One of the most frustrating aspects of foundation work is the frequency with which worthy causes have to be turned away, often for no other reason than that they don't fit the foundation's specific mandate. In just four years, though, the children and grandchildren of the late William Hewlett, co-founder of Hewlett-Packard Company, and his late wife, Flora, have created a model that successfully skirts this problem -- while also passing the Hewlett family tradition of giving to its younger generations.
The Flora Family Foundation (www.florafamily.org) was established in 1998. Walter Hewlett (son of William and Flora, and chair of the William and Flora Hewlett Foundation) approached Herant Katchadourian, Stanford University professor, Hewlett Foundation board member and long-time family friend, with an idea for a family foundation he and some of his siblings were considering. A key concern in the decision to establish a new organization, Katchadourian says, was Walter Hewlett's frustration at having to reject proposals submitted to the Hewlett Foundation that, while worthwhile, did not meet that foundation's guidelines.
That year, Walter Hewlett drew up a constitution, naming Katchadourian president. Once Katchadourian had interviewed family members to assess their interests, he proposed the creation of a family council to meet once a year as an advisory group to explore long-term activities, set policies and, from its ranks, elect a seven member board: two of William and Flora Hewlett's five children; three grandchildren; and two non-family members (currently Katchadourian and Susan Briggs, a lawyer for the family).
A defining characteristic of the newly formed foundation was that all proposals would need a family sponsor, whose statement would appear on the docket at board meetings held four times each year for discussion and approval. To date, no grants have been rejected. There are currently 23 children, grandchildren and spouses involved.
There were no defined program areas at the outset. "We said that we would fund anything anywhere within reason to give maximum flexibility," says Katchadourian, who, based on his experience at the Hewlett Foundation, felt that discrete program areas would evolve over time.
Furthermore, there was initially no limit to how many projects family members could sponsor. "We'll put the bread in the mouth that's chewing," is how Katchadourian describes it. During the first year, Katchadourian says he had to do quite a bit of "arm-twisting and cajoling" to ensure that all family members were involved in at least one project. That problem soon vanished. The first grants were to organizations that had been invited to submit proposals ("or else we'd be inundated with requests"). This policy is still in place. Some went to groups the Hewlett Foundation had been unable to fund, and initial grants were for one year and small -- no more than about $55,000.
The initial endowment was $100 million, with another $100 million added later. As assets plummeted recently due to the falling stock market, however, new adjustments had to be made.
"Last year we decided that each person would have an allocation of $100,000," says Katchadourian. "Anything more than $25,000 had to be approved by the board; anything less would be approved by me," says Katchadourian. A president's discretionary fund of $50,000 provides grants of $5,000 to $10,000 for disaster relief.
The Flora Family Foundation also encourages family members to support projects of special interest through a matching gift program that matches up to $5,000 in giving 2:1.
The foundation has also demonstrated that it is possible to operate with a small core staff. Katchadourian, who initially worked one day per week, eventually increased his time to two and a half days. As activities grew, the board hired a full-time staffperson, recruiting B. Stephen Toben, a Hewlett Foundation program officer specializing in environmental issues, as vice president. There are also a chief financial officer and part-time secretary.
Addressing global disparities
A turning point came when Esther Hewlett, one of the siblings, brought to family members' attention an article in The Chicago Tribune describing the disparities between rich and poor countries. "[Aunt] Esther was very upset, so we decided to explore ideas about what we could to make a difference," says Juliette Gimon, whose mother, Eleanor Gimon, is one of the five Hewlett children.
The ensuing discussions led the foundation to explore overseas giving opportunities, mainly through partners with a track record of accomplishment, such as Ashoka, the Global Fund for Women and Oxfam America. Family members then agreed to allocate $1 million of the annual spending budget to a "Gap Fund" (so called because it addresses the "poverty gap") that supports projects addressing overseas poverty.
An important role for site visits
"Knowledge is crucial to good grantmaking," says Juliette Gimon, and so site visits were arranged to give family members first-hand exposure to the problems they had read about. "These were extremely helpful. They definitely engaged some of my younger cousins who are in their early 20s and late teens. Philanthropy is still very new to them," adds Gimon, who notes that one cousin was particularly affected by a visit to South Africa: "She'd never been to a developing country before. She had very little prior understanding." A key observation of these visits was that small amounts of money could make a significant difference.
After launching projects in Africa, the Gap Fund then expanded into Latin America and Asia, becoming the first project resembling a program area. Over time other areas evolved similarly, as Katchadourian had predicted they would, focussing on the environment and education. Since Katchadourian wanted to ensure that the grandchildren paid attention to cultural concerns, "We started the idea of preserving documents and monuments -- supporting organizations that repair and save monuments," he says.
Over time, individual family members began defining their own areas. For example, Juliette Gimon specializes in global philanthropy, and her brother, Eric Gimon, a theoretical physicist, gives some of his grants to projects that encourage physics education. An interesting development is that more family members are finding common interests, working together on certain grants. And, as family members become more proficient in grantmaking, the foundation becomes more proactive, looking for ways to leverage its funds to support new groups or to create partnerships.
A critical advantage of a low-profile family foundation like Flora is that it can act quickly. Juliette Gimon had been impressed by a book called Where There is No Doctor, which the Hesperian Foundation had supported to disseminate information on health care to impoverished communities worldwide. Two Stanford physicians admired the model and felt that something similar should be produced to promote a greater global awareness of HIV/AIDS. They created a book that discusses how people get the virus, arrange for testing and get counseling. Gimon arranged for an immediate grant of $100,000 to have it translated into additional languages, including French, Spanish, Portuguese and Shona and distributed to 1,000 nongovernmental organizations worldwide. Then, using Flora's leverage, she arranged to send copies of the book to CARE and other organizations that could use it.
The future of giving
Perhaps the best indication that the Flora Family Foundation model has a bright future is Mary Hewlett. Just 13 years old, she recently spoke about her philanthropic activities to a gathering of members of the Global Philanthropists Circle in California. Surely William and Flora would have been proud.