← Going Big! with Kevin Gentry
Going Big! with Kevin Gentry
Going Big in Business, Public Policy, and Philanthropy: The Art Pope Blueprint
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Art Pope
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Art Pope
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Art Pope
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Art Pope
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Art Pope
Well, again, my father grew up in the Great Depression, served in the U.S. army in World War II. He believed in giving back to the community. Now, I know some conservatives, even conservative philanthropists, don't like the term give back, because that sounds like we took something to begin with and we didn't deserve it. Therefore, we have to give it back. No, we earned the money. My father earned the money, which is bored of my mother, but it was earned with a team, with our associates, with our customers. So, yes, we want to give back to the communities where our employees live, where our customers are. That helped us earn that money. But more importantly, what my father meant, he literally meant give back to future generations so they would have the same opportunity to succeed that he had.
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Kevin Gentry
Welcome to the Going Big Podcast. I'm your host, Kevin Gentry, and this is the place where we celebrate bold moves and big ideas. Each week, I sit down with inspiring leaders, entrepreneurs, and change makers who are making a significant impact in their careers and in their communities. Whether you're looking to level up your leadership, pursue your passion, or just get inspired to take your next big leap, this is where those stories come to life. Now, if you're listening on iTunes, YouTube, or anywhere else you tune into podcasts, be sure to hit that subscribe button so you'll never miss an episode. Now let's dive in to what it means to truly go big. Well, ladies and gentlemen, welcome to the Going Big Podcast. Today, our guest is Art Pope, who has gone big in business, gone big in public policy, and gone big in philanthropy. So he's gone big in multiple ways, which makes this conversation especially interesting today. Art Pope is the chairman and CEO of Variety Wholesalers, which operates over 600 discount retail stores in 16 states. They have over 15,000 employees. And as you may know, what made big news earlier this year was their acquisition of big Lots, hundreds of those stores. And that makes this conversation interesting as well. But in addition to this business leadership, Art has served in public policy. He has been the state budget director in the state of North Carolina, served four terms in the state legislature there, today serves on the board of governors of the University of North Carolina system, and then in Addition in philanthropy, he leads the John William Pope foundation and serves on the board and has served as chairman of the Bradley foundation, which is one of the biggest national philanthropic organizations in the United States. So whether you're interested in just kind of how to go big as a change agent or go big in business or go big in philanthropy or what have you, I think you're going to find this interesting because of just the multiple hats that somehow Art is able to wear. But there's a lot more to this conversation, too. So, Art, it's a great pleasure to have you here today. Thanks for joining us. Really appreciate you being here.
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Art Pope
Well, Kevin, thank you for having me on this podcast and listening to all you say that. I do. Very generous discretion. I'm glad I have time. This is important. I appreciate it.
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Kevin Gentry
Well. Well, you do it amazing well. But you also have remarkable humility, and that's an inspiration as well. But to kick us off. Kick us off. Art, do you think somebody can still go big in the United States today? Given everything that we face in terms of debt and regulatory burden and just the circumstances of the world today, can somebody still go big?
- [04:07]
Art Pope
Absolutely. I think they can go big in their personal careers, whatever that choice may be and the quality of life and raising a family. I have major concerns about where America is today in the future. But we have survived tough times in the past, and I continue to be a believer in American dreams. So, yes, I do think we can still go big.
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Kevin Gentry
Awesome. Well, we're going to go into that a good bit more when we go into both the public policy and the philanthropy conversations. But let's start with business. And you're going big there. Help us if you could, if you're willing to tell us a little bit about the Big Lots acquisition, the expansion, what of thinking drove that?
- [04:47]
Art Pope
Well, retailing, I think, is the most competitive industry sector of the economy anywhere. There are so many retailers competing against each other, which means there are winners and there are losers. There are some who failed. So our company has had a good business model. It's been proven over time, and it keeps modifying, changing with the ties. Big Lots, for numerous reasons, fail. They went into bankruptcy last September. We have been watching Big Lots having discussions with them. The bankruptcy procedures can be complicated. When the opportunity came to acquire 200 stores and more importantly, the 5,000 jobs who went to those 200 stores, we thought we'd take the best of Big Lots, come out at the best of our Roses stores, and make it succeed in the future.
- [05:32]
Kevin Gentry
Well, okay, so you touched on the Retail sector. And while many retailers are struggling, you're doing something different. So what is it you saw there that others didn't see? For example, any secret sauce here or what's going on?
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Art Pope
Well, first of all, you just used the word that I saw. There's no I. I mean, I hate to be flipped. There's no I in team. We have a great team. More importantly, we are building over on almost 100 years worth of retail experience going back to my father John Pope, who founded the company. So the secret sauce really is not secret. I've discussed it beforehand. And retailing is very competitive. So we had to find a niche where we could succeed in competition with the big guys, primarily Walmart with their large stores, their supercenters on the one side, but then with a large company, but small store formats of the dollar stores like Family Dollar, Dollar General and Dollar Tree. So we have that niche in between where our stores are smaller and more convenient to get to from the neighborhood, from the community than a Walmart store. But we are bigger than a dollar store, so we can offer a full range of merchandise at prices that are competitive at Walmart or anyone else bringing great value to our customers. So we found a niche where we think we can excel and it's hard for others to duplicate.
