Considered by some to be the “most successful real estate investor of all time,” Sam Zell in 1986 founded the Zell Family Foundation. Over the past four decades, the Chicago-based foundation has emerged as among the most reliable supporters of Chicago-based organizations focused on education, arts and culture, and medicine, as well as national groups and Jewish causes.
From 2019 to 2022, it disbursed an average of $22 million per year. In May 2023, Sam passed away at the age of 81, and the foundation ultimately received $159 million in contributions from his estate and trust in the fiscal year ending December 2023.
Trustees could have socked the money away and, as in previous years, disbursed roughly $22 million to grantees. Instead, in the fiscal year ending December 2023, ZFF disbursed 70 grants totaling $133 million — a 505% increase over its previous four-year average. For those of us who think philanthropy should be putting more money into the hands of working nonprofits rather than slow-dripping 5% of noncharitable assets for perpetuity, ZFF’s approach was a commendable one.
All of this raises the question of whether ZFF’s turbo-charged 2023 grantmaking was a one-time phenomenon or the first step to permanently position the foundation, now chaired by Sam’s widow, Helen Zell, in the upper echelons of Chicago-based givers. If trustees are leaning toward the latter option, it would require Sam’s estate to contribute additional funds to the foundation lest it find itself on an accelerated path to spending down.
Fortunately, a lack of cash shouldn’t be a problem, as Sam’s net worth was $5.2 billion at the time of his death.
An overview of Sam Zell and the Zell Family Foundation
Zell was born in 1941 in Chicago, just four months after his parents arrived in the U.S., having fled Poland following Germany’s invasion.
Sam made his fortune by investing in real estate, often buying distressed properties and reselling them for a huge profit. One of the companies he founded, Equity Residential, went public in 1993 and is now a $31 billion company that owns or has ownership interests in multifamily units across the U.S. Another company, the office property owner Equity Office Properties Trust, was sold to the Blackstone Group for $39 billion in 2007.
In this interview with talent management firm Ferguson Partners, Zell noted that, over time, he refocused his “philanthropic objectives” to “very narrow fields where I thought there was a real attempt and hope to make a difference.” A survey of publicly available information shows that these fields included higher education, arts and culture, and medical research. Zell, who did not sign the Giving Pledge, also said, “Everybody’s worried about the inequality; [the] reality is I’m going to give away this money, and I’m going to give away billions of dollars.”
Related Inside Philanthropy Resources:
For Subscribers Only
Helen, Sam’s widow and ZFF’s executive director, is the chair of the board of trustees of the Chicago Symphony Orchestra Association. She also serves on the board of Chicago’s Steppenwolf Theatre and the Museum of Contemporary Art Chicago (MCA), among other organizations. Sam’s three children — Kellie, Matthew and Joann — were listed as vice presidents on the ZFF’s 2023 Form 990. The Zell Family Office website, which acts as a clearinghouse for the family’s business holdings, lists five affiliated foundations, including the Matthew Zell Family Foundation.
After Sam passed in May 2023, Crain’s Chicago Business’ Brandon Dupré lamented that the city “lost a big giver to city arts and education groups.”
In October, Northwestern University’s Kellogg School of Management announced it received a $25 million gift from the ZFF to endow the Zell Fellows Program. Two months later, the Chicago Symphony Orchestra Association announced it received a $50 million gift from the ZFF as part of its “SEMPRE ALWAYS” capital campaign, which is chaired by Helen and has raised $220.4 million to date. “I’ve been a champion of the Chicago Symphony Orchestra for many years,” Zell said in the CSO’s press release, “and I think about this gift as an investment in preserving the CSO’s future,”
A closer look at the Zell Family Foundation’s 2023 grantmaking
Like many other private family foundations, the ZFF doesn’t have a public website, so we can somewhat safely assume that it does not accept unsolicited requests. We can, however, dig into the ZFF’s Form 990s to see where the money flowed.
The ZFF’s five largest grants in the fiscal year ending December 2023 included three to Sam and Helen’s alma mater, the University of Michigan, totaling $75 million. The foundation also made big gifts to organizations named after Sam’s parents — Chicago’s Bernard Zell Anshe Emet Day School ($24 million) and Rochelle Zell Jewish High School in Deerfield, Illinois ($9.5 million).
About 60% of grants flowed to organizations based in the Greater Chicago region. Recipients included the Joffrey Ballet, the Chicago Symphony Orchestra and the Chicago Public Library Foundation. National grantees included the American Civil Liberties Union, Birthright Israel Foundation, the Mayo Clinic, Los Angeles’ Hold on to Your Music Foundation and the U.S. Holocaust Memorial Museum. The ZFF didn’t pay its nine officers a dime in 2023, so practically all of its $133 million in qualifying distributions came in the form of grants.
All of which brings us back to whether ZFF will keep the grantmaking spigot open in 2024 and beyond, or revert back to its pre-2023 annual grantmaking average of $22 million.
We should be careful not to read too much into any foundation’s Form 990s, but the ZFF kept its net assets in this mid- to upper-$200 million range from 2019 to 2023. If trustees disbursed another $133 million in 2024 but didn’t bring in new contributions, they would reduce the foundation’s size by almost 50%. This seems unlikely — unless trustees were intent on sunsetting the foundation.
Conversely, the Zell estate could channel more money into the foundation to fuel more robust and sustained grantmaking. This approach would fit a familiar pattern, as it has received $234 million in incoming contributions since 2019. When the foundation releases its Form 990 for 2024, we’ll know whether trustees embarked on more consistently robust giving in less than a year.
