Subsidizing Elkhart – Next City

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Subsidizing Elkhart

Philanthropy in an Age of Shrinking Government

Story by Edward McClelland

Illustrations by Tim Pacific

Published on Mar 24, 2014

Elkhart, Ind., population 50,000, calls itself the Recreational Vehicle Capital of the World. More than half the RVs in the U.S. are built here, and the city even has an RV Hall of Fame, with an exhibit telling the story of camping on wheels from the days of hitch-up silver trailers to modern, live-in Winnebagos. As it turns out, the RV business is fantastically profitable when Americans have money and horribly unnecessary when they’re broke.

“It’s a non-essential industry,” said Al Hesselbart, author of The Dumb Things Sold… Just Like That!: A History of the Recreational Vehicle Industry in America. “It’s a luxury. It’s a toy. Very few people have to have an RV. In all the major declines in the economy –– World War II, the Arab Oil Embargo, the early ’80s — the RV industry is the first to go down, and the first come back out.”

The Great Recession hit Elkhart harder than any city in the U.S. When Americans were losing jobs and gasoline cost $4 a gallon, few people could afford a $100,000 bedroom suite on wheels that burns a gallon of gas every 10 miles. In 2009, 21 percent of Elkhart residents were unemployed, most of them workers laid off from RV factories. Church Community Services, Elkhart’s busiest food pantry, saw visits increase by 42 percent, from 15,239 to 21,700, between the 2007-2008 and 2008-2009 fiscal years. The Elkhart County Community Foundation, a charity established by local businessmen in the 1980s, lost 20 percent of its endowment after the stock market crash, but still sent Church Community Services an unsolicited $13,000 to help straitened RV workers pay rent and utilities. President Obama made three appearances in Elkhart during the Great Recession — twice as a presidential candidate, in a successful bid to become the first Democrat to carry Indiana since Lyndon Johnson, and then in his first trip out of Washington after taking office, to promote the American Recovery and Reinvestment Act.

During his last trip, the president asked a laid-off RV worker named Ed Neufeldt to introduce him before a speech at Concord High School. Neufeldt had worked for 32 years in the mill room at Monaco Coach Corp., sawing wooden parts for RVs. But when Monaco went bankrupt, Neufeldt was out of a job.

“We were at a high unemployment rate,” Neufeldt said. “There were a lot of plant closings and a lot of people lost their jobs. It was really bad. Our church kind of helped us out. We had 50 or 60 people that were laid off. A lot of us, we went to the Faith Mission.”

Not everyone in Elkhart was broke. A few times a year, the city received a visit from a native son who had earned his vast fortune by founding, and then selling, an insurance business in the United Kingdom. David Gundlach flaunted his wealth, driving his Rolls-Royce to the Elcona Country Club, to which his family had belonged since he was a child. He invited friends to his mansion on the Elkhart River — one of two million-dollar homes he owned in the city — to fire vintage pistols on his private indoor shooting range. Gundlach had left Elkhart as a teenager to attend college in California, and he wasn’t particularly well known around town. But after he produced an independent film starring Bill Murray, Robert Duvall and Sissy Spacek, the Elkhart Truth featured him on its front page.

Gundlach’s few Elkhart friends knew he was rich, but nobody knew just how rich until 2011, when he died at the age of 56. He had never married, and his only living relatives were his 93-year-old mother, to whom he left a $5 million trust, and an aunt. The rest of his money — $140 million — he willed to the Elkhart County Community Foundation, to spend however the organization saw fit. It was an extraordinary bequest from a multimillionaire to a community that barely had enough of a cushion to make it through a lean year.

The Chronicle of Philanthropy named Gundlach one of the top ten most generous donors of 2012. Even more extraordinary, Gundlach didn’t tell Elkhart how to spend the money. Most big donors leave their fortunes to a specific cause or institution, according to David Hammack, a history professor at Case Western Reserve University and co-author of A Versatile American Institution: The Changing Ideals and Realities of Philanthropic Foundations.

“I think, in general, $150 million bequests are not that common,” Hammack said. “And usually, the donor wants to have a say in how the money is used. It may be for opera, religion, public health problems in East Africa. In this case, there are no strings attached.”

