By Editorial

It wasn’t very long ago that the David and Lucile Packard Foundation was ranked No.1 in the nation with assets exceeding $12 billion. The foundation was looking to expand its headquarters and increase its employee base. It was the year 2000, in fact, a time when everyone in Silicon Valley seemed to be driving a new car or buying a new house.

But the Packard Foundation’s assets have dropped dramatically, mirroring the decline in value of Hewlett-Packard stock as the stock market and the economy went south. So last week, Packard announced it is cutting its grant giving further for 2003 and reducing its work force.

However, don’t start playing taps for this revered foundation just yet. Packard still has an estimated $3.8 billion in assets. Although its grant giving has dropped more than 60 percent since the foundation doled out $451 million in 2001, it still plans to award grants worth $200 million for 2003.

“There’s still a lot of good things you can do with $200 million,” said one Packard spokesman.

You bet. Although the foundation has cut its arts and organizational effectiveness/philanthropy program areas, it will continue to operate a reduced arts fund that serves four local counties, including Santa Clara. This is at least a silver lining in a gray cloud that has all but doused support for the local arts in recent months.

Still, no matter how much one looks on the bright side, cutbacks are cutbacks. A good barometer of the economy’s future can be measured through the Packard Foundation’s current strategy and plans to cut staff from 160 down to between 80 and 110. While the economy tanked throughout last year and Packard limited its grant giving to $250 million, the foundation held on to its staff in the hope the economy would rebound, as many experts predicted it would.

The staffing cuts to take place by the end of this year reflect the belief that H-P and the rest of the business world are in for a long drought - perhaps two or three years.

This does not bode well for the many non-profits that depend on the Packard Foundation for a healthy chunk of their funding. Some are already going under, others hanging by a thread.

What is wonderful about Los Altos is that residents don’t sit back and wait for the handful of major philanthropists to carry the load. Los Altans are genuinely generous. Witness the recent Save Our Schools drive that netted more than $1 million in less than two months. Residents also stepped up for the arts, contributing $350,000 for high quality high school theaters. This year more than ever, we invite residents to dig deep and help, particularly over the holiday season.

We know that Packard’s work and community gift giving will endure through these trying times, but it gives the rest of us a chance to step up and fill the gap.