Shifting Foundations: A new generation taking control at venerable Pittsburgh institutions

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When leaders of Pittsburgh's largest foundation gathered in Ligonier last week to discuss a new round of grants, there were six new faces around the table, all grandchildren of the "General'' -- Richard King Mellon, a dominant civic figure of the post-World War II era and dynastic leader of one of the country's wealthiest families.

This new generation of Mellons -- all in their late 30s and early 40s -- soon could succeed their grandfather as stewards of the Richard King Mellon Foundation, holder of more than $1.7 billion in assets and among the biggest donors, year after year, to Pittsburgh-related causes. His two sons, Richard and Seward, still sit atop the foundation as chairman and chief executive officer, but both are in their mid-60s. The six grandchildren quietly joined the board last year to plan for a time when they would direct the spending of one of the country's 20 largest philanthropic institutions.

The generational shift at the Richard King Mellon Foundation is one of many happening at big family foundations across Western Pennsylvania, worrying some civic observers. While younger family members could inject new life and new perspective into institutions that hand out hundreds of millions of dollars every year, the shift in leadership also could sap economic development, education and social service spending from the area as the second, third or fourth generations establish roots elsewhere.

The more the younger Hillmans, McCunes, Heinzes and Mellons live out of town, "the worse off it will be for Pittsburgh," said one high-ranking foundation official. "Go a generation or two forward and I doubt a great deal of their money will be given here. Grant money goes where people live."

George Greer, of the Eden Hall Foundation, isn't as concerned. He doesn't think "a changing of the guard" at many of Pittsburgh's biggest foundations will result in "a full scale back-turning, if you will, on the Western Pennsylvania community. My guess is there will be not major change in emphasis from Western Pennsylvania."

How it all shakes out, in the end, may vary according to the internal politics, heritage and spending restrictions of each family. Here's a rundown of changes at some of the biggest, and oldest, foundations.

THE MELLONS
It is not yet known whether the six younger Mellons will push for any changes at the Richard King Mellon Foundation -- an organization that has spent heavily on the environment (more than $400 million since 1988 on the preservation of more than 400,000 acres) and promotion of Pittsburgh's connection to the French and Indian War.

Two new board members -- Alison Byers and W. Russell Byers Jr. -- are children of Constance Mellon and the late Russell Byers, a Philadelphia Daily News columnist stabbed to death in 1999 during a robbery attempt. Two others -- Richard A. and Armour -- are sons of Richard Prosser Mellon, the foundation chairman. And two more -- Catharine Mellon Cathey and Constance Elizabeth Mellon Kapp -- are daughters of Seward Prosser Mellon, the foundation CEO.

Foundation director Scott Izzo declined comment about the philosophy of the younger Mellons, saying the family does not seek publicity and "we typically don't talk to the press."

All six have houses in Ligonier, according to friends, and Richard, Armour and Catharine live permanently in that Laurel Highlands town, 50 miles from Pittsburgh. Constance, also called "Liz," had been living in Colorado, but Mr. Greer of the Eden Hall Foundation said she recently bought a new house in Ligonier and "she certainly has been around more. I've seen her around more than in previous years."

"I think all those Mellon kids have all maintained residences here in Ligonier and will continue to do that even if they live in other parts of the country. I think there is a sense of indebtedness to the communities that helped create the wealth." And the emphasis on environmental causes will continue, Mr. Greer said, "certainly with Liz and Armour. They are very interested in the land, conservation."

THE McCUNES AND EDWARDS
Of the five family members now on the board of the McCune Foundation, only Chairman Jamie Edwards lives in the Pittsburgh area. Mr. Edwards, who is in his 50s, replaced his father Richard as chairman about five years ago. Mr. Edwards' two brothers -- Mike and John -- live in Rhode Island and Connecticut. His cousin, Rob, lives in Oklahoma City and Rob's sister, Sarah, lives in Dallas. As a result, about 20 percent of the foundation's grants go outside southwestern Pennsylvania, "a practice that is likely to continue," according to the foundation's Web site.