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Kevin Gentry
Well, you, you referenced your father who founded Variety Wholesalers. Tell us a little bit more about the history, how it got started him and sort of where things are today.
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Art Pope
Well, my father's part of that greatest American generation. He literally grew up during the Great Depression. He lied about his age to join the Army Air Corps during World War II. After the war he went to the University of North Carolina, got a degree in commerce and then he proceeded to fail. He entered a couple of different businesses before he bought the five original five, ten dime stores. We wanted to first five and ten dime stores that were self service in small towns. This is back starting in 1949. The stores existed a little bit before that, bringing the concept of the big store Woolworths and the big cities down to small communities. He grew the company through opening new stores, acquiring other retail chains to grow to about 250 stores. In 1997. Some of the chains we acquired were in bankruptcy. In 1997 we acquired the Roses stores which had emerged from bankruptcy but financial financially distressed and that really more than double the size of our company. It was a larger store format where we can succeed and grow the company to where we acquired a big lot this past year.
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Kevin Gentry
Wow. And then he continued, I know he passed away a Few years ago. How did it continue into the next generation?
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Art Pope
We are a family business, but by the way, I want to add, we're a family business, but I did not inherit the business from my father. And with the theme of this being going big, absolutely. I give my father the credit for building the foundation of this company. He was a great entrepreneur, a great merchant, a great buyer, a great operator. So we would not be here except for what my father built. However, my father left his ownership in the company to my mother in trust and then to charity. So I didn't receive any ownership in the business from my father. It went to charity. And sometimes people question, well, how did you acquire your interest in the company? How can you be successful and give away so much money today? Well, if in the 1980s I had gone to work for Google or Microsoft or Apple and been one of the first employees, had stock ownership, held onto that and grew with the company, they wouldn't question it. Well, you can succeed by being the next generation in a family business. And so that's where I've been fortunate to do that. I do have adult children who are very successful in their careers. They're involved at the board level. And we'll see about the ownership for the next generation. Can talk more about that if you wish.
- [09:43]
Kevin Gentry
Well, let's go back again to the going big portion from your dad. So you're right, that greatest generation, also from the Depression. What kind of vision did he have? Did he have a vision for taking it big or did he just start by this opportunity he saw in, as you said, smaller marketplaces?
- [10:06]
Art Pope
Definitely he was taking advantage of the opportunity he saw in the smaller marketplace. But that kept evolving. Again, we start off literally as a five and dime store. Some of the younger generation may not remember what they were, but you would basically sell Items either for $0.05 or $0.10 and not more. Then gradually, gosh forbid, surprise, inflation went up to 5, 10 and 25 cent. Then we became a dollar store. During the 1980s, our business wasn't doing so well. So he has seen. My father had seen one price clothing stores on the West Coast. So he took that concept and brought in apparel at fixed price points. Nothing over $10. A kind of an update from a 5 and 10 dimensional. And that succeeded, sustained the company for another 10, 20 years, which allowed us then to be in position when Roses went. Stores went into bankruptcy and competition for Walmart. So we changed the Roses format again, brought part of our concept to it, and then had Roses succeed. So it's a constant evolving and changing, keeping up with the ties. So that's partly how you go big.
- [11:12]
Kevin Gentry
All right, well, I'm going to come back to that, but I now want to jump over to your engagement in the public policy process as a. As a. As a citizen. You served in the state legislature. You served as the state budget director, compensated, I think at a dollar a year. That was very generous of your contribution in multiple ways to the taxpayers of the state of North Carolina. But what, what sort of philosophy of life that you have, what kind of principles do you have that prompts you to want to lead in that way also?
- [11:49]
Art Pope
Well, part of that goes back to my father and my mother and our family. They believed and succeeded after the Great Depression, after the challenge of World War II, in building a family business and growing it. And they wanted the next generation to prosper. I mean, when I was a kid working in the warehouse and stores, I learned that firsthand by doing it from my parents. Then it's also a little bit goes back to my father. My father wanted me to go to University of North Carolina, get a business degree, an MBA degree, and go work for family business. However, I always enjoyed and had an interest in political science and political theory. So I got a political science degree. And then worse, I went down the road and got a law degree at Duke University. And my father's a big Carolina fan, so am I, too. So. So once I got my law degree again, I wanted to be able to support myself. I didn't know if I was going to go into the family business. So I practiced law for several years. But because my interest in politics and through personal connections, I went to work for Congressman Jim Martin in his 1984 campaign and then became his special counsel in the governor's office when I was still in my 20s in 1985, that gave myself my first opportunity to learn and practice. I do have strong beliefs on philosophy, on my principles that I want to see and how best I think America can prosper. But I also believe in practicing what you preach. So that's why I served in Governor Martin's administration. That's why I went on to serve myself as a candidate that elected the North Carolina General Assembly. Is wanting to practice what you preach to make America a better place.
- [13:28]
Kevin Gentry
Well, let's dig a little bit more deeply into that, because kudos to you. There are a lot of people who would like to do that, but. But don't. So first let me say that, see how you react to this. My experience mostly with entrepreneurs, business people, is that they're kind of just focused on creating value for society. I mean, that's what they're doing. That's their business. If they can sell something that people want and there's a win win situation, great. But they get interested in politics generally because something bad happens. I would kind of call it like a predatory behavior. That is, somebody uses the power of government to attack business in some way, maybe through regulation or whatever, to try to take some of that value and distribute it to somebody else. That's how some people. I was overwhelmingly, I've observed entrepreneurs, business people suddenly get more engaged and say, hey, something has to be done. Others also read and are exposed to some element of political philosophy that's actually more rare. But it happens. I get the sense that you sort of did both. Is that, is that fair? How did you come to your beliefs and principles?
