- Published on Wednesday, 08 January 2014 00:01
- Written by Bruce Barton - Staff Writeremail@example.com
Just like William Hewlett and David Packard’s humble beginnings in a Palo Alto garage, the David and Lucile Packard Foundation began with two people at a kitchen table.
For years, beginning in 1964, foundation activities were kept simple. The Hewlett-Packard Co. co-founder and his philanthropic wife, longtime Los Altos Hills residents, met at the end of each year and decided where to donate money. Lucile was interested in children’s health, and David enjoyed science.
Nearly 50 years later, the primary focus on these interests remains unchanged at the Los Altos-based David and Lucile Packard Foundation. The major differences are funding amounts and breadth of impact. The Packards’ first-year foundation contributions totaled $17,000. In 2013, the foundation disbursed more than $253 million. The foundation’s current assets stand at $6.4 billion.
Years after their deaths – Lucile died in 1987, David in 1996 – the Packards’ interests are being championed in far more impactful ways than they could have envisioned 50 years ago. The investment in children’s and reproductive health related to stabilizing international population growth stems from Lucile’s wishes. Scientific research – David’s passion – is reflected in foundation work to protect the oceans and reduce the planet’s carbon emissions.
With the Packard Foundation poised to mark its 50th anniversary, the Town Crier has named the foundation its 2013 Los Altan of the Year. It is the first time the paper has bestowed the honor on an organization rather than an individual or couple. Modeled after Time magazine’s Person of the Year, the annual designation salutes a recipient whose positive impact and goodwill-building endeavors enhance the reputation of Los Altos as a community.
The foundation has addressed its causes by funding like-minded nonprofit agencies that work directly on the issues. The support not only involves grants for the organizations’ work, but it also entails providing funds to train staff so that they can become more effective at what they do.
Overseen by president and CEO Carol Larson, her staff and a board of trustees that includes Packard family members, the foundation’s work is subtle yet effective in changing the world for the better. Covering all corners of the globe while keeping in mind the needs of the local community, the David and Lucile Packard Foundation deploys its considerable resources to achieve maximum positive impact while continuing to honor the Packards’ philanthropic interests.
The foundation awards approximately 700 grants annually. Forty percent of the grants benefit people and organizations in the United States, and 60 percent support interests overseas. From China to India, South America and Antarctica, the foundation collaborates with experts on land and sea.
The challenges assumed by the relatively small contingent of 121 foundation employees are epic in scale: pioneer new approaches to conservation of coastal ecosystems; reverse the decline of marine bird populations; mitigate climate change; improve environmental performance of agriculture and biofuels production; protect wilderness in the western United States; overhaul approaches to management of the world’s fisheries; work on population and reproductive health in parts of Africa and Asia; and help children living in poverty.
“We tend to take on the biggest, riskiest issues out there,” said Los Altos resident Ned Barnholt, former CEO of Agilent Technologies and foundation board trustee since 2005.
“It’s hard to imagine a better job,” said Larson, CEO since 2004 and celebrating her 25th year as a foundation employee in 2014.
Larson, now in her 10th year as CEO, succeeded Richard Schlosberg, former publisher of the Los Angeles Times, who served as president and CEO from May 1999 to the end of 2003.
Looking back on 50 years, the foundation’s growth and transformation are remarkable. The Packards’ first donations in 1964 centered on local grassroots organizations: Christ Episcopal Church of Los Altos, the Children’s Health Council of the Midpeninsula and the Palo Alto YMCA. By 1966, the Packards were donating $75,000 per year.
Over the years, their four children – Susan Packard Orr, David Woodley Packard, Julie Packard and Nancy Packard Burnett – and grandchildren joined the foundation board. David Woodley Packard left the foundation in 1999 to run his own philanthropic organization, the Packard Humanities Institute.
By 1970, the foundation had settled on broad areas of concentration in which to cluster its grants: conservation and ecology; cultural education; health; and youth and minorities.
Today’s priorities include science and conservation; population and reproductive health; children, families and communities; and local grantmaking.
