The David And Lucile Packard Foundation Business Information, Profile, and History

Company Perspectives:

The David and Lucile Packard Foundation was created in 1964 by David Packard (1912-1996), co-founder of the Hewlett-Packard Company, and Lucile Salter Packard (1914-1987). They believed the United States to be the home of a unique type of organization dependent upon private funding and volunteer leadership. Together, universities, national institutions, community groups, youth agencies, family planning centers, and hospitals constitute a great U.S. tradition that complements government efforts to focus on society's needs. In many ways, private programs are more effective than those of government. By using private funds for public purposes, programs of this type channel the personal commitment of millions of individuals who participate as volunteers or donors. The David and Lucile Packard Foundation, now in its 37th year, will continue to support these organizations with the hope and expectation that we can strengthen them and, thereby, conserve and enhance resources and improve the quality of life in our community, the nation, and the world.

History of The David And Lucile Packard Foundation

The David and Lucile Packard Foundation is one of the world's largest charitable foundations, with assets of close to $10 billion. Its endowment comes from stock in the Hewlett-Packard Company bequeathed by the company's co-founder, David Packard, and his wife Lucile. Packard was at one time one of the five richest men in America. He gave away an estimated two-thirds of his fortune to his family foundation before his death, and then gave billions of dollars more in the form of Hewlett-Packard stock to the foundation when he died in 1996. The Packard Foundation is the largest shareholder in the Hewlett-Packard Company. The Packard Foundation operates primarily by making grants to educational and charitable organizations. By law, the foundation is required to give away at least five percent of its assets annually. For 2000, the foundation granted approximately $500 million to a variety of organizations in six main areas of interest. These are: conservation; population; science; children, families, and communities; arts, and a sixth category called organizational effectiveness and philanthropy. The foundation is headquartered in Los Altos, California, near San Francisco and the high-technology corridor known as Silicon Valley. Many of the Packard Foundation's grants go to area organizations, such as arts programs in Northern California. The Packard Foundation supports scientific research, with particular interest in ocean science, engineering, and sustainable living. The foundation makes grants to minority scholars to study advanced science and mathematics, and supports science programs at the nation's historically black colleges and Native American tribal colleges. The Packard Foundation also has a key interest in population control and makes grants to family planning organizations in the United States and abroad. The foundation is run by David and Lucile Packard's four children, and the diversity of its interests reflects the varied outlooks of the family.

The Hewlett-Packard Story

The David and Lucile Packard Foundation owes its huge assets to the success of what was perhaps the nation's first high-technology firm in what became known as Silicon Valley. David Packard, raised in Pueblo, Colorado, studied electrical engineering at Stanford University. When he graduated in 1934, in the midst of the Great Depression, it wasn't clear that his new field would yield him a job. Accordingly, he decided to create his own job. He went into business with a friend and fellow Stanford graduate, William Hewlett. The two friends began their business with slightly more than $500 and some tools in Packard's one-car garage. Their equipment included little more than a soldering iron and a drill press, but the two men had many ideas. Some of their first, and unsuccessful, products were a harmonica tuner and a foot-fault indicator for bowling alleys. In 1939 Hewlett-Packard had its first winner with an electronic tester for sound equipment, called an oscillator. This found buyers in the film industry. The firm also developed products for the military. By the late 1950s, Hewlett-Packard had sales of more than $30 million annually, and its almost 2,000 employees manufactured hundreds of different products. During the next decade, sales vaulted to more than $300 million. Packard left the company briefly in the 1960s to work as deputy secretary of defense in the Nixon administration, at the height of the Vietnam War. He later returned to the company, which continued to boom. Two landmark products were the Hewlett-Packard hand-held calculator in 1972, and the LaserJet printer in 1984.

A Family Foundation

The Packard family started the David and Lucile Packard Foundation in 1964. Because of the huge success of Hewlett-Packard, the family was becoming increasingly wealthy. The foundation offered a reasonable format for putting some of their money toward charitable ends. In its early years, the foundation was overseen chiefly by Lucile Packard, who not only handled grant-making decisions but oversaw the design of its modest headquarters building. Grants followed family interests. The foundation gave lavishly to Stanford University, Packard's alma mater, and financed research and scholarship in the sciences. David Packard gave to Republican causes, having served in the Republican Nixon administration, while Lucile Packard wished to focus on children and the poor. She gave her husband photographs of poverty-stricken Native American reservations, which were then hung on the wall of the foundation's headquarters. These served to remind the foundation of the lacks and inequalities its money could address. Under her direction, the foundation supported community programs in Northern California that helped children and families. The foundation also gave more than $100 million to build a pediatric hospital at Stanford, which was named the Lucile Salter Packard Children's Hospital. Lucile Packard was deeply involved in the day-to-day operation of the foundation. She met personally with prospective grantees, visited sites, and evaluated proposals.

Lucile Packard died in 1987. At that time, the David and Lucile Packard Foundation was relatively small, with assets of around $145 million. It made yearly grants of about $10 million. David Packard was one of the richest men in America, worth some $3 billion. A year after his wife's death, Packard announced a huge gift to the Packard Foundation. In 1988 he declared that he would give over $2 billion to the charity, making it suddenly one of the largest private foundations in the country. From a little-known regional organization, the Packard Foundation suddenly ranked number 11 nationwide, in the company of better-known foundations such as the Andrew W. Mellon Foundation, the Rockefeller Foundation, and the Pew Charitable Trusts. The Packard Foundation continued to give grants in areas of which the late Lucile Packard would have approved, with children's health continuing to be a major focus. The foundation also increasingly reflected the interests of the Packard's four children, Nancy, Julie, David, Jr., and Susan. Both Nancy and Julie Packard were marine biologists, and Julie was director of the Monterey Bay Aquarium. The aquarium was built with a donation from the foundation, and the foundation also funded programs to conserve fisheries and promote ocean science. David, Jr., worked in theater, and he was said to be behind the foundation's support of art and archaeology programs.