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Art Pope
Oh, it's absolutely both. To give you one specific example, I was about 16 years old working in the warehouse picking merchandise to ship to our stores. And I came across this big wall of file boxes full of papers. So if I asked my dad, what is this for? He said, oh, that's from Richard Nixon's wage and price controls, which you had to deal with in the 19 1972, 73 period. And we were told we have to keep this for an indefinite period of time. So I don't know how long. And then I saw the actual paperwork from government intervention, wage and price controls, and really at the same time, again, because growing up in a family business, I appreciate it. Free enterprise, it actually works. So when I went to the University of North Carolina, Chapel Hill, I took an economics course. And by the way, I think I had great faculty at UNC Chapel Hill. But some of them were very liberal. They were coming out of the counterculture, out of the Vietnam War protests, which were civil rights movement, which are very needed. But I had one political science professor tell me, well, you know, when you buy goods at the grocery store, only about 5 cents on a dollar goes to the farmer. All the rest goes to the businesses, corporations. And he didn't mean that in a good way. And I went ahead and raised my hand and said, well, excuse me, I happen to be in retailing, though that's merchandising, not groceries. And it's the other. It's both. The farmer may only get 5 cents and manufacturer may only get 15 or 20 cents on the dollar, but the retailer only makes 5 cents on the dollar. And he takes the risk of losing money and going out of business, which we talked about by the way, there's a whole nother department down here called the economic department that can explain that in more detail. And it was a graduate student. He just laughed and engaged in the discussion. So having that real life experience very much aided me when I study political science and when I studied economics. And I can go on in more details. You wish. I mean, I went through what I call my iron Rand stage with I think a lot of classical liberals, libertarian conservatives did, but mainly relied on mainstream economics.
- [16:57]
Kevin Gentry
So. All right, I want to continue this, but before you touched on having work for Governor Jim Martin, I get the sense that he was an important influence on you. Would you tell us just a little bit about about him?
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Art Pope
He was a congressman, first of all, he was a professor. He was a chemistry professor at Davison College, which is in Mecklenburg county, which is dominated by Charlotte, North Carolina. And he went through his life experience and on some issues dealing with local government, ran for county commissioner, won. And this is back then, you gotta remember North Carolina was a predominantly overwhelmingly Democratic state, but he won as Republican. And then from county commissioner he ran for Congress and again a Democratic dominant state won and held office, including in 1972 elections and 74 elections when Republicans were pretty well wiped out because of the Richard Nixon Watergate. One of the reason I'm not a fan of Richard Nixon, besides wage and price controls. So he went on the Congress. And then in the 1980s, North Carolina was not supposed to elect a Republican governor. We had one Republican governor in over 100 years and Jim Martin became the second one. But I cannot say enough about Jim Martin. I had faith in politicians and he reminded me there's nothing wrong being a politician because without being a politician and running, winning elections, you're not going to be a public servant. He believed in doing both. So yes, he provided a standard of character and wisdom that I've tried to emulate. So yes, he was a very positive influence.
- [18:36]
Kevin Gentry
Awesome. Well, I want to actually come back to that as well. You know, I recently interviewed former House Speaker Newt Gingrich, of course, who ran for Congress several times in Georgia before he was elected in 1978. He lost in 74 and in 76. But it really was unheard of for Republicans to be successful back then. It's hard to imagine that today, but it was just a very, very different circumstance. Well, Art, now I'd like if to tell us a little bit more about your decision to be the state budget director in North Carolina. That was not too long ago. You were in the midst of leading your company as well, your business, why did you do that and what skills are necessary to jump from the business world to state government?
- [19:27]
Art Pope
Well, first I was fortunate. I also did have that public service experience. I was just in my 20s when I was governor Martin special counsel in 1985. But it gave me first hand experience and more importantly, the opportunity to observe how work is done in the executive branch, including the state budget office. Then I went on into the legislature. So I had eight years of legislative experience, including having served on both Appropriations committee and our finance committee. So I had to benefit that legislative experience. But definitely having real world experience and business, that was such a tremendous tool to be able to bring the state government have that reality check was often to an extent, government is insulated. So I was able to bring both those experience and be perfectly direct. This was a governor croak. We had not had a Republican administration since the Jim Martin administration in 1980s.
- [20:20]
Kevin Gentry
From Governor Pat McCrory just about what, 10 years ago? Eight or 10 years ago, yeah.
- [20:25]
Art Pope
So Governor Martin served from 1985 to 1992. Then Pat McCrory was elected governor during the 2012 election starting in 2013. So we had a gap from 1992 to 2013 without Republican administration. To be perfectly blunt, having been a young guy in the 80s working with the Martin administration, serving the legislature, I was one of the ones that had both government experience and business experience to bring to the new McCrory administration. There was a need there. The governor asked me to. And when you're asked to serve, you want to meet that call. And fortunately, and I really want to emphasize this, I had a great team at Variety of Wholesalers, our parent company's name, to run the Rosa stores. So the way I put it, I could go work at the state budget director during the day and go to sleep well at night knowing that the company was in good hands.
