An old article in Fortune magazine showed one Indianapolis businessman that money can lead to happiness or pain—it's
just a matter of choice.
Local radio pioneer Richard M. Fairbanks read how dollar signs destroyed families when children fought over their inheritance, and he vowed not to allow that to happen to his heirs.
So in 1986, more than a decade before his death at age 88, the business mind behind Fairbanks Communications started his namesake foundation with a $5,000 seed gift and a desire to help the people of Indianapolis.
Twenty years later, the Richard M. Fairbanks Foundation has blossomed.
Its assets now worth $311 million, the charitable organization awarded 84 grants totaling nearly $22 million in 2005. Already this year, it has announced another $24.5 million in high-profile, high-dollar gifts that will ensure the Fairbanks name isn't forgotten.
The Indianapolis Museum of Art is set to receive an $11 million challenge grant—the foundation's largest yet—to endow the Virginia B. Fairbanks Art and Nature Park in honor of Richard Fairbanks' widow, who lives in Florida. The foundation gave IMA a separate $4 million grant to develop the park in 2003.
Other large grants awarded this year include $10 million that will be used to create the Fairbanks Institute, an Indianapolis not-for-profit medical research center in collaboration with BioCrossroads and the IU School of Medicine; and $2 million for the Indianapolis Zoological Society's Virginia B. Fairbanks Horticulture Fund, an endowment to care for the zoo gardens and landscaping.
As the foundation's assets grow, it has to give away more money to satisfy IRS payout requirements. Foundation President Leonard Betley said the recent large grants were simply the result of good timing, as the foundation looked for signature projects to support. But medium-size grants of $100,000 to $1 million will remain the organization's "bread and butter," he said.
Even so, foundations nationwide increasingly are giving larger grants to fewer organizations, said Brian Payne, president of the Central Indiana Community Foundation.
"It makes you feel like you're having a bigger impact," he said.
Richard and Virginia Fairbanks contributed a lot to the city and were known for their generosity, Payne said. The foundation is carrying on that tradition.
All told, the foundation has awarded $66.5 million in major grants—those over $1 million—since 1999.
"The Fairbanks name is popping up everywhere," Payne said, citing the art park and the research center. "When your name's on something that significant, it certainly puts you on the map."
After graduating from Yale University, Fairbanks went to work for The Indianapolis News, which his grandfather bought as part of an investor group in the late 1880s.
During World War II, the younger Fairbanks served in the U.S. Navy, as an officer on Adm. Chester Nimitz's staff in the Pacific.
After returning to Indianapolis, Fairbanks negotiated the 1948 sale of the News to Indianapolis Star owner Eugene C. Pulliam, and went on to form Fairbanks Communications, which owned WIBC radio.
Eventually, his company operated 20 radio stations nationwide, an Atlanta television station and assorted cable television systems. Other holdings included a charter airplane company and several real estate interests. Fairbanks also established the Indianapolis Motor Speedway Radio Network.
"Dick was a shy, but very distinguished, man-a gentleman," Betley said. "He lived in a different part of the country toward the end of his life, but Indianapolis was always considered his home."
Fairbanks created the foundation in 1986 because he wanted to leave a philanthropic legacy. He also set its focus: supporting causes related to health, self-sufficiency and the vitality of Indianapolis, plus organizations historically supported by his family.
That explains this year's multimillion-dollar gift to the IMA, and the $4 million gift it received in 2003 to develop the park.
The family had been a huge supporter of the museum, said Bloomington resident Elizabeth "Nicki" Mann, Fairbanks' stepdaughter and a foundation board member. Mann is the only heir who serves on the board. Her siblings do not live in Indianapolis.
Richard Fairbanks donated $1 million to the IMA before he died and served on the museum's board. And his wife of 32 years, Virginia, enjoys gardens.
"It honors my mother, who really had a lifetime love affair with gardens," Mann said. "Dick would have been pleased ... a major project like this has an incredible impact on Indianapolis."
"It was something Mr. Fairbanks had always wanted to do," agreed Betsy Bikoff, the foundation's vice president and chief grant-making officer.
