was without funding needs, when in fact, the opposite was true – and doubly so because the stipulations of Mrs. Kroc’s gift required a fundamental, if not dramatic, change to local fund-raising.

National versus regional outreach

The Army in the United States is comprised of four independently operated corporations, called territories that cover large, geographic regions comprised of states and territories [i.e. Guam]. In the days before Xenophon was contacted, there were on-going discussions among senior Army leadership about the merits of announcing the gift regionally – in key territorial cities such as San Diego, or Atlanta – or nationally from the Army’s U.S. headquarters in Arlington, Va.

Messaging

The Army needed to be clear in its message about this gift – that Mrs. Kroc’s donation was for planning and construction of community centers and perhaps more importantly, that the organization’s local fund-raising would be challenged to uphold Mrs. Kroc’s vision. Certainly, the $1 billion did not mean the organization would be forever free and clear of funding needs.

Xenophon quickly convinced senior Army leadership that a national announcement from headquarters in late January 2004 was in its best interests. Managing the announcement in any other way would diminish the significance of Mrs. Kroc’s gift and present a disjointed picture to the media and public, still largely unclear that the Army is four corporations. The suggested late January date would be clear of the holidays and post-holiday fund-raising coverage.

A major focus of the agency’s strategy – and a key in convincing senior leaders – was utilizing The Wall Street Journal for the announcement. In the two days prior to the announcement, Xenophon began working with a Journal reporter responsible for writing about McDonald’s, providing access to senior Army leaders and Mrs. Kroc’s estate trustees, who were fully supportive of the strategy. Support materials, including b-roll of Mrs. Kroc, were prepared and distributed to each of the territories, and a news conference was planned for the National Press Club, coinciding with a ceremony honoring Mrs. Kroc at the San Diego community center. Xenophon was involved in every aspect of the announcement – from preparing internal and external materials, to coordinating the release of the print and electronic news releases, to media support and outreach.

Results

On the day of the announcement, The Wall Street Journal story was placed either on 1A or on the cover of the second section in domestic and international editions, and was picked up by major wire services, including The Associated Press, Bloomberg and Reuters. The news conference was covered by every major network, major radio networks, including NPR, The Washington Post and The New York Times. In addition to The Wall Street Journal’s placement on 1A on the announcement day, news of Mrs. Kroc’s gift was in a 24-hour broadcast and Internet news cycle, including network coverage on ABC, CBS, NBC, CNN and Fox on the evening of the announcement, and front page news the next day in the major newspapers in Washington, New York and Los Angeles, as well as cities across the country and around the world. Editorial pages subsequently picked up the story, as did major news magazines and philanthropic trades in the days and weeks following the announcement.

The coverage was as the Army had hoped – honoring a woman for uncommon dedication to a charitable organization while making certain her desires were clearly outlined, and the challenges posed for communities across the country were clearly stated. In the months following the announcement, news coverage remained consistent in outlining Mrs. Kroc’s designs for her money, and how communities were working with local Army organizations to build more than two dozen community centers across the country.