Richard Schulze, the billionaire founder of Best Buy, stepped down as the retailer’s CEO more than 20 years ago, and launched what’s become Minnesota’s fourth-largest private foundation.
Schulze is now doubling down on donations for health and wellness initiatives, giving out major gifts to Minnesota and Florida hospitals this year, including this week’s record $25 million to Allina Health.
The philanthropist — one of the richest Minnesota natives — said he’s more than halfway to his goal to give away $1 billion over his lifetime. He’s directing most of it to organizations in the Twin Cities, where he was born and spent most of his life, and Florida, where he now lives.
“He didn’t want to just be remembered for Best Buy and for his business success,” said Mark Dienhart, CEO of the Richard M. Schulze Family Foundation. “This was an important part of what he wanted to have as a legacy.”
At 82, Schulze is also looking ahead, planning for his foundation to exist for a century, led by the next six generations of his family. He said the foundation will get a “substantial piece” of his estate, likely surpassing other major Minnesota foundations in assets.
“Obviously I’m blessed with wealth. I believe strongly in, those who are benefited with meaningful wealth have an obligation to give back to community,” Schulze said in an interview this week at the Westin Edina Galleria hotel he owns, his first foray into buying hotels and resorts.
Minnesota has a robust philanthropic sector, thanks in part to the number of Fortune 500 companies started in the state. The Twin Cities is home to several major foundations, including Margaret A. Cargill Philanthropies in Eden Prairie (named for one of the heirs to the Cargill company fortune) and the McKnight Foundation in Minneapolis (started by a former 3M CEO), as well as many corporate foundations set up by companies like Target and General Mills.
The Schulze Family Foundation is much younger than many foundations in the state and has a quiet presence, so it may not be as well known to the public, said Susie Brown, president of the Minnesota Council on Foundations. But Brown said the foundation has a reputation for its “strong commitment to hometown giving and really giving back to where this business was built.”
Schulze, whose net worth is estimated by Forbes at $3.8 billion, launched the Edina-based foundation in 2004, two years after stepping down from Best Buy as its CEO. He’s still the largest shareholder, with a nearly 11% stake in the Richfield-based consumer electronics chain that he started as Sound of Music in St. Paul in 1966.
This year, the foundation and Schulze personally are on pace to distribute $50 million, up from about $5 million a decade ago — about 60% of which goes to Twin Cities organizations, Dienhart said. The foundation, funded by Schulze’s Best Buy stock and wealth, has $257 million in assets and gives out about 15% a year — more than the usual 5% that foundations distribute.
“He’s made sure our punching weight is about the size of a $1 billion foundation right now,” Dienhart said.
Shifting away from research
The foundation has 14 employees and a 10-member board that includes Schulze and two of Schulze’s four children, who decide which grant applications to accept.
The foundation is shifting its focus from funding medical research — like the $50 million it gave to Mayo Clinic in 2005 — to improving health care treatment in more immediate ways than the often long-term, unreliable results of research. Schulze said he’d rather spend his money on proven successes that help patients immediately.
“There are a lot of misses before there’s a hit,” Dienhart added. “He likes to see results and he always reminds me he’s 82. … What is really important is the here and now, the kind of treatment a patient receives.”
In addition to the gift to Allina this week — the largest in Allina’s history — the foundation gave a $20 million five-year grant to NCH Healthcare System in Naples, Fla., to support a new heart and stroke center, and a $5.5 million gift to Children’s Minnesota in Minneapolis for a neurosciences program this year.
For Allina, the generosity comes at a time when its been plagued by financial losses and layoffs.
“They’re under stress right now, and he recognizes how important they are to his home community,” Dienhart said. “He believes this is the right thing to do when times are tough.”
Hometown philanthropy
It’s personal work for Schulze, whose father, grandfather and uncle all died from strokes. His late wife, Sandy, died from mesothelioma, a rare cancer, prompting him to support organizations like the American Cancer Society’s Hope Lodge program, housing cancer patients.
While the billionaire no longer lives in Minnesota, he said he still prioritizes giving to the Twin Cities — where he grew up in a middle-class home in St. Paul and raised his family. Besides his four children, he has six stepchildren and 38 grandchildren.
Schulze, who has received some criticism for conservative political donations in the past, said he would rather put his money toward charitable causes than political efforts, arguing that it takes too long to see results in the slow pace of government.
Schulze has given millions of dollars to the University of St. Thomas, where he attended, as well as the University of Minnesota and hundreds of Twin Cities nonprofits. He created a Best Buy disaster relief fund to help employees after crises. And in 2020, when Best Buy furloughed about 40% of its retail workforce at the start of the COVID-19 pandemic, Schulze helped establish a $10 million fund for workers.
While he has no formal role with Best Buy, Schulze still meets with CEO Corie Barry to provide insight. He also has a private investment company that owns commercial real estate and a real estate investment firm.
“I live on the beach and I enjoy looking at the water, but that’s about it,” he said of his active retirement. “The rest of it is constantly thinking about ways in which I can make the world a better place.”
Minnesota’s top five private foundations by giving
- Margaret A. Cargill Philanthropies: $241 million
- McKnight Foundation: $83 million
- Otto Bremer Trust: $57 million
- Richard M. Schulze Family Foundation: $44 million
- GHR Foundation: $36 million
Source: 2019 data, Minnesota Council on Foundations’ Giving in Minnesota 2021 report
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