The Walton family has quietly amassed a special fund of at least $400 million that will likely go mainly to higher ed institutions in Arkansas one day. What's not known is when that money will start moving out the door in big chunks and who'll get it.
Some background: Close observers of Walton World know that there are two huge philanthropic continents on this planet: The Walton Family Foundation, which handles the family's giving, and the Wal-Mart Foundation, which handles the company's giving—a company still 48 percent owned by the family.
But wait, real insiders know there is a third mass of wealth in Walton World: The Walton Family Charitable Support Foundation.
This entity has no website and no grants application process, and it's hard to say whether it even has a real organizational infrastructure. But one thing is clear: the Walton Family Charitable Support Foundation is sitting on a big pile of money. According to its tax returns, the foundation had assets of $77 million in 2008. Then, the next year, the Walton Family Foundation gave the foundation $100 million and in 2011, the Walton Family Foundation gave the Walton Family Charitable Support Foundation $209 million—which brought its total assets close to $400 million.
We don't have tax records for 2012 and 2013 yet, so for all we know that pile of money is even bigger now. And while $400 million may not be a lot of money in Walton World, it's a lot of money anywhere else. So what's all this cash for?
While details are sketchy, the Walton Family Charitable Support Foundation was apparently set up to support higher education in the state of Arkansas. As Rob Walton once said, when asked why the family had two foundations, "One is a support organization. That means it is specifically designated to give to public and private colleges in Arkansas."
That's not the whole story, however. Or at least not the case now. According to its tax filings, the legal mission of the Walton Family Charitable Support Foundation is relatively broad, including not just funding colleges and universities in Arkansas (there are about 50 such institutions), but also "community trusts or foundations operating in Arkansas, Kansas, Missouri, Oklahoma and/or Texas." That's a lot of potential grantees, particularly in Texas.
While the Walton Family Foundation only has family members on its board, the Walton Family Charitable Support Foundation's board includes a single Walton—Jim Walton, who chaired its board as of 2011—and then five outsiders, all prominent leaders in Arkansas. The foundation's president that year was Kaneaster Hodges, Jr., a wealthy real estate investor and lawyer who briefly served as a U.S. Senator and who is a philanthropist himself, long involved in higher education. Hodges once described his politics as "middle of the road." He is a longtime family friend and receives no compensation for his work for the Walton Family Charitable Support Foundation.
The only person on the foundation's payroll, at least circa 2011, was its vice president, Rick Niece, who was also the long-time president of the University of the Ozarks (he retired last year.) Niece was paid over $300,000 by the foundation in 2011, even though the foundation didn't seem to do much of anything. Nice work if you can get it, I suppose—although, in fairness, that payment seems to have effectively have been a donation to the University of Ozarks to supplement Niece's university salary, which was $259,7098 in 2010.
By far the biggest gift made by the Walton Family Charitable Support Foundation was in 2002, when it was the vehicle through which the Walton family gave $300 million to the University of Arkansas, which may still stand as the largest gift ever made to a public university.
Since then, the foundation has given out very few grants on an annual basis. In 2012, for example, WFCSF joined the Walton Family Foundation to fund an expansion of the Sam Walton School of Business at the University of Arkansas. Yet over the past few years, as noted earlier, it's been building up its assets much faster than it has been depleting them. Which may mean that the Walton Family is planning another historic gift in Arkansas via the Walton Family Charitable Support Foundation.
Such a gift would likely go to higher education, judging by the foundation's past giving.