Susan Packard Orr knew her parents’ values well. Yet those values did not settle every question about the future of the David and Lucile Packard Foundation. How long should the foundation keep funding institutions her parents had supported? Should it always support the community where their wealth had been created?
Her father had deliberately left room for future judgment: his own views had changed over time, and he could not foresee which issues would matter most. [1]
For a succeeding family principal, these choices require assessing an organisation or programme in the context of the family’s history and present responsibilities. An inherited funding arrangement may embody the earlier generation’s commitment to particular work, preserve relationships they built and provide support others rely on. That support can allow an institution to undertake work whose results may take years to appear. A successor needs to understand what the arrangement does and how a change would affect those involved.
But the reason a commitment began may differ from the reasons to retain it today. A family may have first supported an institution through a founder’s personal connection. That connection may have faded, while the institution now provides a service the family still considers important. Conversely, the need that originally justified the support may have diminished. The commitment’s history helps explain the original choice. Whether it should continue depends on the need it serves today and how well it meets that need.
A successor therefore needs to examine the particular arrangement, rather than stop at a broad statement of family purpose. A foundation’s commitment to education does not settle whether it should continue, redesign or close a particular programme. If students cannot obtain similar support elsewhere, closing the programme could leave them without that help. If a different form of support would help those students more, adopting it could better fulfil the family’s commitment to education.
A family can remain committed to the same work while changing how its businesses are organised. In its 2019 annual review, the family-owned media group Bonnier reaffirmed its commitment to independent journalism, books and films. At the same time, the owners described a change in governance: management teams now had greater freedom and responsibility, and each answered to its own board. The aim was to support the growth and profitability needed to fulfil that commitment. [2]
A proposed change must also be workable. A new arrangement may look more efficient but depend on skills or relationships the family does not yet have. Changing the arrangement may also damage the trust that sustains the existing work. Keeping it, or testing a limited change before going further, may therefore be the better choice. The comparison should consider the costs of both changing it and leaving it in place.
Assessing these choices may be harder when the reasons behind an arrangement are unclear. Records may be missing, and people may remember different reasons. Long-serving staff, advisers and those affected can help explain why it began, how it has changed and what it does now. The family need not reconstruct the entire history. It should clarify any uncertainty that could affect whether the arrangement should continue or how it could be changed.
Even where a change seems worthwhile, the family must establish who can authorise it. Trust terms, agreements and existing decision rights may limit the options. Any transition must also honour commitments that remain.
An arrangement may pass to the next generation unchanged. Continuing it should still be a considered choice, based on what it contributes today and what changing it could improve or put at risk.