Professor Irv Grousbeck Speaks about the William and Flora Hewlett Foundation
Damon Vangelis
Issue date: 10/29/01 Section: Features
- Page 1 of 1
Recently, I had the opportunity to meet with Professor Irv Grousbeck in his office in Littlefield. His popular courses on entrepreneurship have inspired many GSB students over the past 15 years to take a leap of faith and either start or buy their own companies. However, during our meeting, he spoke about another side of his life – his involvement in public service, specifically his experience as a Trustee of the Walter and Flora Hewlett Foundation. He spoke about the particular challenges a private grant-making institution such as the Hewlett Foundation faces in establishing measures for success and promoting accountability. He also spoke a bit about how he came to know Bill Hewlett, the management principles he brings to the task of overseeing a major philanthropy, and Bill Hewlett’s lasting mark on the Foundation. What follows is a transcript of that meeting:
The Reporter: Thank you for agreeing to speak with us about your work with the William and Flora Hewlett Foundation. We’re interested in learning more about the virtuous circle of entrepreneurship and philanthropy in which an entrepreneur’s creativity, skills, and determination lead to a successful business venture – and how that business, in turn, generates surplus wealth that benefits the firm’s employees, shareholders, and investors – and how that surplus wealth is often then cycled into foundations, educational institutions, and charitable organizations, which has the effect of strengthening the environment that spawns entreprenuership. And then the cycle begins again. So to get us started, could you tell us a bit about your involvement with the Hewlett Foundation and how you came to join its Board?
IG: I think I joined 4 or 5 years ago. I don’t remember the exact date. It may have been the fall of ’96, although it might also have been ’97. I joined at the suggestion of Bill Hewlett. He and I were neighbors, and my wife and I actually bought the lot on which we subsequently built our house from Bill Hewlett. It was owned by him, and that is how we became acquainted in the mid-80s when we first came to Stanford. He and I became friends. He was friends with many, many people. So I was one of his later friends in his life. Then in the mid-90s, he asked me if I would join the Foundation Board, which I did. So that is how that arose.
The Reporter: Did you have much experience working with either non-profits or foundations before joining the Hewlett Foundation Board?
IG: I had never been on a foundation board, but I had been involved in numerous non-profits. Back in Boston, I was head of the New England Eye Bank. I was the head of a large teaching hospital in the Boston area. I was Vice-Chairman of the Massachusetts Board of Higher Education. I was also involved with the Children’s Hospital in Boston, and numerous others. In this area, I was head of the Menlo School and College Board. So I have always been involved in non-profits in addition to my business activity and teaching activity. But I had never been involved in a private grant-making foundation, per se.
The Reporter: What sorts of expectations did you have going in, and what did you believe would be expected of you in terms of commitment, time, and expertise?
IG: The Foundation has quarterly meetings which last a day and a half – Sunday afternoon, sometimes Sunday evening, and most of the day on Monday. Four times a year. I think the Board’s expectation was probably that I had a business perspective having been in business a long time, and having been an entrepreneur myself. They thought that I might have the business management operating perspective for their Board I suspect. I do not know that anyone really analyzed it, but if they had looked at my background, that is what they would have seen. I was welcomed as was everybody else who was appointed to the Board because I was Bill’s nominee and it was really Bill’s board until shortly thereafter he became sick and fell into declining health and took a less active role. And in the last three years or so, no role at all because of his incapacitation.
The Reporter: Philanthropy lacks the clean “bottom-line” metrics that dominate business investments and returns. How challenging have you found it to establish metrics and benchmarks for success in evaluating grants?
IG: Well, I think these are issues that the entire non-profit world is grappling with, which is measurement of success. That world is looking for something better than the goals set by the grantee and agreed to by the grantor. Those have traditionally been the metrics. The reasoning has been that with this grant we expect to be able to do this, this, and this. We are going to hire this person or we are going to enter this area or institute this program or whatever it is we are going to do. And then, after the money is granted, there are interim reports and then there is a final report if you will. And whether it is done or not is then documented if you will. But somehow a lot of people feel that falls short and I think the whole question of how a granting entity decides what grants to make is something that is being examined not only by the Hewlett Foundation and Paul Brest but also by other thoughtful elements of the grant-making world. They are trying like to figure out whether something more rigorous than grantee objectives that get approved by the grantor can be implemented and instituted. They are trying to figure out whether there is a better way or an additional way to look at effectiveness.
