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The DEL E. WEBB FOUNDATION STORY
The history of the Del E. Webb Foundation (its origin, its past, its present, and its hoped-for future) is now being formalized for a number of reasons. The Del Webb Corporation originally known (and more fondly remembered) as the Del E. Webb Construction Company, ceased to exist with its merger into an unrelated parent company (Pulte Homes). The Del E. Webb Foundation was not affiliated in any way with the Del Webb corporation, but it was the Del Webb corporation that made the Foundation possible. Both entities were created by Del E. Webb but now, with that merger, he lives on only in his Foundation and in the memories of those who knew him. Also, we see the need for some historical record to inform all those who might be interested and to provide some guidance for future Directors.
With all of that said, let us now turn back to the year 1960, when it all began. Although the Del E. Webb Construction Company had been in existence since 1928, the Del E. Webb Foundation was incorporated in the State of Arizona in September 1960. The first Board of Directors consisted of Del E. Webb (until 1974), Hazel L. Webb (until 1967) and A.K. Stewart (until 1966). Their first meeting was held in October 1960, at which the By-Laws were adopted and Phoenix was designated as the principal office location.
(To see the Foundation's original IRS Determination Letter, CLICK HERE.)
There it remained until 1987, when it was moved to Wickenburg, Arizona, first occupying leased premises and then (in 1997) its own newly constructed office facilities at 101 Saguaro Drive. In 2006 the Foundation opened an office in Prescott, Arizona, and in October of 2007 the Wickenburg office was closed.
as told in January, 2002
In 1961, the Foundation received the first contribution from Del E. Webb and paid out the first grants. These were relatively minor in amount compared to those that followed in later years. The Foundation continued to operate on this low-key level until the mid 1970's, when it began to experience several major life changes. It suffered the deaths of Del E. Webb in 1974, W. J. Miller in 1975, Jarl Nerdrum in 1978, and John B. Milliken in 1981. On the positive side, the receipt in 1977 of the residual assets of the Estate of Del E. Webb (primarily over 2.8 million shares of the common stock of Del Webb Corporation, now a publicly-held company) changed the size and stature of the Foundation from small to one of Arizona's largest and most prestigious. R.H. Johnson (who had also been with the Corporation since 1935 and was its President from 1967 to 1981) became President and Chief Executive Officer of the Foundation. His leadership has been a major force in the Foundation's direction and growth over the years.
The newly acquired assets significantly increased the Foundation's annual grant pay-out requirements, and its policy guidelines were then more formally set. Because of Mr. Webb's high regard for the medical profession and his general concern for health matters, grant emphasis would be placed on those organizations providing medical services, engaging in medical research, or operating educational facilities in the states of Arizona, California and Nevada. These policy guidelines have remained unchanged since then.
In the latter part of 1982, in order to have assets liquid enough to pay out the annual grant requirements, the Foundation sold all of its shares of Del Webb Corporation for $28.2 million cash. In early 1983, these funds were placed with four investment managers, chosen after interviewing a large number of possible candidates. Eventually, those four were reduced to one - the one whose performance over several years was the best. The overall performance from their inception in 1983 was outstanding enough to enable the Foundation, in the years 1961 to 2001 (but mostly from 1984 on), to pay out $55 million in grants, pay its administrative costs (under 1% of total assets in every year) and its federal excise taxes, and still have $57 million of assets (at fair market value) remaining.
The grants paid out were significantly in excess of the Internal Revenue Service minimum requirements, and were to over 200 separate charities in amounts ranging from very small to quite large. We consider our flagship grants to be the Del E. Webb Memorial Hospital in Sun City, Arizona and the Del E. Webb School of Construction at Arizona State University in Tempe, including several related scholarships. However, we are also very proud of all our other grants, large or small, among them:
Arizona State University in Tempe
(for the Del E. Webb Chair in Molecular Biology)
California Institute of Technology
Eisenhower Medical Center in Palm Desert, California
(for the Del E. Webb - Eisenhower Health Center)
Foundation for the Retarded of the Desert
in Palm Springs, California
Fresno Adventist Academy, Mr. Webb's alma mater
(for the Del E. Webb Alumni Hall)
Grand Canyon National Park Foundation
House Ear Institute in Los Angeles, California
(for the Del E. Webb Otological Research Wing)
John Tracy Clinic in Los Angeles
Kingman Regional Medical Center in Arizona
(for the Del E. Webb Wellness Center)
Little Company of Mary Hospital in Torrance, California
(for the Del E. Webb Health Education Center)
Loma Linda University in California
(for the Del E. Webb Memorial Library
and the Medical Center Proton Beam Facility)
Mayo Foundation in Scottsdale, Arizona
(for the Del E. Webb Laboratory
in the Johnson Research Building)
Navajo Nation Health Foundation in Arizona
Northern Arizona University in Flagstaff, Arizona
