Susan Packard Orr on Philanthropy

Manager of a multimillion-dollar budget, chair Susan Packard Orr, MBA '70, describes the future direction of the Lucile and David Packard Foundation.

by Jennifer Reese

As the new year begins, some $4.5 billion in Hewlett-Packard stock will be transferred from David Packard's estate into the family foundation he created 33 years ago. This means that the David and Lucile Packard Foundation--which had a budget of $160 million in 1997--will hand out $275 million in 1998, and some $400 million in 1999. The foundation is already giving to a wide variety of programs, funding everything from the Center for the Future of Children, which does grantmaking and policy analysis, to the Monterey Bay Aquarium Research Institute. The Packard Foundation also helps conservation organizations buy land, funds school districts that are trying to improve their reading instruction, and tries to help nonprofits do a better job managing their organizations. But even with a long and varied experience with philanthropy, figuring out what to do with such a rapidly growing budget is a big job: With so many worthy causes clamoring for support, how does a foundation choose?
       Susan Packard Orr, MBA '70, is chairman of the David and Lucile Packard Foundation, and she talked to Stanford Business about the enormous choices and challenges ahead. Orr is also founder and president of Technology Resource Assistance Center (TRAC), a firm that develops software for nonprofit organizations.

Q. Foundations often specialize in a particular area or become famous for a certain type of grantmaking. The MacArthur Foundation, for instance, is renowned for its "genius" grants to individuals. With the Packard Foundation budget ballooning, have you decided on any one area you'd like to start directing more money toward now that you have the chance?

A. World population. Last year our budget for this was $8 million, this year it's $12 million, and once we're fully ramped up in a couple of years it's going to be $70 million or more. Outside of the United Nations and governmental agencies, this should make the Packard Foundation the biggest organization in the world focusing on population.

Q. Why the focus on this particular issue?

A. When you're faced with all these broad societal problems, you have to make some choices, and this is something my father was interested in. If you're really concerned about the future of the human race, what it comes down to is there are too many people. This is an area we know something about, and we feel we can have an impact. According to the Population Council, only 51 percent of all the fertile couples in the world have access to family planning. So even if they wanted to use family planning of some sort, a lot of people couldn't get it. And while educating women tends to reduce the birth rate, and overall economic development also helps, we've chosen to focus on trying to convince people directly to have smaller families. We're not shy about stepping up to the plate and talking about the importance of family planning. Some organizations are.

Q. Can you give me some examples of family planning programs you've funded that you think have worked well?

A. One interesting program we've funded produces very popular motivational soap operas on radio and television in Mexico and Tanzania. These are regular soap operas, but they also contain messages about family planning, family size, and, in Tanzania, information about AIDS as well. We know they're effective because in Mexico there's a large state health agency that has reported that in an 18-month period, 500,000 women came in for family planning and said they did so because of this soap opera.
       Another program I'd like to mention is one we've funded through Population Services International, which uses an approach called social marketing. It sets up marketing systems in countries so that every tobacco store and corner grocery is selling condoms. We funded this in Bangladesh, and someone went out to all the little stores throughout the country and got them started selling condoms. The program can also help start a condom- manufacturing system, if that's necessary. The other model for getting condoms out is through big government programs, but then if something disrupts the government, like a coup, the whole system grinds to a halt. If you can embed it in the economy, it keeps going because all the individual store owners see value in doing it. It's completely market-driven and therefore it's more permanent.

Q. Science and engineering are another big focus for the Packard Foundation, accounting for around 30 percent of your giving. What are some of your major programs in this area?

A. We have the Packard Fellowship Program, which provides support for young science professors early in their careers. We give them $100,000 a year for five years. We're trying to free them from spending a lot of time raising money. There have been seven Packard Fellows right here at Stanford. We've also had a program in place for some years that is trying to improve the teaching of science and math in historically black colleges and universities. The foundation wants to encourage those schools to turn out more scientists and engineers. One of the issues is that there has not traditionally been a large number of African American professors in science and engineering, and so we're funding graduate students in those fields.

Q. Although you give money to programs all around the world, you've also taken an interest in local projects. What innovative programs are you involved with in Silicon Valley these days?

A. We do a lot in the local four-county area, supporting everything from the arts to day care. One particularly interesting project we've been funding locally works with grass roots groups in different neighborhoods. The whole idea is the people in the neighborhoods come up with the ideas: They might want to put in a park, or they might want a traffic light on the corner--but they don't know how to lobby the city. We're helping them do it. In 1992 in East Palo Alto we funded something called "Just Us"--which, if you say it fast, sounds like "Justice." This was back around the time when East Palo Alto was named the murder capital of the nation, and there were some people in East Palo Alto who really wanted to do something about it. So we gave them money to buy walkie-talkies and video cameras and they picketed drug dealers and videotaped drug deals and wrote down the license plate numbers of people coming to East Palo Alto to buy drugs. This was pretty compelling. If you're buying drugs in East Palo Alto and someone is writing down your license plate number, that would probably keep you from coming back.

Q. How, if at all, is the Packard Foundation planning to address the potential upheavals that are expected in the wake of welfare reform?

A. I'm a big believer in the cross-sector approach. Gateway 101 is an interesting program in East Palo Alto, and it draws on the resources of the city, various businesses, and nonprofits. It involves a shopping center in East Palo Alto with a Home Depot, Office Depot, a Good Guys, and a CompUSA, and when the city negotiated with the companies to put in the stores, it negotiated a first-source hiring agreement whereby the companies have agreed to hire people from East Palo Alto. A nonprofit organization called Opportunities Industrialization Center West (OICW) will then train them in basic job skills like customer service. Those folks will be placed in other CompUSAs and Home Depots in the area for on-the-job training, and then they'll be placed in the new East Palo Alto stores. The Packard Foundation will participate by providing some of the funding for OICW and will help pay for the relocation of displaced residents. Of course I don't know if it works, because it's just getting started.

Q. At a time when the government's drive for a balanced budget is leading it to scale back aid to the poor and cut various services, what do you see as the role of private foundations in picking up the slack and helping to solve some of these problems? Or do you see a role at all?

A. My first response is that private foundations can't solve societal problems. All the grant money in all the foundations comes to something like three-tenths of one percent of the federal budget, and that's not enough money to do very much. Second, it's not obvious that private foundations know better than anyone else how to solve society's problems. We really just don't know how to solve the problems of the schools or teen pregnancy. We are very aware that our abilities are limited.
       But on the other hand, foundations can take risks and try new things, fund demonstration programs and see what works and what doesn't. And when we do find something that works, we can use money to leverage money and become advocates for policy changes.

Photo by Daniel Murtagh

"World population. We're not shy about stepping up to the plate and talking about the importance of family planning. Some organizations are."