Story of Benson donor Robert Sonsteng by Reed Anfinson, Swift County Monitor News
If you would have driven by Robert C. Sonsteng’s rural southern Pope County home you would have seen an old white 1930’s farm house with a well used pickup in the yard. The farm buildings looked run down.
If you had seen him on the street, in the grocery store or at the Benson VFW playing pull-tabs, you wouldn’t have been impressed by the way he dressed.
But very quietly Sonsteng was a very wealthy man and he has left the community the largest charitable gift it has ever received.
At a Benson Kiwanis meeting in December, Attorney Don Wilcox told members that Sonsteng’s estate has been valued at between $9 million and $9.5 million. It is estimated that $5 million to $6 million of that value is in about 1,000 acres of farmland while close to $3.5 million is in cash assets.
Sonsteng, a bachelor farmer, had no family to inherit his estate. As he neared the end of his life, Sonsteng looked for direction from Wilcox on how he could best put the wealth his family had accumulated over two generations to good use.
Among the options Wilcox presented to Sonsteng was how the Benson Area Community Foundation (BACF) and the Galen Hanson Foundation worked to benefit the extended Benson area. Sonsteng liked what he saw in the two foundations.
Wilcox and Sonsteng developed an outline for the plan on how his estate would be settled, but it has taken more than a year to gather all the information about his holdings and finalize that plan. Sonsteng died Sept. 21, 2014.
At the Kiwanis meeting Wilcox presented the plan, which will have a significant impact on the community for years to come.
From Sonsteng’s cash assets $1 million cash is being given to the Benson Area Community Foundation (BACF), one of Southwest Initiative Foundation’s 24 affiliates. Another $2.5 million will be used to establish the Robert Sonsteng Foundation.
The farmland will continue to be farmed by brothers Scott, Steve and Mark Nelson who have been renting it for years. That was one of the stipulations that Sonsteng wanted in the agreement, Wilcox said. They will farm the land at a fair market rent with the revenue going into the Robert Sonsteng Foundation.
Through Sonsteng’s foundation and his endowment to the Benson Area Community Foundation, within a couple years the two could be awarding grants of between $200,000 and $250,000 annually.
Sonsteng told Wilcox that he had a particular interest in local churches, the Swift County-Benson Hospital, and the Benson Public Schools. But grant funds are not restricted to those three areas and can be used in other ways for the public good.
As does the BACF, the Robert Sonsteng Foundation will use the boundaries of the District 777 schools as the area from which to accept grant applications. The district includes all of central Swift County as well as parts of southern Pope County and northern Chippewa County.
A board of directors made up of Wilcox; Dr. Tony Hilleren, a neighbor of Sonsteng’s; Ben Wilcox, an attorney and partner with his father Don Wilcox; and the Nelson brothers will govern the Sonsteng Foundation.
The guidelines for how the grant funds will be awarded has yet to be developed, Wilcox said. Also, the Robert Sonsteng Foundation board at this point is looking at its options for investing its $2.5 million. It is not investing these funds with the Southwest Initiative Fund.
Unlike the $1 million endowment to the Benson Area Community Foundation, which will take 18 months before it can start making grants, the RSF will be able to do so much sooner. While its investment returns will take time to build, the cash rent on the farmland is paid in the spring and fall, meaning a considerable amount could be available within six months.
About Robert Sonsteng
Sonsteng was born in Glasgow, Montana, in 1933. In 1945, when he 12 years old, his parents moved to a farm in Langhei Township in southern Pope County. He went to school in Benson and in 1951 graduated from Benson High School.
Not long after graduating, he joined the U.S. Air Force. At the time, the United States was at war with North Korea, but Sonsteng did not get deployed to the war zone. He did serve on bases in San Francisco, New Jersey, Texas, New York, and Mexico.
Once out of the Air Force, Sonsteng devoted the rest of his life to the family farm where he, along with his father and brother Murien, raised crops, tended livestock, and had a dairy operation. When their father Carl died, Robert and Murien continued farming while living with their mother Clarice. After their mother’s death, the brothers continued living together, sharing the family home.