That the Elkhart County Community Foundation succeeded in winning Gundlach’s trust has as much to do with a bored, lonely millionaire’s quest to create a meaningful life for himself as it does with his connection to the Indiana city. Gundlach’s attempt to break into Hollywood had left him feeling burned, used and disillusioned. As he told a friend near the end of his life, “When I’m around people from Elkhart, I feel like I’m a better person. Whenever I’m around these other people, I don’t always like myself.” When he died, Gundlach was making plans to devote himself to philanthropy in his hometown.

Gundlach’s money did not only arrive at a crucial moment for Elkhart, it arrived at a crucial moment for municipal philanthropy. In an era when governments are cutting back their spending — often as a result of tax cuts that allow people such as Gundlach to amass enormous wealth — community foundations are paying for projects and services that were once the responsibility of the private sector.

A Guy Who Needs You

When Gundlach was seven years old, he lost his father, a Los Angeles insurance man. He and his mother moved to Elkhart to live with her parents, and the boy decided that he would carry on the family’s unfinished business. He began telling family members that he would someday buy Lloyd’s of London, the world’s most famous insurance firm. In its ambition and practicality, Gundlach’s plan showed a precocity that anticipated both his later success and his eccentricity.

In Gundlach’s youth, Elkhart’s prosperity was not so dependent on the RV industry. Miles Laboratories, later swallowed up by Bayer and relocated to Connecticut, still made Alka-Seltzer, Flintstones chewables, One-A-Day vitamins and Bactine in town. Gundlach’s grandfather and uncle were small manufacturers, so his family was well off enough to join the country club, though not enough to join the local gentry of bankers, car dealers and corporate executives.

Liz Borger, a childhood friend of Gundlach’s, remembered him as a champion debater and student government leader whose mind was well suited for academics, but less so for the subtle aspects of human interaction. “He was always a little bit of a nerd, just a little socially awkward,” Borger said. “What you noticed about him was that he was always really, really bright. Just on a different plane.”

Gundlach never bought Lloyd’s, but he worked there as an information technology specialist for IBM. Then he broke away to found his own agency, Hastings Direct. The low-cost insurer made so much money that Gundlach moved into a fashionable London mansion and, in 2006, sold Hastings to Insurance Australia Group Ltd. for $260 million. But when he threw a party to celebrate the acquisition, almost none of his invited guests showed up. For all the money he’d made in England, Gundlach hadn’t made many friends.

“One of the guys who ran the company, his good friend and coworker, said he had dinner with him every night,” Borger recalled. “Maybe there wasn’t anybody else.”

After that humiliation, Gundlach sold his house in London and reappeared in Elkhart. The RV industry was still strong, enjoying one last year of the false prosperity of the 2000s. If there was any place where he could find true friendship, Gundlach thought, it would be his hometown, among people who had known him before he became wealthy. People such as Liz Borger and Bob Kloska, childhood peers who had built lives for themselves in Indiana.

Kloska, vice president for mission advancement at Holy Cross College in South Bend, received a mystifying message on his voicemail in 2007. It was a guy named David Gundlach, offering to take Kloska and his father on a pontoon ride down the St. Joseph River. Kloska vaguely remembered the name but couldn’t connect it to a flesh-and-blood person, so he called his father.

“This guy left me a message,” he explained. “Refresh my memory, Dad. I can’t remember who he is.”

“Don’t you remember the guy we played golf with?” said Irvin Kloska, Bob’s father.

Then the younger Kloska remembered. During the summers of his youth, he worked at the Elcona Country Club, to which his family belonged so his banker father could interact with wealthy clients. For a few of those summers, the club had been frequented by a tall, overbearing, intense man who was always alone and always looking for partners. Some club members were reluctant to play a round with him, because he often burst into angry denunciations of his own game. He was also a guy who had high standards of excellence and didn’t hesitate to tell others when they weren’t meeting it. This rubbed self-regarding country clubbers the wrong way. The Kloskas, however, always played golf with the awkward, solitary man. But they never really befriended him, and after he stopped showing up at the course Kloska forgot all about him. Their lives moved in divergent directions. Kloska got married and started building a family of five children. Gundlach moved to England, and got rich.

Whenever Gundlach was in Elkhart after that phone call, he golfed with Kloska or treated his new-old friend to a large family dinner at the Olive Garden. Over long, heavy meals he seemed to enjoy the company of Kloska’s children more than he did that of most adults. (The Olive Garden was also his mother’s favorite restaurant. Although Gundlach owned two houses in Elkhart, he usually stayed with his mother, because she cooked his breakfast.) Kloska knew Gundlach was far out of his league, financially, so he struggled to negotiate — and even to justify — a friendship with a man who threw away his shirts and boxer shorts after one wearing. As it turned out, the two men complemented each other. Gundlach had money but no social skills. Kloska had social skills, but no money.