(for the Del E. Webb Dental Outreach Program
and other projects)
Salk Institute for Biological Studies in La Jolla, California
(for the Del E. Webb Foundation Wing)
Santa Teresita Hospital in Duarte, California
(for a new surgical wing)
Scottsdale Memorial Health Foundation
(for the Del E. Webb Health Center of Carefree, Arizona)
St. Joseph's Hospital and Medical Center in Phoenix
(for the Del E. Webb Emergency Trauma Center)
St. Mary's Food Bank in Phoenix, Arizona
(for the Del E. Webb Distribution Center)
St. Rose Dominican Hospital in Henderson, Nevada
(for the Del E. Webb Medical Plaza)
Sun Health Foundation
(for the Walter O. Boswell Memorial Hospital in Sun City,
Arizona and the Del E. Webb Health Center in Wickenburg, Arizona)
University of Arizona Cancer Center in Tucson
University of California at Los Angeles,
Department of Medicine
University of Southern California School of Medicine
Wickenburg Regional Health Care Foundation
in Wickenburg, Arizona
(for the Del E. Webb Wellness Center and
the Wickenburg Community Hospital)
Yavapai Regional Medical Center
in Prescott Valley, Arizona
(for the Del E. Webb Outpatient Center)
Coming now to the present, it is important that this history not end here but, as they say, mark the beginning of the rest of the Foundation's life. With that thought in our minds we hope that this history will provide future management with some policy direction which, if adhered to, will ensure the solid continuity of the Foundation. We believe that we have already begun to fulfill that obligation by the example we have set. As R.H. Johnson has frequently said to thankful grant recipients and to others, this is Mr. Webb's money and we Directors are only the trustees trying to use it as he would want. That fact has guided all of our investing and grant-making decisions, and it is hoped that it will guide all of such decisions of future Boards.
We are well aware that someday the Del E. Webb Foundation will be managed by Directors who did not know Mr. Webb or do not know much about him/or his companies. Still, we would like to think that those who follow us will share our heart-felt intent to carry out his wishes and our sincere hope that the Foundation will live on forever, and in a manner that would have made him proud of his creation and immensely pleased with all of the good things being done with his bequeathed wealth. That is precisely what he envisioned back in 1960.
In 1960, Del Webb took steps to ensure that his personal generosity would extend far beyond his lifetime. He formed and incorporated the Del E. Webb Foundation, a private, self-funded, non-profit charitable foundation that promotes and engages exclusively in charitable, educational, medical services, and medical research activities of a public nature.
The foundation, which by 1997 had made grants totaling more than $50 million, started out as a conduit for Webb to make small personal donations to various causes. "Before his death, as I understand it, the contributions were largely in the two hundred- to three hundred-dollar category" noted Bob Johnson, then president of the foundation.
At the end of the year, Jim Miller, who was the company treasurer, would total it up and hand Mr. Webb a sheet and it would be around two thousand dollars. "Mr. Webb would write a personal check and that would go back into the construction company or the corporation so that the corporation wasn't making the contribution; it was Mr. Webb personally," he said.
Upon Webb's death, however, all that changed. Both of Webb's marriages were childless and his vast personal fortune was more than adequate to provide for his first wife, Hazel, and for Toni Webb, whom he married in 1961. So, according to his wishes, the residual assets of Webb's estate were distributed to the foundation. The most significant of those assets was his Del Webb Corporation stock, which the foundation sold in 1983 for $28.2 million. That money, carefully invested and managed over the years, enabled the foundation to substantially increase its grant activities.
"We hired a consultant who selected about fifty money managers. From that we reduced it to maybe sixteen and then down to four: Trust Company of the West in Los Angeles; Wentworth, Hauser and Violich in San Francisco; Dreyfus in New York; and M.D. Sass in New York," Johnson remembered. "Sass and Dreyfus received $7 million apiece and Trust Company and Wentworth Hauser each received $5 million. We asked for at least an 8 percent return on the investment; that's what we expected out of their management. Over the next few years, as the process was refined, the four money managers were reduced to a single firm. Dave Duncan, the individual at Wentworth Hauser with whom we dealt, resigned from his firm. We stayed with Dave, since he was the one we knew and who had done the best for us as far as return," Johnson said. "They sued him because they said he had coerced us to leave with him. We stood up for him, I appeared in court, and ultimately he won. He then formed the partnership of Duncan and Branson and is now our money manager and, frankly, he's done just a fantastic job."
Indeed, the earnings on Webb's original bequest have made the foundation one of the largest charitable organizations in Arizona. By 1998, the foundation had not only given away $50 million, but its assets had a market value of more than $60 million. Johnson, who became CEO of the Del Webb Corporation in 1973, also took on the job of president of the foundation when Webb died the following year. Johnson retired from the corporation in 1981 but continued with the foundation.