- [21:21]
Kevin Gentry
Nice. Well, okay. Do you think having served as the budget director, is it good for a budget director to come from both the business world and the political world these days? Yes.
- [21:34]
Art Pope
I mean, you can't. Especially in a privately held business, even a publicly held company where the CEO has a lot of authority delegated from the board. You're used to asking something to be done, you still have to lead. You just can't command. But if you ask for something, you're done, you expect it to be done. There's a different skill set in public service where again, I think most of the public employees I worked with in the budget office were absolutely great. But it's a different world when they're in protected positions that you're dealing not with just the employees, but with the cabinet secretaries and above my former colleagues over in the legislature. You have to build consensus, you have to persuade, you have to accept compromises. It's not just pure negotiation in a business sense, where you either make a deal that benefits you or you walk away from the table. You have no choice but to pass a state budget. So it is both more challenging and different type of challenges than just being in business. And that caused a lot of business people to get frustrated.
- [22:38]
Kevin Gentry
All right, well, speaking to that. So I think you hit on something really important and I think. I think this is another just very important thing to flesh out for those that are listening, that are thinking about their own personal futures. Art, you and I know there are a lot of people who serve in public office, elected office, who have not had that many real world experiences in the business world, what have you. They've just been in office a long time. And then there are some business people who don't want to touch politics or government because either they're so focused on their business or they just think it's just. It's just bad. But you've shown a path to doing both and that there's a benefit to bringing the experiences from both. Would you recommend to somebody who's listening that kind of path that you've taken?
- [23:31]
Art Pope
I absolutely would. And it's not just business people. A lot of people involved in philanthropy and supporting academic thought, public policy organizations, when it comes to actual politics, they do think it's grubby and dirty. I had a served on a board of a gentleman who I was again, probably about 30 years old and he was already in his 70s. And I just gotten elected to the General assembly for the first time at age 32. And I may have been a little bit fool of myself. I admit it. And he put a friendly grandfatherly arm over my shoulder and said, art, how can you do that? How can you serve in politics? How can you go into the belly of the beast? And I said, well, the state's not going to weather away for libertarians any more than it withers away for communists. Someone has to go in there and do it. And again, I may have been a little bit presumption full of myself at that young age, but the point is we are a democracy. We do finally implement changes in government through the democratic process, through legislation, through the administration of the legislation, executive branch, and yes, through the judicial system, which in North Carolina is elected. And often we resolve conflicts over legislation. So you can't just say, we're going to recruit a football team, we're going to train a football team. We're going to plan strategies in place. But by the way, we don't want to get on the line of scrimmage and push the ball over the goal line.
- [25:05]
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- [25:46]
Kevin Gentry
All right, well, now let's jump to this other hat that you've worn, and that's in philanthropy. First, if you could just share a little bit more about why your parents decided to pursue philanthropy through the value they had created, through the accumulation of some wealth and building that business and how you see that today and then why you've chosen to join, like, the board of directors of the Bradley Foundation. How do you view philanthropy? And then I'll get to how you balance it all. But let's talk more about your family background and your personal background and motivation in philanthropy.
- [26:24]
Art Pope
Yeah. Well, again, my father grew up in the Great Depression, served in the U.S. army in World War II. He believed in giving back to the community. Now, I know some conservatives, even conservative philanthropists, don't like the term give back, because that sounds like we took something to begin with and we didn't deserve it. Therefore, we have to give it back. No, we earned the money. My father earned the money with his board of my mother, but it was earned with a team, with our associates, with our customers. So, yes, we want to give back to the communities where our employees live, where our customers are that helped us earn that money. But more importantly, what my father meant, he literally meant give back to future generations so they would have the same opportunity and succeed that he had. You know, my father, I'm not going to say my father grew up in a log cabin. He grew up in rural North Carolina, my mother on the banks of the Cape Fear and on a farm. So. But. And when I was born, I came home not with silver spoon, but in a three Bedroom, one bath, rental house. Sharing a bedroom with my sister again, I was a baby. I'm sure she didn't appreciate that, being a little bit older while my father's getting the business off the ground. But that's what you do succeed. And then when you do succeed and you have the opportunity to give, to give back, my father thought you should. And I learned that from my father, and I believe in that sincerely.
- [27:49]
Kevin Gentry
So is the John William Pope foundation is that name for your, your father?
- [27:54]
Art Pope
Yes, it is.
- [27:56]
Kevin Gentry
Tell me about what, about that. And what's the vision for, from what he started with to what you're seeing in terms of into the future and the idea of giving back. What are, what are some of the priorities, the mission? What's your vision for forgiving in that way?
- [28:14]
Art Pope
Well, when I first joined the family business was in 1986. I've been again in a law firm practice and worked for Governor Martin's, his legal counsel. So when I joined the family business, though, one of the first things my father did so go start the John William Polk Foundation. My father, my family had already been very generous in their charitable giving, but he wanted to have it more directed and organized, and he also wanted it to be for multiple generations, my generation and the next generation. So that's why we started the Polk foundation, to channel it, to give a mission to that giving and also have it as a bridge to the next generation.
- [28:53]
Kevin Gentry
Gotcha. And what is its purpose? When you talk about give a little bit more about the sort of giving back, does it have a particular mission statement or vision?