The Reporter: One issue that is often overlooked in philanthropy is donor intent. Many foundations are given very broad mandates and lose sight of their benefactor’s vision and values. The Hewlett Foundation would appear to have been fortunate in this regard – Bill Hewlett led the foundation for over three decades before his death. Many other foundations are created only after the benefactor dies – as part of some estate plan. In your years with the Hewlett Foundation, do you or the other board members ask questions like, “Is this something Bill Hewlett would want to support?” or are his values considered in some other way?
IG: Bill Hewlett’s management style was always to surround himself with good people and give those people broad decision-making power. And I that I believe was true when he assembled the Trustees of this Foundation. Three of his children are on the 11 or 12 person Board. And of course, indirectly his thinking comes through him. But I don’t believe I have ever heard in four of five years of meetings somebody say ‘Bill would have wanted us to do this or to do that or to act in this way.’ I think his values permeate the organization. His integrity. His social conscience. Many of his other great qualities. But in terms of decision-making, I think people are just trying to make the best decisions at the time and not thinking would Bill have wanted this or not.
The Reporter: In many of the tributes to Bill Hewlett immediately after his death in January noted the tremendous infusion of funds that was headed to the Hewlett Foundation. At the time, it was estimated that the infusion would make the Hewlett Foundation the second largest foundation in the Bay Area – second to the Packard Foundation which has $12 billion in assets. But I believe a lot of that wealth was tied up in Hewlett Packard stock. HP stock has been hit hard over the past six months. Did the decline stock price affect the amount of money available to the Foundation? Or was it diversified soon after Bill Hewlett’s death?
IG: Quite a lot of that wealth was in HP stock. I spoke with Laurie Hoagland, the Chief Investment Officer of the Foundation, the other day, and he said that the pro forma assets of the foundation – assuming that everything that is going to pour over from Bill Hewlett’s estate to the Foundation – had diminished from about $8-plus billion to about $5 billion, so there has been a very substantial diminution of value.
The Reporter: When the Hewlett Foundation receives an infusion of HP stock on the level of a few billion dollars, and then diversifies that infusion, does the Foundation communicate its plans to anyone in advance? to HP? or to the capital markets in some public way so that it is known why the stock is being sold?
IG: Both the directors and management of the Hewlett Packard Company and the Trustees of the Hewlett Foundation have separate fiduciary responsibilities so that we do not coordinate with them. There is a specific Hewlett Packard Stock Committee of the Hewlett Foundation which makes all the decisions about selling HP stock and they look at only the fiduciary responsibility of themselves as the investment committee and some of the Trustees of the Hewlett Foundation. Obviously they don’t want to be disruptive to the marketplace in general, but they are not talking with Carly Fiorina and saying, ‘Is it OK if we sell stock?’ because that would be inconsistent with their fiduciary responsibilities. Now of course we want to have an orderly market and want to do it in a responsible way.
Now, it is generally known that the policies of the Hewlett Foundation have been to balance their assets in an orderly fashion. And balance their assets means that you are going to be selling Hewlett Packard stock from time to time, and they are certainly aware of that. But the exact amounts and timing is not something that is – to my knowledge – discussed in advance with them.
The Reporter: The Hewlett Foundation annual report lists 7 different program areas of focus – conflict resolution, education, environment, family and community development, performing arts, population, and U-Latin American relations. From a management standpoint, given the Foundation’s assets, do you have a sense of how many areas might be optimal for the Foundation?
IG: Paul Brest can speak more knowledgably and eloquently than I on this subject, but I believe the idea is to make an impact in the areas in which we are concentrating. We are in the field of dispute resolution, for example, just to take one. We are trying to be a force there and really make a difference. I think those seven areas or so that have grown over a period of years. There were fewer areas in the beginning. They get modified from time to time and we analyze them. In the past year, there has been an internal analysis that takes a look at this areas and our effectiveness in them and attempts to be sure that we are able to make an impact in what we are doing. So as a Foundation, we are generally not in favor of the grants in blow, if you will – of spending a small amount in a many different areas. We are tending to concentrate more. Seven areas is reasonably concentrated for a Foundation of that size. This means we are giving away tens of millions of dollars every year in each of those seven areas.