Marjorie Klinefelter, who had worked for Johnson for many years, moved to the foundation as its secretary. Johnson and Klinefelter have been assisted over the years by several directors, including Del Werderman, Owen Childress, and Lawrence Johnson, all of whom have had long associations with either the company or Del Webb personally. "We all feel very privileged to be the ones who administer these funds," Klinefelter said. "We hope, and would like to think, that we are doing it in a way that Mr. Webb would have wanted it done."
The foundation, which was originally based in Phoenix and is now headquartered in Prescott, Arizona, makes its grants only to organizations that operate in Arizona, California, and Nevada. Johnson noted that, despite its sizable value, the foundation is a relatively small one. This requires the need for limits regarding its areas of participation. "In the early days, before we established the basic policies, we were getting requests from all over, places like China and South America, " Johnson said. "It stemmed from one of our early grants to a large organization. The word immediately got around and we starting getting many, many requests. I remember Judge Milliken, who sat on our board at the time, saying, 'We'd better get some guidelines.' Since Webb's company had had a division office in Los Angeles, California, the gaming operation in Las Vegas, Nevada, and headquarters in Phoenix, Arizona, the decision was made to offer grants to recipients in those states only."
Although the geographic limits were based on company locations, Johnson emphasized that the Del E. Webb Foundation is a completely separate entity from the Del Webb Corporation. The two operate independently, although at times the things that the foundation does might coincidentally benefit the corporation. "For example, the corporation was considering a development in Prescott Valley and there happens to be a Del E. Webb medical center there. It could have benefited the corporation, but it was coincidental," Johnson said. "Because of our non-profit status, we cannot and do not do something specifically because the corporation is developing in a certain area."
The foundation's emphasis on grants for projects dealing with medical research or services grew out of Webb's interest in health matters. Webb, who was very health conscious, required his executives to have yearly physicals. Johnson remembered: "After a physical, the doctor would discuss the results with us, tell us if anything was wrong. Mr. Webb, then, would get a copy of the report from the doctor and take it to Dr. Horton at the Mayo Clinic. They would discuss it. Then he'd come back and you got called in and 'Dr. Webb' would give it to you. He was always interested in that, so that's one of the things we set out as a primary function for the foundation: medical research or bricks-and-mortar medical or medical equipment; anything having to do with medicine."
The foundation has supported a wide variety of medical-related and educational projects over the years with amounts from a few thousand dollars to major grants in excess of $1 million. Recipients range from a reading service for the blind to major universities and medical centers. All recipients are non-profit organizations. "Right now we're trending toward larger donations, although we still do many smaller ones, to get Mr. Webb's name associated with the project," Johnson noted.
By 1997, the Sun Health Foundation had received the largest share of the foundation's funds for two projects. The Del E. Webb Memorial Hospital in Sun City was supported by $5.5 million in grants awarded in 1985 and 1992, while the Del E. Webb Health Center in Wickenburg received $1.6 million in 1996. Sun City's Walter 0. Boswell Hospital also received $578,000 in 1981 toward construction of its facilities. Loma Linda University Medical Center in Loma Linda, California, was next in total grants, with $3.85 million in 1978 for its Del E. Webb Memorial Library. In 1990, Loma Linda also received $500,000 in support of its Proton Treatment Facility, where patients undergo proton-beam therapy for both benign and malignant tumors. This therapy delivers a beam of particle energy sufficient enough to reach the deepest tumors. It is particularly valuable for treating localized, isolated solid tumors before they spread. The Del E. Webb Foundation made a further donation of $1 million in 1993 to establish a research endowment aimed at facilitating further research in proton therapy.
Other recipients of major medical-related grants include the University of Arizona in Tucson for its Cancer Center ($3.63 million in 1986); Scottsdale Memorial Health Foundation for the Del E. Webb Health Center of Carefree, Arizona ($2 million in 1995); the University of Southern California in Los Angeles for the School of Medicine ($1 million in 1990); the House Ear Institute in Los Angeles in part for the Del E. Webb Ontological Research Wing (a total of $1.48 million from grants awarded in 1981, 1985, 1988, 1993, and 1996); the Salk Institute for Biological Studies in La Jolla, California, for the Del E. Webb Foundation Wing (a total of $1.18 million from grants awarded in 1979, 1989, and 1991); the Eisenhower Medical Center in Palm Desert, California, for the Del E. Webb-Eisenhower Health Center ($1 million in 1996); the Little Company of Mary Hospital in Torrance, California for the Del E. Webb Health Education Center ($1 million in 1995); the St. Joseph's Hospital and Medical Center in Phoenix for the Del E. Webb Emergency Trauma Center ($1 million in 1994); and the Yavapai Regional Medical Center in Prescott Valley, Arizona, for the Del E. Webb Outpatient Center ($1 million in 1997).
