What do you do if you don’t like your bank?
For most people, you put up with it or switch to another. If you were Elizabeth Noyce, you started your own bank. That was how Maine Bank & Trust was formed, in 1990.
Noyce, the ex-wife of Intel co-founder Robert Noyce, moved to Maine, where they had summered, after they divorced bringing her considerable fortune with her. She made numerous donations around the state, supporting charities, local fire departments, art museums and other groups.
In 1989, she founded the Libra Foundation, working with her lawyer and friend, Owen Wells. When she complained about her bank, he said, “Why don’t you think about starting your own bank,” Wells recalled.
That move was formative for Noyce, and for her legacy with Libra. It opened her eyes to what’s been termed “economic philanthropy,” using the vast (by Maine standards) wealth of the foundation to support businesses and entire sectors until the private sector or communities can take over.
Soon after opening the bank, Noyce visited one of the 14 branches and a teller thanked her for the job. That stuck with Noyce, said Wells.
“She wanted to buy more businesses — we looked at shoe companies, engineering firms, any number of businesses,” Wells said. We came up with J.J. Nissen, a 100-year-old Portland company, the largest bakery in New England. It baked 750,000 loaves of bread a week, but hadn’t kept up with the times and was in need of capital.”
Libra bought the business, built a new plant in Biddeford and eventually sold the bakery. It was a model of investment, stabilization, divesting and re-investment in other areas that continues today. Libra bought the bakery for $15 million, and sold it for $22 million. Likewise, the bank was started with about $17 million, and sold for almost $50 million.
Noyce died in 1996, leaving roughly $225 million to Libra. At the time, it was the largest transfer in the history of Maine by an individual to a foundation.
“She set the stage before her death for economic philanthropy,” said Wells. “We’re continuing the direction she established for us.”
Through the 1990s, into the early 2000s, Libra was a major landlord in downtown Portland. From key properties on Congress Street to the Canal Plaza buildings, Libra worked to keep them occupied with businesses such as L.L. Bean, keeping life in the town. It built and ran the farmer’s market, later selling the property amidst some criticism.
But these investments — in property, business and programs — aren’t the end game for Libra. Rather, each is part of a circle, as explained by Wells.
“We owned all of these buildings around here — the public market, the parking garage, Canal Plaza, all the big buildings on Congress Street. We then exited that, when we thought we had done all that we could, and the time was right, we sold at top dollar, and put the money back into the endowment,” said Wells. “That’s how some of that money has gotten re-invested in potatoes, and meat.”
The Canal Plaza buildings sold in 2006 for $55 million, followed by other downtown buildings for millions more.
“At some point, when these entities, these businesses, are able to stand on their own, it’s time to turn it over to the private sector,” said Jere Michelson, senior vice president and chief financial officer at Libra. “We ought not be involved in the long run in any of these, we need to get it on stable ground, turn it over to the private sector, realize an investment if we can — not just financial but social — then we turn around and we take that capital and we look for another need in the community.”
That cycle is true of other nonbusiness programs it funds. For example, Libra recently ended a summer camp program that provided $1,000 for fourth-, fifth-, and sixth-graders in Portland, Lewiston and Bangor to attend summer camps. Libra ran the program for about 13 years in Lewiston, a dozen in Bangor and 10 in Portland, and was funding it at about $3.5 million a year.
Libra said it would run the program for about 10 years before looking to put money elsewhere, said Wells.
“It’s time to reallocate the funds and help another group,” said Michelson.
Anytime the foundation ends funding, either by leaving a program, selling a business or real estate, there’s mixed feelings in a community, said Michelson.
“You always have a demographic that is going to be unhappy, no question. But by the same token you always have individuals that understand what’s happening,” said Michelson. “It’s a mixed group.”
Libra currently owns ski mountains in Mars Hill and Rumford, and has made significant investments in both those operations, Wells noted. Libra’s getting to the point where it will divest those assets, and is talking with the towns about the possibility the communities will acquire them.
“We’re moving away from that model, and we’re going in another direction,” he said.
Libra has given a total of $154.5 million in grants from 1989 to 2011, according to the foundation.
“If you go and sit in the Bangor Symphony, or the Discovery Museum in Bangor, or a number of other organizations all over Maine, you’ll find the Libra Foundation makes contributions to those things,” said Wells.
Michelson noted that Libra is a very flat organization, with the ability to react quickly when an investment presents itself. And while the foundation works to make strategic investments that benefit communities, industries and other areas, a big driving factor in where Libra puts its money is whether there’s a chance to compete successfully there.
“We don’t sit around and write policy papers on what the next direction’s going to be,” said Wells.