The Sonstengs owned three parcels of land in Swift County totaling 200 acres in Benson and Camp Lake townships. They owned another 711 acres in Langhei and Rolling Forks townships across the Swift County border in Pope County. A lot of the land is pasture and some is wetlands, reducing the number of tillable acres.
Murien died in June 2013 leaving Robert alone on the family farm. Not long after, however, Robert entered Meadow Lane’s Golden Living Center in Benson and died Sept. 20, 2014.
“You would have never known how much they had by looking at where they lived or the way they dressed,” Wilcox said.
The Sonstengs were very frugal throughout their lives, Wilcox said. Robert and Murien, like their parents, spent very little money on themselves. Through the years their assets continued to build helped by the steadily increasing value of their farmland, a period of very good commodity prices, and because they touched little of what they were putting away.
It took nearly a year to put together all the assets of Sonsteng, who had funds in over a dozen banking institutions, Wilcox said. When it was finally totaled up, his estate was valued at over $9.5 million.
Working with the Southwest Initiative Fund (SWIF)
“This is a transformational gift,” SWIF Director of Philanthropy Liz Cheney said in an interview of the $1 million endowment left by Sonsteng.
The Southwest Initiative Fund (SWIF) is one of six regional funds founded in Minnesota by The McKnight Foundation in the 1980s to “provide financial resources, creative leadership and hope for a brighter future.”
It facilitates the work of local community foundations relieving the burden of working IRS filings, federal and state regulatory compliance, and investment management. The funds donated to a local community foundation stay with that community for its particular needs.
SWIF will administer Sonsteng’s $1 million gift to the Benson Area Community Foundation. They will be co-mingled with SWIF’s $45 million in other endowed gifts, Cheney said. Sonsteng’s funds will be accounted for separately to ensure that it honors his intent and goals with his funds, but for investment purposes co-mingling the funds ensures a maximum return, she explained.
Bremer Trust in Marshall manages SWIF’s investment funds. Historically, SWIF has earned an average annual return of 8.21 after all fees are taken out. Because of the large amount that SWIF invests with Bremer, the investment fee is less than one-third of 1 percent annually.
If that were to be realized with Sonsteng’s $1 million, the fund would earn $82,100 a year. However, not all of those earnings are given out in grants. The spendable funds policy designates that 5 percent of the earnings, or $50,000 in the first year, would be available for grants – if the market cooperates, Cheney said. The other $32,100 would be added to the endowment.
By adding funds from earnings to the base endowment, it ensures the endowment grows over time and that adjusts its earnings to keep up with inflation.
SWIF anticipates that the first grant funds will be available to the community from the Sonsteng endowment in July 2017.
SWIF generally charges a 1 percent fee on the total fund to cover its costs of processing grant requests, produce financial statements, and for the staff time involved. But because of the size of the Sonsteng endowment, the management fee will be 0.8 percent, Cheney said.
SWIF’s funds are invested in a combination of stocks and bonds with a long-range view of earning the best return. That means it needs the stock market to perform, Cheney said. It adds some risk, but generates better returns.
“We, along with our affiliate partner the Benson Area Community Foundation, are truly honored to be a partner in Mr. Sonsteng’s legacy,” Cheney said. “His generosity is reflective of the spirit of so many people who call southwest Minnesota communities home. Behind this tremendous gift to the Benson area was a man whose story we are excited to learn and share – in hopes of inspiring others.”
The Benson Area Community Foundation has its own board, which oversees grant awards from undesignated donations and seeks additional contributions.
However, people can donate to the BACF and assign their donations to a distinct family fund. As a family fund, a separate board approves grants that are awarded. That is the way the Galen Hanson Foundation works and how the Robert Sonsteng donated funds will be operated.
SWIF does the due diligence required by the IRS to ensure the non-profits that are receiving the grant funds are in good standing, Cheney said.
Sonsteng’s $1 million gift brings the total BACF balance to $1.2 million. In the past five years, the BACF has awarded $33,695 in grants while the Galen Hanson Foundation has awarded $90,423. That is an average of nearly $12,000 a year.
Sonsteng’s gift is one of the largest gifts that a community fund within SWIF has received.