By the time Cole Wilbur took the reins as the foundation’s first CEO in 1976, foundation assets totaled approximately $7 million. When he stepped down 23 years later, foundation assets stood at an estimated $10 billion.
Wilbur, whose prior career included a stint as president of the Sierra Club, said David and Lucile had different styles, strengths and interests.
With Lucile, meetings could run a few hours, with the Packard matriarch asking numerous questions about the people involved in each grant request.
“Lucile was much more involved in operating the foundation,” Wilbur said of the early days.
David, who was decisive and had a talent for analyzing information, held relatively short meetings with Wilbur. The foundation CEO would run down a list of proposals for David’s quick input.
David, who was running Hewlett-Packard, supported Lucile’s priority of helping children, which culminated in the creation of the Lucile Packard Children’s Hospital at Stanford. The Packards contributed $40 million to the construction of the hospital, which opened in 1991. The Packard Foundation continues to make regular contributions to the hospital, now part of the Stanford Medical Center, through the Lucile Packard Foundation for Children’s Health. In 2013, the Packard Foundation contributed $25 million to support the hospital’s building expansion.
Julie Packard and Nancy Packard Burnett’s interest in marine biology led not only to the 1984 opening of the world-renowned Monterey Bay Aquarium, but also to the founding of the Monterey Bay Aquarium Research Institute in 1987. The oceanographic research center, which uses the latest technology to explore the world’s oceans, receives 80 percent of its annual budget from the Packard Foundation. The foundation granted the institute $38.2 million in 2013. The foundation also continues occasional grant support to the Monterey Bay Aquarium.
Irene Wong, director of local grantmaking for the foundation, said the foundation has donated $1.9 billion to regional programs over the course of its nearly 50-year history. Wong added that the foundation currently funds 190 local groups. The foundation defines “local” as the five counties of Santa Clara, San Mateo, Santa Cruz, Monterey and San Benito.
The foundation’s local issues include population and reproductive health, conservation and science, and children and youth. But it also funds grants under the categories food and shelter, arts and community foundations.
The Los Altos Community Foundation (LACF) receives more than $200,000 annually from the Packard Foundation to donate to nonprofit organizations and programs of its choice.
“(LACF) would be a less established organization without help from the David and Lucile Packard Foundation,” said Roy Lave, who ran LACF as its executive director from its 1991 founding until his retirement last year. “Their grants and consultations have been invaluable in helping LACF begin and grow by developing new programs. For six years, they have funded our community grants program, which has supported most of the established nonprofits in our area and has allowed LACF to incubate much-needed new programs. The Packard Foundation has been a very good citizen supporting our community.”
Under the category children, families and communities, the foundation has regularly donated to First Five programs in Santa Clara County to help families of children from prenatal to age 5. In 2010, it combined forces with other area foundations to form the Out-of-School Time collaborative to improve local afterschool programming.
The foundation funds safety-net organizations such as Second Harvest Food Bank, which serves an estimated 250,000 residents per month. Closer to Los Altos, the foundation contributed $200,000 in 2013 to both Hidden Villa wilderness preserve in Los Altos Hills and the Community School of Music and Arts (CSMA) in Mountain View.
“The Packard Foundation has been the longest-standing foundation supporter of the Community School of Music and Arts,” said Vickie Grove, CSMA executive director.
Grove said the foundation has donated $3.6 million to CSMA since 1991. The foundation contributed more than $1.6 million to the school’s capital campaign, which resulted in its permanent location on San Antonio Circle.
“The foundation’s recognition of the value of arts and music education is unparalleled, and its unwavering support is greatly appreciated,” Grove said.
The Packard Foundation is a major supporter of the annual Town Crier Holiday Fund. The foundation grants $20,000 annually to the fund, which supports 20 local nonprofit groups.
The foundation also has provided funding to the Krause Center for Innovation at Foothill College in Los Altos Hills, a center that helps teachers improve their skills through technology.
The foundation’s reach spans all seven continents.
Larson recently visited Ethiopia for the third International Conference on Family Planning. The foundation is funding implementation of the first community-based reproductive health programs in the African nation.