- [29:03]
Art Pope
We do. Again, the mission overall is to help to take one step by step about philanthropy in general. So philanthropy is generally considered improving the welfare of mankind, making life better. And I was once dealing with a banker who not only wanted to manage our investments, more of the devices on our giving. And we talked about what the Polk foundation does. A good part of our giving we can call traditional philanthropy. It's giving to make sure that food banks, homeless shelters, education, K12 education, higher education, but also public policy. Because if you want to improve the welfare of mankind, you want to do it for the long term. One of the oldest sayings about philanthropy is give a man a fish, you feed him for a day. Chinese proverb. Well, if all you do is teach a man to fish, so he succeeds, then that's it. What you need to do, and there's lots of variations of this story, is help the man take the fish to a marketplace. Then the marketplace, sell the fish, earn cash, buy a bigger Net, buy a bigger boat, buy a house for his family, pay for his children's education. So if they want to be, they can be better fishermen or engineers or business people, retailers. But all that presumes, going back to the first proverb, that the man has the right to fish, that he owns the fish that he catches, that there is a marketplace where he can go take his fish to sell that. In that marketplace, they're enforceable contracts. Courts enforce the contracts necessary so he gets paid and the cash is worth something. So you can't just assume there's going to be a market economy, freedom that allows that person to succeed. And that's why you should also give, not just teach a man, give a man a fish, teach the man a fish, but make sure that there's a society where you can be free and prosper. That's what my father wanted to help preserve and give back to future generations. And that is our motivation for our mission, for our giving.
- [31:10]
Kevin Gentry
Well, I gotta say, Art, I've rarely heard it articulated that effectively and that well. And I hope that's helpful for a lot of people who are listening, who are giving in whatever way and how they think about it and the philosophy of it and the purpose of it and the objective as well. That's awesome. Thank you. So you're involved in philanthropy beyond your family's foundation. You've served on the Philanthropy Roundtables board. I believe you've been involved in a lot of different causes. And you've not only served on the board of directors, have you been the chairman of the Bradley foundation, which is a huge foundation based in Milwaukee, Wisconsin? Why do you do that?
- [31:49]
Art Pope
Well, I keep reusing this phrase was practice what you preach. So I practiced not only by being in public service. I actually went back when I was with Governor Martin in 1985. We really did not have any conservative public policy proposals at the state level. So that gave me the thoughts, well, there's a gap, there's a need there. So we started a state level public policy group, the John Locke Foundation. And yes, because of the family support, we were able to help give the seed money to finance it. So I went from serving in public office to founding a public policy organization. Then from the public policy organization, we needed grassroots. So we worked with state level grassroots groups. And then I got involved with national grassroots groups, which included Citizen for Sound Economy, became Americans for Prosperity. So I think I was fortunate to have experience both in starting and running public policy groups and serving in legislature. So when asked and opportunities arose to serve national organizations like Philanthropy Roundtable and the Bradley Foundation. Yes, I was more than happy to bring my experience to them, but more importantly also learn from them to help improve what we do in North Carolina.
- [33:01]
Kevin Gentry
Well, hats off to you. I really hope that folks take heed of this. A lot of stuff that you're sharing, I know you're not doing in a prescriptive way, but you've just been, in my judgment, you've done it very well. So I want to actually take this back to variety wholesalers a bit as also. So I think a lot of people struggle with the concept of discount retail and its role in the marketplace. You, you said niche, but you are providing value to a segment of society that otherwise probably could not have access or be able to afford certain kinds of goods and that you're serving. So my standpoint, you don't need to give back because you're serving a community very effectively in a win win situation in that way. Yet you also understand the interplay with our free enterprise system and the role of government, the role of business, the role of individual. So you're working to protect and preserve that so that others can enjoy those benefits for generations to come. I don't want to put words in your mouth, but is that a kind of a description of how you see things or if you would just elaborate on how you think it all comes together?
- [34:16]
Art Pope
Very broad sense. Again, as I said, all retailers compete against each other. It's the most competitive sector of the economy and we have a niche within discount retailing. And I could talk at length. You can have a whole MBA course on discount retailing versus closeouts, what we call the treasure hunt versus everyday low prices. So it is very competitive. But yes, the people are best served when they're free to choose and what they can afford to buy and give them quality. So there's a lot of excesses in the marketplace. So the big department stores will buy goods that they don't sell them all, so they'll resell them. There will be overcapacity in the manufacturers for a microwave oven, a TV set that doesn't get sold to the big department stores. They have excess capacity so they want to sell that and find a channel to sell it at. So we're positioned between those manufacturers and our customers so we can get great deals, same quality of products, but at a lower price and then our customers can afford to buy it for us. We going back to my college professors or the Marxists, they say, well, there's excess capacity and waste in the free enterprise system. We need government to decide how to allocate that. We still hear that today with a certain candidate, socialist candidate in New York City. They want to have government grocery stores that do better. So it again, it is literally practicing what you preach and live and breathe. So we do bring bags to our customers. If we can buy something our customers won't can afford, there's no reason to buy it. And usually it's government that is a hindrance. You haven't asked me about it. I won't go off on a tangent. But trying to buy for our customers during tariffs being oh, that's my next question.
