Sunderland family’s sale of Ash Grove Cement Co. touches off a philanthropic temblor across the region.
To change a community, and to engage in philanthropy at its highest levels, a good many factors must come into play: Chance. Coincidence. Vision. Focus. Collaboration. Commitment.
“The company was at a peak value, new assets were coming back to the foundation, so that would be our full-time career: becoming philanthropists. And that’s what we’re doing now.” —Kent Sunderland
All were present, in some fashion, with the Sunderland Foundation in 2018. Bursting with cash following the $3.5 billion sale of its corporate sire, Ash Grove Cement Co., in the fall of 2017, the 73-year-old foundation shot to the upper echelon of regional non-profits, measured by asset size. It climbed past revered institutions bearing such iconic names as Kemper, Bloch, Hall and Nelson, representing family fortunes that have long been pillars of philanthropy in Kansas City.
And the Sunderlands put those proceeds to work on behalf of the community in a big way this year, including more than $140 million packed into just two gifts. By themselves, they will finance large-scale projects expected to assert a new prominence for this region in health-care delivery and research.
For those contributions, and for the tens of millions of dollars in additional gifts to organizations in higher education, human services and youth-focused groups, and arts and cultural organizations, foundation principals Kent and Charlie Sunderland are Ingram’s Philanthropists of the Year for 2018.
Things began moving quickly toward creation of this blockbuster foundation in the past two years. With no fifth-generation interest coming into the company, it was time for the natural evolution of business growth to take its next step. “The timing worked out well,” says Kent Sunderland. “The company was at a peak value, new assets were coming back to the foundation, so that would be our full-time career: becoming philanthropists. And that’s what we’re doing now.”
Another factor leading towards the sale: Nearly a third of the value of the Ash Grove sale proceeds took the form of a trust that reverted back to the foundation after the death of a family member in California. Almost overnight, a foundation with a respectable asset total approaching nine figures grew nearly 10-fold, on its way to roughly $1.5 billion at its command.
With an asset infusion on a scale Kansas City hasn’t seen in a non-profit since the Ewing Kauffman era, the foundation’s principal players assessed regional needs in a new light, and moved quickly. Among them were Kent as president, older brother Charlie as secretary/treasurer, and six other family members (including the brothers’ five children) on the foundation board.
They saw in the new year with a remarkable gift of $75 million, matching the Hall Family Foundation dollar for dollar in a $150 million boost to create the Children’s Research Institute at Children’s Mercy Kansas City, the region’s premier pediatric hospital. In September, the Sunderlands again pushed the limit on numbers of zeroes that can be etched onto a check, committing $66 million to the University of Kansas Health System to finish its Cambridge Tower expansion project.
Those two initiatives bookended a litany of smaller donations that have been staples of the Sunderland Foundation’s mission for four generations of leadership. Lester Sunderland died in 1955, his son Paul died in 2004, and James Sunderland died in 2015. Since assuming the mantle of foundation leadership as the new millennium dawned, Kent Sunderland has carried on that family legacy.
With only the support of the others on the board and a foundation staff of presently three, he has been point guard for the philanthropic offense, distributing the financial ball to hundreds of organizations over the years. Between 2013 and 2017, the foundation issued more than 600 individual grants—most in the range of $50,000 to $100,000, and fewer than 10 of them exceeding $1 million.
In that span, a workload of diligence on 100 grants issued ballooned to more than 200 in 2017, and the grant totals skyrocketed from roughly $5-$7 million a year, doubling to more than $15 million in 2016 and doubling again in 2017, to nearly $31 million. That set the stage for this year’s mega donations.
The major deals to health-care institutions, Kent said, were largely circumstantial: The foundation has never wavered from its four-point mission. The fact that both the KU Health System and Children’s Mercy were into major expansion drives at the same time was purely coincidental.
“Children’s Mercy was interesting and unique—it was brought to us by the Hall Family Foundation,” Kent said. That foundation was committed to seeing Children’s Mercy move into clinical research, and had backed that up with a $75 million pledge “so they approached us about matching. Something that’s been said is that deal was 40 years in the making—Don Hall and my dad had known each other for years and years.”
A few years ago, Charlie—a longtime member of the board for the University of Kansas Hospital—underwent a bone-marrow transplant there. The $66 million allows the health system to finish the top three floors of its new Cambridge Tower expansion. Fittingly, that space will be the new home of the bone-marrow transplant unit.
“We sat down with Bob Page to put numbers to what it would cost to finish; that’s where we came up with the $66 million,” Kent said. “The timing worked out, we can do this over a three-year period, the same with Children’s Mercy, and it will go toward finishing the building and BMT moving in. Hopefully, they will treat a lot of patients.”
The bulk of this, of course, doesn’t come about without last year’s sale of Ash Grove to Ireland-based CRH, previously an Ash Grove client, but one 10 times the Overland Park company’s size.
“Ash Grove,” says Kent, “was a true family-owned business. We had some outside shareholders, but the family controlled over 70 percent of shares. Even as it got larger, it still had kind of that family feel when my brother and I were running it, and my uncle and Dad before that. My grandfather came to the office until he was 100; he lived to be 107. But people enjoyed working for the Sunderlands.”
That made for a difficult decision when the company went on the market. The infusion of the California shares to the
foundation created an excess-business-holding issue, and regulations to limit self-dealing prevented the leadership from selling those back to the company. “We thought the best thing to do was go to the market, and we had five or six potential buyers,” he said, before settling on CRH.
“CRH had the same culture that we wanted to see our people go to,” Kent said.
What would Lester Sunderland say if he could see the harvest from the sapling he planted 73 years ago? “I think he would be amazed,”
said Kent. “I don’t think he ever envisioned what this would become,
what the size of resources this would be.”
James Sunderland, too, would applaud. “Dad was interested in growing Ash Grove, growing it from the 1960s to 2000, and it went from $100 million to $1 billion in revenue, a lot of that under his watch. He would recognize the value and, I think, be very supportive of what we’re doing today. He passed in 2015, before the discussion got to that point on the sale, but I think he would certainly understand what’s going on today and be proud. He was a great philanthropist in own right and a great civic leader.
“I think he would welcome the opportunity for us to do what we’re doing now.