Once, while eating breakfast with Kloska and his wife Margy, Gundlach delivered an hour-long lecture on the Peloponnesian War. Overwhelmed by the professorial detail, Kloska’s wife went into another room to watch a sitcom. When she returned, Gundlach was still talking — and hadn’t even noticed she was gone.

“He came back, tried to connect, and he just didn’t know anybody,” Kloska said. “Even though this was his place, he knew a lot of people at a great distance, but he didn’t have many close friends. I felt compassion for him. He wanted friendship. I felt maybe God put me in his life because I’m one of the few people that can try to be his friend and love him for himself and not try to get anything from him.”

Small towns can be clubby, even to a long-lost native, and Gundlach eventually realized he wasn’t going to be welcomed back into Elkhart society, at least not in the way he had hoped. Gundlach wanted friends who didn’t value him for his money, yet he courted them with vacations and dinners and seemed disappointed when they weren’t grateful. The financial gap, along with his quirky, demanding personality, made forming neighborly bonds nearly impossible.

“There’s nothing for me here,” he told Kloska. “I’m going to go make movies in Hollywood.”

Kloska thought that was just another of his friend’s bored millionaire schemes, but Gundlach — who had been born and gone to college in Los Angeles — bought houses in Beverly Hills and Malibu and began looking for a script to finance. It wouldn’t be the last time he tried to help make a performance happen. Years later, Gundlach would offer to underwrite a production of his favorite Broadway musical, Pippin, at Elkhart’s community playhouse, Premier Arts. The theater’s artistic director, Craig Gibson, was hesitant. The 1970s show, about a prince who wanders Europe looking for his “corner of the sky,” struck him as too racy for small-town Indiana. But Borger said she understood why Gundlach wanted to share the story with Elkhart.

“David reminded me a little bit of Pippin,” she said. “I think he was willing to try anything to be happy. I’m not sure David ever found happiness. David loved to have deep conversations about faith and politics and banking systems and money. He could tend to get to the argumentative side, sometimes, but he could also be hugely charming. He had a booming laugh — for some people, maybe a little too loud, but you always noticed when David was around.”

In Hollywood, there was less hesitation about taking Gundlach’s production capital. He settled on financing Get Low, brought to him by Dean Zanuck, grandson of Darryl F Zanuck, the legendary studio chief and 20th Century Fox founder. A film about a cantankerous old man who plans his own funeral, Get Low was, like Pippin, a story that may have had resonance in Gundlach’s own life. Give me signed contracts from Robert Duvall and Bill Murray, he told Zanuck, and I’ll give you $5.5 million.

“What you noticed about him was that he was always really, really bright. Just on a different plane.”

Among movie stars, there’s a tradition of structuring poker games around a rich interloper who has gambling money to burn. The outsider gets access to celebrities, and the celebrities get a high-stakes opponent. Gundlach, whose mathematical mind made him a competent player, was able to arrange games with Leonardo DiCaprio and Tobey Maguire. But when it came time for the Get Low premiere, he insisted that Kloska fly out to Hollywood, because he wanted a real friend there.

Kloska had his doubts. Being a religious man, he turned to the mother superior of Sisters of St. Francis convent in Mishawaka, as he does occasionally, for advice.

“With every fiber of my being, I don’t want to go,” Kloska told the mother superior. “The last thing I want is to enter that world. Hollywood is not my thing.”

“You have to go,” the nun told him. “This is a guy who needs you.”

Kloska went, and found himself in a theater with Duvall and late-night talk show host Jimmy Kimmel. (Murray didn’t show up.) At the party afterward, in Gundlach’s Malibu beach house, Kloska toasted his friend’s success.

“I’m not successful,” Gundlach countered. “I’m rich.”