- [36:10]
Kevin Gentry
I definitely want to ask that question next and to dig more deeply, but thank you for that. And anybody that deals with government, Department of Motor Vehicles, the post office, the Social Security Administration, whatever it is, knows that government cannot efficiently act because it's the whole argument of the tyranny of experts. They just, they don't know. They don't have that knowledge. But the marketplace does have that knowledge in a very, very different manner, as you, as you well know. Okay, so I was about to say, I'm guessing you're no fan of tariffs because of what that harm that brings to your customers. And as you may know on this podcast I've had former Senator Phil Graham, Professor Don Boudreau, Veronika Ruggie, both from the Mercato center at George Mason University, talking about and trying to explain what is very a very difficult concept for a lot of people to understand how tariffs are taxes and ultimately the end users are paying the taxes. Again, you know this far better. Tell us about your sense of what's happening with tariffs and your concerns.
- [37:19]
Art Pope
Tariffs are taxes on the imported goods Americans choose to buy. Literally when I import goods directly from abroad, I write a check to the US government. It's not paid by the foreign governments, it's not paid by the foreign exporter. It's paid for by the American business that imports it. Now some very quick basic math and how much a retailer make varies depending upon what type of retailer you are. A high value drawer versus a lower value grocery store. What's called live Churn. They turn over to inventory a lot. So for a discount retailer and that you can use Walmart's public numbers. But we make about.
- [38:01]
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Art Pope
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Art Pope
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Art Pope
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- [38:32]
Art Pope
Day one. Third of a retail dollar in what's called gross profit. So you're selling an item for $10. The item costs 650 and you charge $10 for it and you make 350. That's not profit. That 350 then goes to pay for what's called SGA, your overhead, which includes your rents, your utilities, and most importantly, the goods. That's the salaries and wages of our employees, our associates. So if a retailer makes 50 cents, 5% out of that $10.50, he's doing well. And if he makes more, that's great. And often they make less. And often they go into bankruptcy like big lots did. But only 5%. 50 cents on a $10 item goes to the retailer. Now you have a 650 cost and you have a 30% tariff placed on that. Good. Or 30% on 650 going to put you at about $9. And then you have the $3 in overheads, salaries, rent, utilities. All of a sudden, on that $10 sales, rather than making 50 cents, you lose $2, $2.50. That means you're going to go into bankruptcy. So we have no choice but to pass on that price increase to our customers. Now we do everything we can to negotiate lower prices with suppliers. One reason our company is here is not just our niche in our, of our stores, but we keep a low overhead as we can in order to save that value, pass on that savings to our customers. There's only so much you can do. So you will see a retail price increase over time. We're waiting to let other people go first. We're going to keep our prices as low as we can, as long as we can. But you're also going to see shortages. We have missed the window for goods we will import for Christmas, so our shelves will not be as full at Christmas time for Christmas tree and Christmas tree lights as we would like and our customer would like. So there's going to be shortages as well.
- [40:34]
Kevin Gentry
Well, I, I share your profound concern and I, I hope we get out of this because again, I, it just seems like the, the people who are least able to pay these taxes are the ones who will have a, the biggest burden from a, from a percentage standpoint. Anyway. We could go on about that. All right, so I want to go back to A little bit different thing. So, so you've worn this, these hats. You wear these hats in business, in public policy and philanthropy. And you're very nice as you. I'm. I knew you would to give credit to the team that, that enables all of these things to happen. But how do you wear all those hats and how do you manage various opportunities as well as priorities and challenges? We're all listening for somebody to give us advice because we're all trying to figure out how to do one of these well. And it seems like you do three of these pretty well.
- [41:26]
Art Pope
Well, the key component is having a great team, having a people that you can trust and delegate to. That applies equally to Polk Foundation. Philanthropy applies equally to my company. But you cannot just delegate and forget. You need to hold. Trust their judgment, but challenge them. Hold them accountable and hold them accountable for results. Let them know you're looking over their shoulder. So that is really the key right there. Then it's developing partnerships again. When a philanthropist writes it's easy to give away money. You can write a check and get someone to pat you on the back, invite you to an awards dinner, and all you've done is written a check. For philanthropy to succeed again, whether it's traditional humanitarian philanthropy like a food bank or public policy organizations, you need partners on the ground who know what to do with that money, how to deliver the services, how to conduct the research, how to do the public policy proposals. So it's old fashioned division of labor. We have to identify who we think will bring the greatest return on the investment, which means betterment of mankind. And that's often very hard to do. But it's, we have, we have to do that. We can't do it all ourselves. Shouldn't try to do it all ourselves.
- [42:42]
Kevin Gentry
Well, how do you balance all the competing priorities? Any advice?
- [42:46]
Art Pope
According to my wife, I don't balance it very well. My children would say that as well. So no, you always worry about dropping the ball. But one, it helps it that I enjoy it. I enjoy retailing, I enjoyed it when I was practicing law. I enjoyed my public service. I enjoyed the philanthropy. Again. Going back to your theme of going big, if you want to go big, do something you really believe in and that you enjoy doing and hopefully you're fairly good at it.
- [43:17]
Kevin Gentry
Terrific. Well, yeah, I want to lean into going big before we wrap this up, but a few other questions until we get to that point. Point. With respect to your business, you, you mentioned it's a, it's a family owned company for people who are Listening. What, what are the advantages of a family owned or privately owned company versus a a publicly owned company that you see? Do you ever see the need to go public? How do you, how do you see that?
