January 8, 2004 | Read Time: 6 minutes
The David and Lucile Packard Foundation conducted a five-month, worldwide search for a new chief executive, vetting dozens and dozens of candidates, only to discover that the person with the qualities the board members sought already worked for them.
Last month, the foundation appointed Carol S. Larson, a 14-year veteran of the Los Altos, Calif., grant maker, as its new chief executive. Ms. Larson, who previously served as the organization’s vice president and director of programs, replaces Richard T. Schlosberg III, who announced his retirement in June.
The organization’s trustees chose Ms. Larson based on her “vision and integrity,” says Susan Packard Orr, chairwoman of the fund. “We talked to many highly qualified candidates from a wide array of backgrounds and came away even more convinced that Carol’s focused, gracious leadership will best ensure the foundation stays our course in programs and philosophy while pushing to be even more effective.”
Ms. Larson, who turned 51 a day after she learned of her new job, will oversee an organization that has endured several financially tumultuous years. The Packard Foundation’s assets reached $13.1-billion in 1999 but fell to $4.8-billion three years later due to a drop in the value of Hewlett-Packard stock, which makes up most of the fund’s portfolio. The tough financial times have forced the foundation to lay off 60 of its 160 employees and cut its grant making from $500-million in 2001 to $200-million this year. Despite the decline in its endowment, the foundation remains one of the 10 wealthiest in the nation (The Chronicle, March 20, 2003).
Ms. Larson says she believes the foundation has now reached a period of financial stability, thanks to the improving stock market and a new investment strategy designed to diversify the fund’s portfolio.
But even as Packard’s endowment begins to grow again — its assets rose slightly above $5-billion by the end of 2003 — Ms. Larson says the foundation has no plans in the next year or two to start new programs to replace the ones that were cut during the last few years. “But as our assets continue to grow and some of our commitments come to a natural transition, we’ll be looking out ahead,” she says.
Ms. Larson describes herself as a “Garrison Keillor kind of child” since she grew up in a small Minnesota town. After working in California as a lawyer and a nonprofit advocate for children’s issues, she joined the foundation in 1989. As president of the foundation, her annual salary will be $450,000. (By the end of his tenure with the foundation, Mr. Schlosberg earned $495,000.)
In an interview, Ms. Larson discussed her new position.
How do you respond to people who may have concerns about Packard choosing an insider?
I actually spoke with the trustees a lot about this issue. I feel committed to holding myself accountable for making sure this organization and staff have processes in place to constantly be seeking refreshment of our thinking. We all have perspectives that blind us sometimes to new directions, but an outside candidate would have that as well.
It’s an important priority for a CEO of any organization, but certainly for a family foundation, to make sure the organization keeps open to better ways of doing things.
What are your plans for the foundation?
Certainly I want to do an audit of our organization to make sure we are fully utilizing the mechanisms to hear fresh voices. Second of all, there’s more we can do as an organization to use our non-grant-making dollars. We have been making program-related investments for a number of years, and there’s an opportunity to do more. It basically is using your endowment to make loans to nonprofit organizations at below-market rates or for no interest rate at all. In our experience, they’ve used these for capital campaigns.
And we’re increasingly using communications in areas where we are deeply experienced, for example, in our [conservation] work on oceans. We have a lot of knowledge here and in our grantees, and so how can we best use that knowledge, share it, and raise our voice, and help grantees use their voice, in a more focused way?
Why did you think you were the best person for the job?
I came with a strong commitment to working on children’s issues, which is one of our program areas, but also experience in the business world. And then deep experience, of course, here with the foundation in both growth and downsizing cycles. The management experience and training I’ve had over the last five years with Dick Schlosberg were really valuable, but also the fact that I had other experience prior to the foundation gave me a unique combination of skills.
It was also helpful, but not essential, that I actually knew Dave Packard as chair of the board and had some sense of him.
If you hadn’t been offered the job, would you have left the organization?
Yes. I felt ready to lead an organization and would’ve sought an opportunity to do that if it hadn’t worked out here.
Why are you making less than your predecessor?
It would make sense that Dick’s salary would be higher because he’s been here for five years and had performance increases. The board wanted to make sure they were setting salaries at a level that was fair and would attract high-quality talent.
What do you see as the most pressing issues facing the foundation world?
We’re in a really exciting and healthy time in philanthropy and the nonprofit sector. The scrutiny and the self-reflection is very healthy. While the vast amount of foundations are in good shape in governance standards and in their attention to the effectiveness of their work, there’s always room to improve.
ABOUT CAROL S. LARSON, PRESIDENT OF THE DAVID AND LUCILE PACKARD FOUNDATION
Education: Earned a bachelor’s degree in psychology from Stanford University in 1975 and a law degree from Yale Law School in 1978.
Previous Employment: Served as a law clerk to a judge in the United States District Court in the Central District of California, then as coordinator of advocacy for the Exceptional Children’s Foundation, in Culver City, Calif., which provides services to developmentally disabled people. In 1983 she joined the law firm of O’Donnell & Gordon, in Los Angeles, and six years later became the Packard Foundation’s director of research and grants at its Center for the Future of Children.
Charitable interests: Serves on the board of Northern California Grantmakers, an association of foundation officials, and donates to groups focused on children’s issues and to the Lutheran church she attends.
What she’s currently reading: Synchronicity: The Inner Path of Leadership, by Joseph Jaworski.
Sabbatical: Recently took three months off from Packard, during which she took a trip to Oslo with her husband and two children to visit relatives and villages where her ancestors lived.