Many programs have received smaller dollar amounts, but the funding has been steady over several years. One such program has been a dental program at Northern Arizona University in Flagstaff that offers service to the homebound. As part of their training, students go out to visit people who either cannot get to a dentist or cannot afford to go to one. The students, who are supervised at all times, travel a wide area of northern Arizona, including the American Indian reservations. "We've been supportive of this program for seven or eight years," Johnson said. "It totals less than six figures, but it is what keeps them going. They want to expand the program by bringing in more students, adding more supervisory people, and expanding the area of operation. It will almost triple our contribution to them for the next few years."
While medical-related requests receive first consideration, the foundation has funded a number of education-related requests as well. The largest such grant went to Arizona State University in Tempe for the Del E. Webb School of Construction in the university's College of Engineering and Applied Sciences. "We'd studied a lot of options at ASU for buildings with Mr. Webb's name. We did a lot of construction over there, the stadium way back and a couple of buildings. It just came up: the School of Construction. It hit us as being one of the things that we were trying to accomplish with Mr. Webb when he was alive, to do something at ASU," Johnson remembered. "This just happened to fall into the right category at the right time."
The foundation allocated $4 million for the school in 1991 as an endowment to fund professorships and ensure its continuance. Ironically, since the university made space available in the College of Engineering, it was not necessary to build additional space to house the School of Construction. The school is one of only two schools of construction in the United States and one of thirty-seven accredited programs. Its purpose is to produce graduates skilled in construction management, perform leading-edge research that will benefit both students and the construction industry, and to provide a link between education and industry. The foundation provided additional money to the school for computers and funded a $100,000 scholarship. Klinefelter noted that, following in the spirit of Webb and the foundation, Johnson personally established a $150,000 R.H. Johnson scholarship to benefit the school as well.
Webb's alma mater, the Fresno Adventist Academy in Fresno, California, received a $500,000 grant in 1994 for the Del E. Webb Alumni Hall. The California Institute of Technology received several education-related grants from 1979 to 1997 that totaled $1 million.
As with the medical-related grants, the foundation has donated smaller amounts to many other kinds of organizations, some over a number of years. "We've been supportive of things like Sun Sounds, a reading service for the blind in Phoenix, for many years," Johnson said. "We've been supportive in a relatively minor way. For example, in 1996 there was a big power failure and they couldn't get on-line. We gave them money for a generator so they could operate continuously. Then we gave them another grant so they could get a satellite dish and now they can beam their operation to the entire state of Arizona."
The foundation's board of directors meets quarterly to review grant requests. Every applicant must fill out a request and provide a certain amount of material in support of that request. Each director gets a copy of all the material submitted, does whatever research is necessary to make a decision, and then votes to approve or reject a request for funds.
"We've only had two negative experiences in awarding grants," Johnson noted. "One was a group that misrepresented themselves, which we discovered during a meeting with them. The check had been given to them, but it was there at the meeting and we took it back. In the other case, the recipients notified us that they were not going to be able to do what they had planned with the money. They asked if we wanted it back, which we did, so they sent it back."
The foundation has been recognized twice by the Greater Arizona Chapter of the National Society of Fund Raising Executives (NSFRE). In 1995, Johnson and Klinefelter were presented the Spirit of Philanthropy Award in recognition of the foundation's gift to Scottsdale Memorial Health Foundation for the Del E. Webb Health Center of Carefree. The foundation also received the 1997 Outstanding Foundation Award based on its leadership and financial and moral support of many greater Phoenix non-profit organizations.
Johnson observed that the credit belonged to Del Webb: "We directors are only the trustees of Mr. Webb's money. We try to do with it what we believe he would do or, under the circumstances, want us to do. Given Mr. Webb's fascination with the medical profession and all of its marvelous achievements, he would have been immensely pleased to know how many good things his foundation makes possible, and that his name is prominently associated with so many worthwhile medical and educational endeavors."
The members of the board of directors had a close relationship with Del Webb. In 1997, for example, the board was made up of five members who had a combined association of 205 years with Webb and/or the corporation. "If you knew Mr. Webb, you had some feeling about how he felt about these things and what he would have wanted done," Klinefelter said.
While it will become more difficult and ultimately impossible to seat a board with members who had a personal relationship with Del Webb, his spirit of generosity will continue through his foundation just as his spirit of entrepreneurship continues through his company. Perhaps Del V. Werderman, a foundation director since 1986, said it best: "To all those who worked for or with Del Webb, or who otherwise knew him, it is now obvious that the two major monuments to his memory are the Del Webb Corporation and the Del E. Webb Foundation. Although the two entities are distinctly different and are not affiliated in any way, it was the genius and generosity of the same man that originated both. Through them, he still lives."
On July 31, 2001, the merger of Pulte Homes, Inc. and Del Webb Corporation formally closed.