- [43:45]
Art Pope
This is an old issue. My father had was approached about taking our company public back in the 1960s when we were still fairly small. Some of our competitors, and my father's very friendly physical competitors, as I tried to be, one of them was a little company out of Charlotte called Family Dollar. Family Dollar did go public in 1960s and became a tremendously large and successful company. And the family that owned it retained most a good part of their interest and were very successful. My father did not want to have partners, much less be publicly traded. He wanted to have the freedom and flexibility of being a privately held company where we took risk. Rather than going public. We borrowed money from the bank and usually paid the bank back early on time. But that gave us the flexibility to invest for the long term, take risks knowing we were going to incur short term costs or even losses, but have a better return in the long term versus publicly traded companies that too often are focused on the quarterly results they have to report to the investment advisors and be held accountable in the stock market. So being privately held gives you far more flexibility and I think it absolutely key to look to the long term. But I will say this. Their dispatch is being properly traded company versus the vantage. Being privately owned, but needs to be privately owned and managed, be a private company of absentee owners. Management where the owner is not involved in the management or just a person of management has none of that oversight. Hold them accountable. That can be recipe for disaster as well.
- [45:24]
Kevin Gentry
All right, this is, this is really fascinating. Okay, now another question on philanthropy before we wrap up. So in business you can measure progress, you can measure results, you have price signals, you have profit and loss signals. In philanthropy, it's a very different thing. How, how do you measure progress? Because you've already said that you have bigger. You, you go big with your finance because you have bigger objectives, you're looking for things to happen. How do you have the patience and, and how do you have the ability to determine that progress is being made?
- [46:05]
Art Pope
Well, I primarily get engaged in philanthropy and I also got engaged in politics and public service because I believed in doing it as its own end based on principle, not because I expected immediate results. I went into politics in 1984, 1985. Go to Martin, as I described. Served in legislature in the 1990s and 2000s. It was 25 years later before Republicans first won a conservative limited government majority in the legislature. I still think I hopefully contribute to making what we say called making bad bills better, slowing down negative consequences and building foundation to win that. But you could ask me 1985, we would not have another Republican governor after Jim Martin until 2012 and a Republican in 2010. Well, that may be the case, but it's still worth fighting the good fight. And again, I enjoy doing that, engaging in that, but you have to invest in long term in order to have the, quote, overnight success. There was a fair amount of publicity, a lot of negative publicity when Republicans won the majority in 2010. And I think I was given way too much credit or blame, depending on your perspective, for the Republican majority in the 2010 North Carolina elections. However, the Democrats outspent Republicans and the Republican running and districts gerrymandered, drawn by the Democrats, but they still won 57% of the vote. It took decades, not just by absolutely not by me, but by many people to build the foundation for that victory. But more Importantly, unlike in 1985 when Governor Martin was elected and started serving, we had a foundation of both public policy within North Carolina through John Locke foundation, other groups and state level think tanks and policy groups nationwide through other states to learn from. So that majority hit the new limited government, majority hit the ground running. So we finally got some actual results then. But you had to do it over decades, not just one year.
- [48:18]
Kevin Gentry
Well, interestingly, I guess particularly in a private or family owned business, you have the long view. And in public policy, you've got to have the long view as well.
- [48:27]
Art Pope
Absolutely.
- [48:28]
Kevin Gentry
And philanthropy as well. So good for you, you have the long view. All right, here are the wrap up questions. First, considering a younger version of yourself, and you were already so active at a younger version of yourself. You mentioned in your 30s serving in state government, serving in the legislature. But now, knowing what you know, what would you tell a younger version of yourself to do differently? Because that always helps our listeners sort of think about what you've shared and how they might shift up their own personal perspective.
- [49:02]
Art Pope
This may sound trite and very basic and I was partly joked about, it's also very serious. When you're committed to your career, to your ability, business, to politics, don't neglect your family life. I wish I had learned that lesson better. I'm very glad to say I have successful adult children. Everything else, but it can put a lot of stress and strain on the household, on the family. So don't neglect your family. So I try to balance it all like I Said, I'm not sure I succeeded in bouncing at all. And then what I said earlier, if you're going to spend the time doing it, then find something you love, something you're good at. You may absolutely love opera singer and be a terrible singer, so that may not be the career for you. So find something you both love and that you're good at and can support yourself and your family. Also, this may sound trite. I don't play golf. If you enjoy what you're doing, it's not really worth.
- [50:02]
Kevin Gentry
Nice. Well, you know, by the way, I talked to Todd Rose about this. It's, it's a challenge because generally we're at the growth stages in our life when we are young and our families are young, and that's when those competing demands are especially intense. Well, thank you for, for sharing that. You mentioned your dad. You mentioned Jim Martin. What about mentors? What would you advise to those listening about the role of mentors? How have they been employed, important in your life? How have different people been important in your life?