The Reporter: Federal law requires private foundations to pay out 5% of their assets every year, and this is roughly the standard in the philanthropic world. Most foundations choose to award about 5% of their assets each year. However, there a few notable exceptions to that standard. Has raising the amount of money paid out annually been considered as an option in the planning of the Foundation?
IG: Not as a policy, I don’t believe. The 5% is more a guideline that we live by. For example, the $400 million gift to Stanford may – depending on how it is paid out – cause us to exceed that. And that 5 years (the expected duration for the Stanford grant) is a running average. There is a rather involved calculation as to how that is done, but generally we are trying to be at or to exceed slightly that 5% level. There has not been a push by anybody on the Board to my knowledge to dramatically exceed and go to 8 or 10% or something else. However, we are not bound by the 5%. If there is something worthy, we are willing to support it.
The Reporter: Some Foundations explicitly support specific programs and projects, and do not want to support bureaucracy and overhead expenses with their grants. The Hewlett Foundation, on the other hand, seems much more willing to support institutions, and help build them by providing support for their administrative costs. This certainly seems to be the case with the Stanford gift, which leaves most of the discretion in its allocation to the university. Was this something the Bill Hewlett himself thought was important – perhaps from his years in building HP? Or does it arise from something else?
IG: Well, Bill Hewlett had a special place in his heart for Stanford University. That was evidenced not only by his gifts, but by his actions over the years. And a lot of this preceded my relationship with him, but I know that he was close to the presidents of the university over the years. I know that he knew a number of faculty members well. In fact, one of them Herant Katchadourian is a Trustee of the Hewlett Foundation and has been for many years. So Bill’s affection for Stanford was almost boundless and therefore it doesn’t surprise me that his Foundation chooses to support the institution rather than programs within the institution.
The Reporter: How much influence do you think Bill Hewlett’s business experiences have had on the Foundation? What we are interested to know is how much his experience in starting a company from scratch in a garage and building it into one of the leading corporations in the world affects the Foundation’s outlook and obligations.
IG: Well I think it’s emboldened the Trustees of the Foundation in the sense that they don’t feel constrained in their thinking. They are willing to be innovative and take leadership roles. They are willing to take risks. It is often discussed at board meetings that we are taking risks here – and that is consistent with an entrepreneurial point of view. I think that trust was an important part of Bill Hewlett’s credo and it is certainly an important part of the Foundation. We invest in people and then trust their ability to go forward on their stated undertakings. So I certainly think there are a number of not only values but operating principles which have made their way into the Foundation and I think it’s all very healthy.
The Reporter: You mentioned the word risk. Could you expand a bit more on what you mean by risk in the grant-making process? Do you mean risk of failure? Or political risk? Or something else?
IG: We are willing to make grants that look promising but may not work out. We are not making just safe grants to established organizations. We are certainly willing to take risks of failure in return for the potential reward. People will come in with great promise and if they are well-vetted, and if the project appears to be well thought out, we will be an early funder, an early adopter if you want to use that phrase. And of course, in that way, the Foundation takes a start-up risk – to take another entrepreneurial term. Some grantors are not willing to do that. They are willing to provide support only to established entities and that has not been the posture of the Hewlett Foundation.
The Reporter: In recent years, some foundations have provided grants to for-profit businesses that have a social mission that is in some way connected to their own. These grants are called program-related investments. When the business venture succeeds, the grants are treated in the same way a foundation’s endowment portfolio is treated. If the business venture fails, the grants are treated as charitable gifts. Has the Hewlett Foundation considered funding any for-profit businesses?
IG: No. The Foundation has not done that to the best of my knowledge. The Foundation tries to make sound investment decisions and not mix or mingle them with a sort of a non-profit flavor or put another way because something is a quasi-for-profit or somewhere in the blurred section between for-profit and non-profit does not make it more attractive as an investment entity to the Hewlett Foundation Investment Committee. They are try to invest wisely and get reasonable returns given the risk they are willing to run for the corpus of the foundation and then they’ll do their good works on the other side of the house. Now the two sides of the house – and this goes without saying I am sure but just for emphasis – the two sides of the house work closely with each other because the funds need to be made available by the investment side in a timely side to meet the timely fashion to meet the obligations of the grant-making side. So it’s not like there is any kind of wall between them or anything.
