Milton Hershey: Chocolate, a Town and a School

The story

Milton Hershey was born in 1857 in central Pennsylvania. He was fired from his first job as a teenager, and by age 25 his first candy businesses had failed. He kept going. His Lancaster Caramel Company became a big success, and in 1893, at the World's Fair in Chicago, he bought German chocolate-making machines. In 1900 he sold the caramel business for $1 million and bet everything on milk chocolate.

In 1903 Hershey broke ground on a chocolate factory near the village of Derry Church. Instead of just building a factory, he built a town around it. He oversaw the building of comfortable homes for workers, good public schools, public transportation, parks, and in 1907 the park that later became Hersheypark. The town took the name Hershey. The factory was profitable almost from the start, and its earnings kept growing.

Milton and his wife, Catherine, were never able to have children. In 1909 they signed a deed of trust creating the Hershey Industrial School, a home and school for orphaned boys who would learn a trade. Hershey later explained, "I have no heirs," so he decided the orphan boys of the country would be his heirs. Then, in November 1918, he quietly placed all of his shares in the Hershey Chocolate Company into a trust for the school. The shares were worth roughly $60 million at the time. The public did not learn about the gift until 1923.

During the Great Depression of the 1930s, when millions of Americans were out of work, Hershey started a building program in his town. More than 600 men were hired to build a hotel, a community building, a sports arena, a theater and a high school. In 1935 he also set up the M. S. Hershey Foundation to support education and culture in the town. He died in 1945. Years later, in 1963, $50 million from the school trust was used to help create the Milton S. Hershey Medical Center.

The school, now called Milton Hershey School, grew far beyond its beginnings. Today it serves more than 2,100 students from pre-kindergarten through 12th grade, girls and boys from families with limited means, and it covers all their costs, including housing, meals, clothing and health care. The trust that funds it is worth many billions of dollars.

Because the trust holds controlling voting power over The Hershey Company, Milton Hershey's gift still shapes the company. In 2002 the trust's board explored selling its controlling stake, and the chewing-gum maker Wrigley reportedly offered about $12.5 billion. Townspeople and employees protested, fearing job losses. Pennsylvania's attorney general went to court and won an order blocking the sale while its effects were studied, and the board called off the sale. In 2016 Hershey also turned down a roughly $23 billion offer from snack company Mondelez.

Tying a charity's fortune so closely to one company brings both strengths and risks. But Hershey's choice remains a remarkable example of a business owner deciding that his company's purpose was bigger than making him rich. His factory, his town and his school are still connected more than a hundred years later.