Becoming a Philanthropy Powerhouse

Although the gift that Packard made to the foundation after his wife's death suddenly made it one of the top-ranked philanthropies in the nation, it remained small in other ways. By the mid-1990s, it still had a staff of only about 50 people. It gave out grants worth about $100 million total annually in the mid-1990s, continuing to follow family interests. Its guidelines remained somewhat general and broad. A foundation publication from 1996 quoted in the New York Times (May 6, 1996) stated that the organization hoped to "help people through the improvement of scientific knowledge, education, health, culture, employment, the environment, and quality of life." When David Packard died in March 1996, the foundation found itself for the second time suddenly bestowed with an astonishing amount of money (in the form of Hewlett-Packard stock). It had gone from having assets of around $100 million in the mid-1980s to over $1.5 billion a decade later, due to the infusion of Hewlett-Packard stock after Lucile Packard's death. David Packard left the bulk of his estate to the foundation, adding another $4 billion to its assets. This catapulted the foundation from its ranking as number 11 to one of the top three or four philanthropies in the United States. The well-known Ford Foundation had an endowment of around $7.4 billion in the mid-1990s, followed by the Kellogg Foundation, with assets around $7 billion. The Packard Foundation's assets rose to more than $6 billion and continued to rise as the value of its Hewlett-Packard shares increased.

The Packard family reacted cautiously to the new infusion of wealth into the foundation. The foundation's president was Susan Packard Orr, and the other Packard children had long been active in running the organization. After their father's death, the Packards spent several months developing a strategy for the foundation and making open-ended plans for dispensing funds. The Packards wanted to keep to their earlier goals, working on such issues as overpopulation, science education, and preservation of the environment. But with greater assets than before, it was possible to make bigger grants or approach issues in a more global way.

In 1997, the Packard Foundation gave to large number of groups, many of them active in environmental protection and population control. The foundation funded the World Wildlife Fund, the Environmental Defense Fund, the World Resources Institute, the Reproductive Rights Action League, Planned Parenthood, the National Abortion Rights Action League, and others, all of which reflected the long-term concerns of the Packard children. However, the right-leaning political commentary magazine National Review ran an article (March 23, 1998) claiming that the foundation's backing of these predominantly liberal causes flew in the face of the values of David Packard. Packard's wishes for his foundation had been expressed in a private letter to his children in 1987, apparently in very general terms. After his death, the foundation continued to back projects that he had begun in his lifetime, such as grants to historically black colleges to fund science education. The foundation also continued along lines that Lucile Packard had mapped out decades earlier. It gave heavily to groups that encouraged child welfare, funding area after-school daycare programs, giving $1 million in 1998 to build a new Child Development Center at San Jose State University, and making many smaller donations to child advocacy groups. The foundation also made special note of David Packard's hometown of Pueblo, Colorado. Beginning in 1999, the foundation gave several grants to Pueblo organizations, funding an aircraft museum, a health center, a school, and a Jewish temple, among others. Support for regional art centers continued as well. The Packard Foundation backed many Northern California arts institutions, giving grants to the San Jose ballet company, and helping rebuild a civic theater in Santa Cruz, among other projects. The foundation gave out 1,155 grants in 1998, totaling about $3.5 million. About 40 percent of these funds went to groups in the four counties surrounding the foundation's headquarters. Another 57 percent went to domestic organizations, and only 3 percent went to organizations abroad. In 1999 grants increased to over $4 million, with a slightly larger percentage going to international groups.

In 1999, the foundation's total endowment increased to around $13 billion, buoyed by the rising worth of Hewlett-Packard stock. The Packard Foundation became one of the wealthiest in the world, surpassed only by Britain's Wellcome Trust, and the rapidly growing Bill and Melinda Gates Foundation. Like the Gates Foundation, which got its funds from the family of Microsoft chairman Bill Gates, the Packard Foundation represented a new era in U.S. philanthropy. Older philanthropies such as the Carnegie Corporation and the Rockefeller Foundation depended on money earned in industry in the early part of the 20th century. The Packard Foundation represented a fortune made in high technology, which had boomed extraordinarily at the very end of the century. Except for the overshadowing presence of the Gates Foundation, its wealth was almost unprecedented. Grants made in 2000 totaled approximately $614 million. Even as its assets shrank to $9.8 billion as of December 31, 2000, it remained far larger than many older philanthropies. The foundation expected grants for 2001 to total around $550 million.

Principal Competitors: Bill and Melinda Gates Foundation; Wellcome Trust; Ford Foundation.

Chronology

• Key Dates:

• 1934: David Packard co-founds Hewlett-Packard.
• 1964: David and Lucile Packard establish the foundation, with Lucile taking primary responsibility for its structure and focus.
• 1987: Lucile Packard dies.
• 1996: David Packard dies and bequeaths billions of dollars to the foundation in the form of Hewlett-Packard stock.