- [50:37]
Art Pope
Very important. Of course, I'm very fortunate that my biggest mentor was my father, John Pope. It can be very challenging working for your dad. I will say that, and I'm smiling about it. But my dad always encouraged me to do what I wanted to do, even when I went to Duke Law School in South Carolina business school. But he also wanted my help and taught me so much that I could succeed him. So starting off, I was very fortunate to have a great mentor and my father and I do not want to leave my mother, Joy Pope, out of that either in politics. Again, spoke earlier about example, named Jim Martin, Governor Martin. But interestingly enough, when I was 16 years old, I volunteered as a driver in a congressional campaign for a gentleman who was in his 30s at the time named Jack Halt, who later went on to become the campaign manager for Jim Martin. And that's really through Jack that I learned a lot about politics working on the campaign and met Jim Martin. So who knew when I was 16 years old that relationship would develop into both a good mentor and then lead me into public service myself. So you never know how young you are when you find a mentor.
- [51:51]
Kevin Gentry
Would you recommend seeking out mentors?
- [51:54]
Art Pope
I both recommend seeking out mentors. But more importantly, as I reached my middle age and beyond middle age now, I constantly try to look out what young people can I help Again, not only can can you give back, but can you pay back or pay forward by helping mentoring young people? And a lot of what the Lock Polk foundation supports the Bradley foundation support. I know the Charles Koch foundation does this is provide organized programs for leadership fellows, young fellows in the area of public policy, politics and business. So I very much try to help with that in a structured manner. But one on one trying to help other young people as I was helped when I was young.
- [52:39]
Kevin Gentry
Well, thank you. You do a good job at that. By the way. In my estimation, Art, you are still a young man in my judgment. You've, you're doing so much and you've done so much. Where do you see yourself in a decade in terms of what you'd like to see accomplish further with respect to business, public policy and philanthropy?
- [53:00]
Art Pope
Well, you touched on this earlier. My father again repeating it because it's so important. Grew up in the Great depression, World War II. That's the greatest generation. When I was coming of age it was the late 1960s and 1970s and then we saw the turmoil of the anti war, Vietnam War, the Vietnam War itself, the civil rights movement which were absolutely necessary and proper. But they're also accompanied literally by riots, by bombings. It was a very destructive time at that point in time. This generation, well, not only remember it, but it was real history for me. We were worried whether or not the Soviet Union, the communists and the Soviet Union and China would triumph in a contest of will with the Walter world, the free world. And at home we had the new left, the Marxists who wanted to transform the US into a Soviet Union, literally. So I actually thought that was the most contested time. As bad as things were, I would always tell my kids, no, it's not as bad as it was in the 60s and 70s, but we survived that. And I think the country came out stronger, especially with the civil rights movement success. But this past five years and going back to the riots we had in 2020 and of course the extraordinary 100 year event of the COVID We're in a greater challenge right now. I think we're seeing a greater challenge. We do have a rise on the left of expressly socialists. They're democratic socialists, thank goodness, not Soviet socialists, but there are still socialists. Progressive left I think has very authoritarian tendencies who do not respect the rights of the individual, that families should have the right to provide for themselves, want government to determine what the common good is and tell the people that. But at the same time on the right we have the rise to self identified nationalists and populists who believe that yes, government should act in the common good. And they're the ones who gonna tell you what that common good is. I don't care whether it's a right wing nationalist, populist or left wing socialist progressive. I want to be able to make that choice for myself and my family and everyone else to be doing that as well. So I think we have come to another crisis probably equal to what we had in the late 60s, early 70s. And I would like to say 10 years from now that America is still a free society where everyone has an opportunity to succeed. I believe very much in the principles of our Declaration of Independence that we were celebrating 250th anniversary. I absolutely also agree with Martin Luther King who talks about the Declaration of Independence being promises not kept, a promissory note that's due. And I want to continue to make sure that those benefits are available to everyone and we don't see our freedom that we won so that were so hard fought for during the American Revolution. The United States Civil War, the Civil Rights movement are not lost. So I want to see us be free and prosperous 10 years from now.
- [55:58]
Kevin Gentry
Hear, hear. Well, Arpo, thank you very much for your principled leadership. And it's unusual what you are doing and have done and really applaud that. So last question, and you've touched on a lot of this already. But to those listening wherever they may be, not just the United States, all over the world, but really with respect to the opportunities that are here before us in this day, what would you recommend to folks about how they should think about going big in their lives?
- [56:29]
Art Pope
Don't be afraid to take the risk. Go for it again. Buy something you love. Work at it. Don't forget the main reason there is provide for your family. But no, just have the courage to go for it. I mean, there's an old phrase that I think the middle generation, generation zero said fake it till you make it. That's the worst thing you can do. Find something you really believe in. Be true to yourself and pursue that. And if you make yourself find successful doing that, you're also going to benefit your family, your neighbors and everyone you do business with, everyone you engage with, the community you live in.
- [57:07]
Kevin Gentry
Our Pope, it's always a pleasure to be with you. Thank you for doing this. Thank you for the continued inspiration. Thank you for your being such a role model for others.
- [57:15]
Art Pope
Well, thank you.
- [57:16]
Kevin Gentry
Thanks for tuning in to the Going Big podcast. I hope today's conversation left you feeling energized and ready to tackle your biggest goals. Don't forget to subscribe and leave us a review on iTunes, YouTube or wherever you listen to podcasts. It really helps spread the word and it gets these inspiring stories out to more people. You can also find more content, resources and updates at our website, goingbigpodcast.com Remember, the only limits are are the ones you don't challenge the limits that you impose on yourself. Keep pushing, keep growing, and above all, keep going big. See you next time on the Going Big podcast.