Philanthropy and the City

The community foundation, in general, is exactly 100 years old. Back in 1914, Cleveland lawyer and banker Frederick H. Goff established a “community trust” to bring together the city’s philanthropists and leaders. Today, the Cleveland Foundation has a $1.8 billion endowment. The goal was to secularize and professionalize private giving, which had mostly been carried out by Protestant denominations or tycoons such as Andrew Carnegie, who built libraries in an attempt to reform his robber-baron image. A uniquely American institution, these locally focused foundations fall somewhere between the philanthropy of Carnegie or John D. Rockefeller, who wanted to forestall taxation by demonstrating that enlightened individuals could take care of social problems, and the activism of European social democracies, which provide for all their citizens’ needs.

“The general expectation in a lot of places is that people will pay higher taxes because they would rather have these things done by elected officials with tax dollars than having them done privately,” said Robert E. Gleeson, an adjunct professor of ethics, history and public policy at Carnegie Mellon University. “In Eastern Europe, the act of having some plutocrat spend money is often seen more as a way to have very wealthy people control the public sphere.”

During the Great Depression, when taxes were high and faith in private institutions low, community foundations withered. In our own era, when private fortunes and economic inequality are the highest they’ve been since the 1920s, community foundations play as large a role in public life as they ever have. Gundlach’s bequest put more money into the hands of the local gentry, of which he was a member, to advance its own ideals of public investment. (The current chairman of the community foundation board is the ex-CEO of Heritage Financial Group, a privately held management company.)

“If we don’t have careful stewardship, it can become a hands-out, gimme-money mindset,” Borger said. “This money is meant to motivate further giving, motivate good hard work that elevates the quality of life. It’s not meant to be a gimme. But frankly, I think this is going to be one of the most exciting case studies of what can happen to a community.”

Community foundations have traditionally supplemented the work of local governments. The Cleveland Foundation, for instance, helped bring the city’s park system into being. It established an endowment to protect and develop parks, while local government assembled the land and built the actual spaces. In Washington, D.C., the Capital Hill Community Foundation partnered with the public school system to renovate school libraries after they fell into disrepair. Private money could guide public investment, but not replace it.

Then, last year, Detroit went bankrupt. The city’s creditors — bondholders and pensioners — began eyeing the Detroit Institute of Art’s collection, whose worth Christie’s has pegged at between $454 million and $867 million. To save the museum, local foundations decided to raise money equal to the art’s value and put it into the city’s pension fund. The Kresge Foundation donated $100 million, the Ford Foundation $125 million. The state of Michigan matched the private donations. It was “one of the most significant interventions of philanthropy in the private sector,” said Rip Rapson, Kresge’s president and CEO. Kresge has also pledged $35.1 million to build a light rail line from the Detroit River through Midtown. After the auto industry collapse and the foreclosure crisis of the late 2000s, “it became clear that there simply wasn’t the capacity on the part of the private sector or the public sector to keep the momentum going” for the project.

Detroit’s problems are unique, but the city has also become an economic warning signal to the rest of the country. Will other foundations follow Kresge’s example and begin funding public projects? And would that be an undemocratic use of private dollars to drive public policy? For his part, Rapson said that foundations will become more “embedded in the community fabric,” becoming a “fifth sector” after government, business, non-profits and academia.

In an era when governments are cutting back their spending — often as a result of tax cuts that allow people such as Gundlach to amass enormous wealth — community foundations are paying for projects and services that were once the responsibility of the private sector.

Look no further than the empire of billionaire Michael Bloomberg, the three-term former mayor of New York who made his fortune providing data to Wall Street, for evidence of this sector’s growing influence on cities. Bloomberg Philanthropies gave away $452 million, much of it to cities and urban institutions, in 2013 alone. It will give hundreds of millions more this year to improve urban systems, some of it through a new consulting organization designed specifically to offer pro-bono services to cities.

“We have heard this huge demand and need from other cities to learn from New York City,” said Amanda M. Burden, who served as director of city planning in the Bloomberg administration and who plans to join the consulting group.

“The squeeze that’s on municipal budgets has caused a real crisis in community philanthropy,” said Gleeson, the Carnegie Mellon historian. Propping up the public sector “doesn’t solve any long-term problems in public finance, and it depletes the philanthropic dollars that are supposed to be the icing on the cake, not the batter.”

Gundlach’s last attempt at using his fortune to create a meaningful life outside Elkhart was in Las Vegas, where he began plans for a charity focused on 18- to 25-year-olds leaving the juvenile system. He envisioned apartments, mentors and outreach programs. He bought property for the program, Kloska says, and hired some employees. He even bought a house in Las Vegas with a go-kart track. Knowing nothing about working with ex-offenders, however, Gundlach grew discouraged and abandoned the project.