Fairbanks was actively involved in the foundation, serving as its president until his death and making a series of gifts totaling nearly $108 million during his lifetime; another $132 million came from his estate.
Foundation assets have continued to grow despite the millions handed out each year, thanks to Fairbanks' generosity and a solid investment portfolio. In 2001, foundation assets totaled $123.4 million; by the end of 2005, its bank account had more than doubled—quietly moving the Richard M. Fairbanks Foundation into the ranks of the largest private foundations in Indianapolis.
Fairbanks Foundation has grown along with its peers.
The country's philanthropic community has expanded significantly in the last 20 years. The number of foundations has increased from 25,600 in 1985 to almost 68,000 in 2004, according to the New York City-based Foundation Center's 2006 "Foundation Yearbook." Their collective assets have grown from $102.1 billion to $510.5 billion in the same period.
Many foundations were created in the 1980s and '90s with the dot-com and stock-market boom, said Loren Renz, vice president of research at the Foundation Center.
"There was a tremendous growth in wealth creation and the foundation vehicle was seen as a way to contribute to the community," she said. "It's a long-term philanthropic model and a much more visible and transparent commitment."
And, like Fairbanks, many foundations start small and grow after the primary donor dies, said Susan Price, managing director of family foundation services at the Washington, D.C.-based Council on Foundations. But the trick is to be prepared to jump over the sudden obstacles that come with more assets.
The most obvious challenge is rising expectations from the community. More organizations will solicit a grant-making body when there are more resources available, Price said. Sometimes, a foundation may need to re-examine its mission, keeping in mind the donor's intent, in order to stay realistic in its grant-making goals.
"It's a lot of work to give away money and the trustees have to make sure they're being effective in their decisions," Price said.
The Fairbanks Foundation didn't have to deal with a noticeable increase in inquiries, Bikoff said, since Fairbanks died in Florida. And even as the assets have grown, the foundation intentionally has stayed small.
"We did it on purpose," Betley said. "We don't want the staff overpowering the board in decisions."
In fact, two of its four employees also serve on the six-member foundation board, which is composed mostly of Fairbanks' friends, colleagues and relatives. Not surprisingly, they have stayed true to the founder's wishes.
To preserve the foundation assets, board members typically give away the required 5 percent each year, leaving the remainder invested in the stock market, Chief Financial Officer Roger Snowdon said.
More than half of the grants awarded in 2005 went to health-related organizations, 14 percent of the gifts went to education, 11 percent to self-sufficiency, and 9 percent to Fairbanks family favorites.
The foundation does not predetermine how much each focus area will receive, Bikoff said, but health causes have dominated grant-making the last few years.
In addition to one-time gifts, Fairbanks Foundation offers renewable operational grants ranging from $5,000 to $20,000 to about 40 small organizations.
"Our foundation is very relationship-based," Bikoff said. "We want to stay connected to the city and community."
Not under the radar
That includes staying connected to the wealth of other foundations in Indianapolis.
With philanthropic heavyweights including Lilly Endowment Inc. and Lumina Foundation for Education—not to mention nine-figure up-and-comers like Fairbanks and the Nina Mason Pulliam Charitable Trust—Indianapolis is ripe for collaboration, CICF's Payne said.
If he sees that an organization received a grant from the Fairbanks Foundation, for example, Payne said he knows that group has been given a "seal of approval."
Each grant-making organization contributes to the city in its own way, said Harriet Ivey, CEO of the Pulliam Trust, which uses its $350 million to help people in need, protect animals and nature, and enrich community life in Indianapolis and Phoenix.
"There are some organizations that have much tighter agendas," Ivey said. "But if every single foundation here in Indianapolis became so tightly focused, there would be a lot of important and worthy needs that would not be met."
Fairbanks Foundation wants to do what it can. As its grants grow and the Fairbanks name keeps popping up everywhere, board members and employees know they are no longer under the philanthropy radar.
Bikoff said they aren't necessarily trying to become a high-profile foundation. They just want the community to prosper.
It was never Fairbanks' style to be a self-promoter, but he had big dreams for Indianapolis—something that's becoming increasingly clear.
"He was offended when wealthy people weren't in the community helping others," Betley said. "And through this foundation, that's never going to happen."