“Ethiopia has emerged as a world leader among developing countries in effectively improving access and use of family planning,” Larson said. “Throughout the week, it was a source of pride for me to hear and see again the significant role our foundation and our investment has played in Ethiopia.”
When the Packard Foundation began its work in 1999, Ethiopia’s contraceptive prevalence rate totaled approximately 6.5 percent. After funding programs that boosted access to reproductive health education, the prevalence rate rose to more than 30 percent.
In Brazil, the foundation has partnered with Instituto Centro de Vida, an environmental organization that aims to curb deforestation and degradation in the northwest region of Mato Grosso through a project involving seven municipalities and 120,000 people. The goal is to offset an annual loss of approximately 1,000 square kilometers of forest per year for logging and cattle ranching.
In China, the foundation is fighting climate change. It is among the major funders of ClimateWorks, an organization that supports public policies that address climate change by mandating limits on annual global greenhouse gas emissions.
David Packard’s 1978 and 1994 trips to China, where he met with the country’s top leaders, led to the 1999 formation of the Packard Foundation-funded China Sustainable Energy Program. According to Wilbur, the program assists Chinese agencies, experts and entrepreneurs in solving energy challenges.
In India, the foundation has invested substantially in making family planning and reproductive health services available to an estimated 40 million women in Bihar and Jharkhand, among the most populous and poorest regions of the country.
In Europe, the foundation is involved in the Roundtable on Sustainable Biofuels, an international multistakeholder initiative that brings together farmers, companies and nongovernmental organizations to ensure the sustainability of biomass fuels.
In Australia, the foundation partners with the World Wildlife Fund, the world’s largest private nonprofit conservation organization, to protect the diversity and abundance of life on earth.
Even in remote and desolate Antarctica, the foundation funds the Antarctic and Southern Ocean Coalition, which champions conservation and biodiversity.
Help and change
“One of the biggest differences in this foundation – there’s change and then there’s help,” Wilbur said. “We get involved in the change side, helping people do good things.”
Wilbur offered examples from his tenure as CEO, revealing how the foundation acts in strategic ways to improve quality of life – even ways that involve little financial investment.
In the early 1990s, East Palo Alto was a hotbed of crime, often referred to as the “murder capital” of the country.
“The crime was mostly drug-related,” he recalled.
The foundation, Wilbur said, supplied funding for walkie-talkies to an emerging grassroots group called Just Us, whose members confronted drug dealers and relayed information to police. In addition, the foundation paid for the hiring of a city planner for East Palo Alto, a position the city could not afford on its own.
As a result, a major shopping center replaced the city’s dilapidated infrastructure. Retailers such as Home Depot provided tax revenue, improving the city’s financial outlook. The new development created 500 jobs.
“One by one, the drug dealers left,” Wilbur said, and the murder rate nosedived.
In Mexico, Wilbur said the foundation paid for production of soap operas that promoted family planning, influencing approximately 500,000 women to seek reproductive health options. The effort played a role in good statistical news: Mexico, on target to reach a population of 120 million by 2000, came in at 96 million.
“There are many areas where the foundation has made good progress,” said Susan Packard Orr, chairwoman of the Packard Foundation board.
Key to the foundation’s success is its commitment to partnering with other foundations to pool resources and better achieve goals. Larson estimated that the foundation has collaborated with at least 25 other foundations, from Sobrato to Bill and Melinda Gates.
“Our work with the Packard Foundation has spanned issues from leadership development to early childhood education, and, with their strong support, we were able to make significant contributions to safety-net services in Silicon Valley in recent years,” said Emmett Carson, CEO of the Silicon Valley Community Foundation. “They also provided important seed funding for our Donor Circle for the Environment. The Packard Foundation continually exemplifies how a dedicated and visionary foundation can create positive change locally and in communities around the world.”
Larry Kramer, president of the Menlo Park-based Hewlett Foundation, said his foundation partners with the Packard Foundation on a wide range of projects.
“The biggest partnership, of course, is our mutual work on climate change,” he said. “But there are many others: We jointly funded (with several other California foundations) the California Forward effort to achieve political and fiscal reform in the state.”