The families are more involved now than they were in the late 1980s and early 1990s, when they vied with a bank representative for control of spending. A compromise allowed the families to make all decisions about grants and for Mr. Edwards to have control over the $150 million piece of the investment portfolio tied up in bank stock, initially Union National but, after a series of mergers, now National City.

More and more donations could leave Pittsburgh in the coming years as McCune accelerates its spending. Founder Charles McCune, who also was chairman of the former Union National Bank, asked that the foundation spend all of its money in 50 years, and it recently passed the halfway point in 2004. It has about $650 million left, giving away on average $25 million to $30 million a year. Those amounts will probably rise.

THE HEINZES
All three sons of the late U.S. Sen. John Heinz are now in their 30s and officially on the boards of The Heinz Endowments -- an organization identified with their mother, Teresa Heinz Kerry. Chris Heinz joined the Howard Heinz Endowment in November 2004 -- the most recent of the three appointments. John Heinz is also on the Howard Heinz board, and Andre Heinz serves on the Vira I. Heinz Endowment board.

The foundation would not talk about potential succession issues, but overtures have been made about the sons' increased involvement. None of the three currently has a permanent residence in the Pittsburgh area: Chris lives in New York, John has a farm in Delaware, and Andre lives in San Francisco. Howard Heinz restricts grant making to Pennsylvania, but Vira does not have such a restriction.

THE HILLMANS
Henry Hillman, the richest man in Pittsburgh and now in his 80s, is still chairman of both the Hillman Foundation and the Henry L. Hillman Foundation. He and his wife Elsie, who serves on both foundation boards, remain Pittsburgh's most active benefactors.

"I don't like to think about a world without Elsie and Henry Hillman," said Pat Getty of the Claude Worthington Benedum Foundation, a family foundation with only one original family member left on its board (Paul Benedum Jr.) who is in his 70s.

The Hillmans have four children. Of the four, two live in the Pittsburgh area -- Juliet Lea Hillman Simonds and Audrey Hillman Fisher. The other two -- Henry Lea Hillman Jr. and William Talbott -- are out-of-towners. The foundation would not talk specifically about succession planning, but "I think in the future, there will always be a member of the Hillman family affiliated with those foundations," said Ron Wertz, president of both Hillman foundations. "At this point, who that will be, under what circumstances, I don't know."

Each of the Hillman children, grandchildren and even great grandchildren have their own foundations -- which was Henry Hillman's idea. That way, descendants can donate money elsewhere, if they decide to live elsewhere.

THE BURKES
Chip Burke, grandson of the original donor to The Grable Foundation, took over as chairman in 2004, succeeding his father. Seven of the eight trustees are family members, and four of the family members live in the Pittsburgh area, including Mr. Burke, who said no change in funding philosophy accompanied the recent generational shift.

THE HUNTS
Todd Hunt Jr. retired last year as head of the Roy A. Hunt Foundation, created in 1951 by the family that founded Alcoa. The new chair of the executive committee is John Hunt, who lives in New Hampshire, and Bea Carter took over as day to day director, the first non-family member to run the foundation since its formation.

Six members of the fourth Hunt generation who recently turned 21 recently joined the 18-person board. Four of the six live in southwestern Pennsylvania. Of the 12 others on the board, only three live in the Pittsburgh area.

"Our family is all over the country," Ms. Carter said. "Probably a third of our grant money stays in Pittsburgh. A lot of it's practical. The trustees become involved with organizations or become interested in organizations in communities where they reside" -- the same shift away from Pittsburgh, she said, is happening with the Alcoa Foundation, also founded by Roy A. Hunt.

Sometimes, with family foundations, the movement away from the city of origin can be inevitable, unless there are strict geographic restrictions on spending. Succession "is always the biggest concern for family foundations. To maintain the interest of the next generation, you allow grant making in the communities where the trustees or directors reside," Ms. Carter said.


Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.


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