“I think that kind of led him to think, ‘Maybe I should just go be with my people,’” Kloska said. “He was also acutely aware of Elkhart’s economic situation. My impression was that he felt very badly for what the people in his hometown were going through. I think it was a combination of the recession and his personal connection with Elkhart.”

In summer 2011, Pete McCown, a business professor at Bethel College in Mishawaka, Ind., had just been recruited to run Elkhart County’s struggling community foundation. The charity still suffered from the effects of the stock market collapse, which reduced its endowment from $55 million to $43 million. Its disbursements are based on an average of its endowment for the past 16 quarters, so the diminution of its assets was by then fully reflected in its giving. McCown had not even started his new job when he got a phone call from Gundlach’s attorney, Mike Pianowski.

“I have a client I’d like you to meet,” Pianowski told McCown. “He spends most of his time on the West Coast, but he’s here for the month of July. Do you have time to meet?” Beset with back and heart problems, Gundlach had a premonition that he would die young, and was in a hurry to set up his estate.

When they met in Pianowski’s office, Gundlach told McCown that he had included the foundation in his estate plan, but didn’t specify how much he planned to give. That fall, before any decisions were made, Gundlach died of a heart attack in his Malibu mansion. The date was October 16, 2011.

“He suffered quite a bit,” Borger said. “He had pain in his arm and his back. The pain he didn’t talk about was the pain in his heart. Physically, he had a heart condition, but I also learned he was disappointed in people a lot. He’d befriend them and then be disappointed by the level of friendship. I think he felt used, quite often, or frustrated. He’d say, ‘I let so-and-so used my home for a week. I told them I’d pay for everything, and I’ll be doggone if they didn’t turn in a $23 gas bill. You’d think they could have paid for a tank of gas.’”

As executor of Gundlach’s estate, Borger spent more than a year liquidating and transferring its assets. He had owned 15 cars and 11 homes, including a condominium in Gibraltar to take advantage of its tax laws. Most of his fortune was in a Swiss bank account. Except for his mother’s share, everything he owned went to the foundation. Even the Mark Chagall painting that now hangs in McCown’s office and the Salvador Dali sculpture that sits his desk, as well as titles to personal loans, country club memberships and the rights to Get Low, which still produces residuals. (The foundation keeps two more Chagalls, another Dali, a Picasso and a Renoir in a vault.)

“He never told us we were the beneficiaries the vast majority of his estate,” McCown said. “If we had guessed, it might’ve been, ‘Well, we might get $500,000, or we might get $5 million, or we might get $50 million.’ Never in our wildest dreams did we think that we were the dominant beneficiary, and that he had $150 million-plus worth of estate wealth.”

Even then, it didn’t seem real until one afternoon in August 2012, when McCown was lunching with Borger at McCarthy’s on the Riverwalk, a restaurant her husband partly owns. A call came for Borger on the house phone. She returned with a note confirming the wire transfer of Gundlach’s Swiss Bank account to the foundation. That one keystroke quadrupled the foundation’s assets. After the news of Gundlach’s gift appeared on the front page of the Elkhart Truth, McCown received up to 250 emails a day from residents proposing their charitable causes.

He quickly convened a series of focus groups with members of Elkhart County’s many constituencies. He met with the Amish and with Latino immigrants. He visited a homeless shelter and addiction recovery center to learn how the foundation could help drug abusers overcome their habits. At the county jail, he asked caseworkers and probation officers what ex-offenders needed. At a homeless shelter, a recovering methamphetamine addict sat his daughter on his lap and told McCown, “Mister, I kind of made a mess of my life and I’m glad Faith Mission is here to help me make better choices and shake this demon. If you do anything, mister, would you please make sure that my daughter doesn’t go down the same path, that she has an opportunity to graduate from high school.” (In 2012 Indiana ranked third in the nation for meth lab busts, and Elkhart had the fifth highest number of seizures among the state’s 92 counties in 2013. Elkhart County saw more meth lab busts than the entire state of Texas in 2012.) During the Council on Aging’s luncheon at the Presbyterian Church, the old folks told him the foundation should spend the money on parks and education for children.