Larson noted that the two foundations have each committed more than $500 million to address reduction of carbon emissions.
How the foundation operates
Foundation members do their homework carefully before they commit to grants.
“We do a lot of upfront work,” Larson said. “We carry out due diligence and then work with grantees to monitor the progress of every grant we make.”
Transparency is important to the Packard Foundation. Its website is filled with information about its numerous projects and the amounts donated. It even includes foundation tax returns.
The foundation gives away 5 percent or more of its endowment every year. An 11-member investment team oversees foundation assets and ensures solvency in the years ahead.
Until 2002, all of the foundation’s assets were tied to HP stock. When the tech sector soared in the late 1990s, so did HP stock and the foundation’s assets. Officials disbursed more than $400 million in grants in 1999 at the height of foundation wealth. When the market crashed in 2001, HP stock and foundation assets plummeted. Foundation officials postponed plans to build a new headquarters and endured staff layoffs.
The foundation has since diversified its investments to the point where less than 3 percent of its assets comprise HP and Agilent stock.
Inspired by the “HP Way,” foundation members adhere to a code of ethics that emphasizes honesty, integrity and respect for others. Foundation personnel are continually reminded to really listen to what grantees have to say.
Barnholt, who joined Hewlett-Packard in 1966, agreed that the foundation functions in a similar fashion.
“Honest, direct people,” he said of the foundation’s personnel. “No egos, a lot of respect and trust, and a lot of teamwork consistent with the HP Way.”
Los Altos resident David Orr, a board trustee since 2000, said the foundation adopts the philosophy of his grandfather, David Packard: “Find great people, give them resources to do the job and get out of the way.”
Orr said he brings to the table a “generation next” perspective, identifying new issues in the changing world that should command the foundation’s attention.
“One of the problems with philanthropy,” Larson said, “is – how do you keep from being insular?”
For more than a decade, the foundation has enlisted a third party to survey its grantees about their experiences with the foundation. Currently, the foundation does this through the Center for Effective Philanthropy, an organization the foundation helped create and that today conducts such anonymous surveys for hundreds of other foundations.
The results of the center’s survey of grantees are posted in full on the foundation’s website.
Leading by example
Reflective of the foundation’s commitment to conservation and sustainability, its new 49,000-square-foot headquarters at 343 Second St. generates more energy than it uses. It cost more than $37 million to construct the building for Net Zero Energy and LEED (Leadership in Energy and Environmental Design) Platinum certification.
To date, the foundation’s building is the largest of its kind in the world. Larson hopes that the building, opened in 2012, will inspire others to do the same.
“We hope it won’t be the biggest for long,” she told supporters at an October open house.
The building, with its tree-lined courtyard and relaxed architectural style, also serves as notice that the foundation will continue to call Los Altos home as long as it’s around.
“We have real roots here,” David Orr said. “We would never consider going anywhere else.”
Barnholt and Orr acknowledged that, given the foundation’s focus on such daunting global problems, its work will never be done.
“At what point can we say we’ve accomplished these goals?” Barnholt asked rhetorically.
Orr added: “The problems we’re working on have not gotten easier over time. The hardest problems are happening in some of the hardest places to work in.”
But the Packard Foundation sets out to address such problems one project and one grant at a time.
“It’s all about moving the needle,” Barnholt said.
“We like thinking big and taking risks, and we do not expect to have complete success in everything we attempt. If we did, we would not be stretching enough,” Susan Packard Orr said. “The world is full of challenges, and we need to find the right balance between staying with an issue for the long term for real impact and remaining flexible to respond to change and recognize potential innovation when it comes along. This is a constant topic of conversation at the foundation, and we are excited by the opportunity to fine-tune our approaches.”
“We’re planning to be around for another 50 years,” Larson said.
How will Packard celebrate its golden anniversary? Taking a cue from its unpretentious founders, celebrations will be kept modest.
“The big news is, it isn’t going to be big news,” Barnholt said. “It’s just not our style.”
For more information on the foundation, visit packard.org.
The Town Crier has scheduled an invitation-only event Jan. 30 to honor foundation employees.