McCown visited about three-dozen other foundations including Indianapolis’ Eli Lilly, whose $7.3 billion dollar endowment is more than 33 times the size of Elkhart’s. By 2016, when Gundlach’s money is fully integrated into its giving, the foundation will spend $10 million a year, which comes out to $50.09 for every resident of Elkhart County.

The Politics of Giving

Indiana is a conservative, low-tax state. During the recession its governor was George W. Bush’s former budget director, Mitch Daniels, who reduced annual spending increases from 5.9 percent to 2.8 percent and cut property taxes by $870 million. An economic downturn during a period of government austerity added to the demands on the Elkhart Community Foundation. “Indiana’s state public funding and the state’s aggressive reduction of tax structures fits in that intersection of public good,” McCown said, “and the community fund certainly finds itself right in that intersection.”

The foundation does not spend money in areas it considers exclusively the job of government, such as public safety and education. (That said, McCown acknowledged, “we do respond to some of the issues that result from reduction in public funding,” which has led the foundation to support early childhood education and kindergarten readiness.) Instead, the foundation has seen its role as supporting cultural and economic development endeavors that are either too expensive or too politically difficult for the city to support. After an observation tower burned down at Oxbow Park, for instance, the foundation sent a $32,000 grant to help replace it. The group has also built bike trails and rescued an ArtWalk that the city could no longer fund.

Several projects that Gundlach considered funding during his lifetime have already been pledged money. Child and Parent Services (CAPS), which has typically received between $10,000 and $25,000 a year, sees an opportunity for “hundreds of thousands” — enough to buy notebook computers for staff who perform home visits and to bring the Triple P program to Elkhart County. Triple P, a parenting program that aims to prevent behavioral and emotional issues in growing children, has spread to 25 countries. In May, CAPS will fly the program’s founder from Australia to Indiana. Launching Triple P will cost $1 million over the next three years, something that Candy Yoder, CAPS’ executive director, said would have been impossible without Gundlach’s money.

“We couldn’t have done it at this level before,” Yoder said. “We looked carefully at the whole thing and said, ‘We can’t bite off that whole thing at once.’ This opportunity is making it possible for us to really think about putting programming in place that will have a broad impact.”

The Crossing Educational Center has seen its support increase fivefold, from about $20,000 a year to $100,000. The school used the money to buy equipment for an entrepreneurial training center operated by students, who spend half their days in the classroom and half in the center itself, where there’s a tree-trimming business, woodworks and car restoration outfit. A $27,000 wood chipper pulverizes the branches. A $25,000 Wood Mizer sawmill cuts logs into boards, which students assemble into pallets that they sell to local businesses. Those two pieces of equipment together cost $52,000 — about $27,000 less than the cost of locking up a juvenile for a year in Indiana.

Rob Staley, the Crossing’s director, delivered the invocation at Obama’s 2009 appearance in Elkhart. Yet he praised Gundlach’s gift for giving the city an opportunity to address community problems without turning to elected officials. In Indiana, a quintessentially small-town and small-government state, that’s appealing. “What the [money] has allowed us to do is pinpoint special needs,” Staley said. “We’re putting the money under a microscope and saying, ‘Where are the sore spots in the community we can attack without layers of bureaucracy?’”

Gundlach died before he could fulfill the pledge he made at his Malibu mansion, to establish a Holy Cross College scholarship for the families of dead servicemen. That $2 million will come from the foundation, which agreed to fund a scholarship based on emails Gundlach sent to Kloska.

Is this an undemocratic method of distributing resources? It’s private investment but, as Kresge’s Rip Rapson pointed out, it isn’t concerned with making a profit. “One of the criticisms of philanthropy is that there’s not the level of accountability that the public sector has,” Rapson said. “Most of the capital in cities is in the hands of the private sector, and they’re making decisions every day with no accountability to anyone but their shareholders.”

The size of government grew enormously as a result of the Great Depression. Modern-day philanthropists like Bill Gates possess fortunes nearly as large as Rockefeller’s, but one man, no matter how wealthy, can no longer match the financial power of collective action. And one man, no matter how wealthy, cannot change of fortunes of a city whose problems run deeper than money. The Mott Foundation in Flint, Mich. has a $2.3 billion endowment, but has not been able to prevent its hometown’s slide into poverty, urban blight and violence, which resulted from the loss of 80,000 General Motors jobs. Elkhart County’s seven school districts — the organizations most responsible for the welfare of the community’s children — have a combined annual budget of more than $360 million. Even if the foundation exhausted its entire endowment in a single year, it could only provide two-thirds of what the public spends on children.

“Never in our wildest dreams did we think that we were the dominant beneficiary, and that he had $150 million-plus worth of estate wealth.”

Can Gundlach’s money fundamentally change Elkhart, or can it only pick up the slack left by shrinking municipal budgets? Both McCown and the foundation’s recipients hope it can diversify the local economy, both through funding a private economic development corporation that works to recruit new business to Elkhart County and through providing job training for the unemployed.

“We always know that the economy cycles,” said Rod Roberson, executive director of Church Community Services and an at-large Elkhart city councilmember. “We believe that part of resiliency is having transferable skills, not just depending on one [industry]. We rebuild against the unemployment that exists now. We hope that we can put some bottom in and it says [that] Elkhart doesn’t have to be there at 20 percent unemployment again.”

Before Gundlach’s gift, Roberson said, the money-strapped organization suffered from “the tyranny of the urgent” — the same short-term financial restraints that prevent its clients from improving their lives. Church Community Services asked the foundation for $250,000, part of which will help start a job training program that aims to put men to work making and selling a food product. The foundation came through on $100,000. The men, Roberson hopes, will learn job skills to prevent them from having to visit the pantry in the future. And Elkhart, so dependent on a single industry, will have little more economic diversity.

Gundlach as a Model

Elkhart County’s fortunes are far better now than they were during the recession. The RV companies are hiring again. The unemployment rate has fallen to 7 percent. Elkhart’s suffering was cyclical, not terminal like the problems of auto or steel cities such as Flint and Youngstown, Ohio. The RV industry may slump from time to time, but it won’t move to Asia. After all, the RV is a uniquely American product with little appeal outside the U.S., and it’s not cost effective to ship such a big, empty vehicle overseas.

“I think we’re a lot better off than we were four years ago, when I introduced President Obama,” said Ed Neufeldt, who passed up a chance to go back to work in an RV factory and now supports himself with three part-time jobs. “When he came to Concord High School, there was I don’t know how many plant closings. Now there are hardly any empty buildings. All my sons-in-law are back working.”

Few people in Elkhart knew David Gundlach when he was alive. Only 50 or so mourners attended his funeral at St. Thomas Catholic Church, and he still isn’t a household name. Mention the $150 million donor at the RV Museum and you get this response: “What was his name? Gierach?” But most people in Elkhart know that someone gave a lot of money to the community. As a result, others decided to do the same. One couple who approached the foundation wanted to establish a violin scholarship in the name of their late son, a promising musician. McCown agreed, and offered to match 25 percent of any gift up to $100,000. Gundlach, who felt so much disappointment with the rest of the world, had admired the generosity of entrepreneurs he’d met at the Elcona Country Club, and hoped someday to emulate them. Now, in the afterlife, he has inspired others to emulate him.

Gundlach didn’t make his fortune in the most enlightened manner. You could argue that he profited from the very economic stratification that has made philanthropy more important in the 21st century. And he spent that money self-indulgently, on displays of wealth that failed to provide the friendship and esteem he craved. He may even end up doing more for the world after death than he did in his life. (A lot of people said the same about Rockefeller and Carnegie.) For now, in a time when government is being stripped down until it can provide only the most basic services — and not even those, in some cities — we’re going to need more David Gundlachs.

Our features are made possible with generous support from The Ford Foundation.

Edward McClelland was born in Lansing, Mich. His book Nothin’ But Blue Skies: The Heyday, Hard Times and Hopes of America’s Industrial Heartland was released in May 2013 by Bloomsbury Press and was inspired by seeing the Fisher Body plant across the street from his old high school torn down. His book The Third Coast: Sailors, Strippers, Fishermen, Folksingers, Long-Haired Ojibway Painters and God-Save-the-Queen Monarchists of the Great Lakes won the 2008 Great Lakes Book Award in General Nonfiction. Like so many Michiganders of his generation, he now lives in Chicago.

Tim Pacific is an award-winning graphic design student entering his senior year at Rutgers University in Camden. In addition to his schoolwork, Tim is an active freelance illustrator. His work can be seen in AIGA Philadelphia’s SPACE, which features a recently completed series of hand-lettered postcards. Among his design philosophies, Tim believes strongly that concept comes first and you should absolutely judge a book by its cover design.