The Reporter: One final question because I know we are short on time. Could you talk to us a bit about the sorts of long-term planning that took place before Bill Hewlett’s death in anticipation of the tremendous amount of new capital that would eventually reach the Foundation?
IG: Well a tremendous amount did. There was planning that began several years ago when we could foresee with Bill in declining health that we needed to plan ahead – along several different dimensions: grant-making, investment management, staff size, and housing. At the moment, we are in leased space in Middlefield Road in leased space, but there is a new building that is under construction which will be ready for occupancy in about 6 months. It is at the intersection of Sand Hill Road and Alpine Road. That’s a 40,000 square foot building that the Hewlett Foundation planned and got approval for, and leased the land from Stanford for in anticipation of the tremendous increase in size. Where you have a staff now of about 30, we are expecting the staff to grow to substantially more than that – more than double that amount, and we need a place to house them. And it was with the anticipation of the flow of new capital that Laurie Hoagland was brought on to manage the investment. It was also coincident with the pending retirement of the former Chief Investment Officer Bill Nichols. And on the grant-making side as well where this entire re-evaluation that has been undertaken by Paul Brest that has been looking at the effectiveness of the different areas and decide whether any modification can be made. And that study is in process now.
The Reporter: Well, we thank you for your time. We appreciate it.
IG: My pleasure. I was happy to do it.
The Reporter: Thank you for agreeing to speak with us about your work with the William and Flora Hewlett Foundation. We’re interested in learning more about the virtuous circle of entrepreneurship and philanthropy in which an entrepreneur’s creativity, skills, and determination lead to a successful business venture – and how that business, in turn, generates surplus wealth that benefits the firm’s employees, shareholders, and investors – and how that surplus wealth is often then cycled into foundations, educational institutions, and charitable organizations, which has the effect of strengthening the environment that spawns entreprenuership. And then the cycle begins again. So to get us started, could you tell us a bit about your involvement with the Hewlett Foundation and how you came to join its Board?
IG: I think I joined 4 or 5 years ago. I don’t remember the exact date. It may have been the fall of ’96, although it might also have been ’97. I joined at the suggestion of Bill Hewlett. He and I were neighbors, and my wife and I actually bought the lot on which we subsequently built our house from Bill Hewlett. It was owned by him, and that is how we became acquainted in the mid-80s when we first came to Stanford. He and I became friends. He was friends with many, many people. So I was one of his later friends in his life. Then in the mid-90s, he asked me if I would join the Foundation Board, which I did. So that is how that arose.
The Reporter: Did you have much experience working with either non-profits or foundations before joining the Hewlett Foundation Board?
IG: I had never been on a foundation board, but I had been involved in numerous non-profits. Back in Boston, I was head of the New England Eye Bank. I was the head of a large teaching hospital in the Boston area. I was Vice-Chairman of the Massachusetts Board of Higher Education. I was also involved with the Children’s Hospital in Boston, and numerous others. In this area, I was head of the Menlo School and College Board. So I have always been involved in non-profits in addition to my business activity and teaching activity. But I had never been involved in a private grant-making foundation, per se.
The Reporter: What sorts of expectations did you have going in, and what did you believe would be expected of you in terms of commitment, time, and expertise?
IG: The Foundation has quarterly meetings which last a day and a half – Sunday afternoon, sometimes Sunday evening, and most of the day on Monday. Four times a year. I think the Board’s expectation was probably that I had a business perspective having been in business a long time, and having been an entrepreneur myself. They thought that I might have the business management operating perspective for their Board I suspect. I do not know that anyone really analyzed it, but if they had looked at my background, that is what they would have seen. I was welcomed as was everybody else who was appointed to the Board because I was Bill’s nominee and it was really Bill’s board until shortly thereafter he became sick and fell into declining health and took a less active role. And in the last three years or so, no role at all because of his incapacitation.
The Reporter: Philanthropy lacks the clean “bottom-line” metrics that dominate business investments and returns. How challenging have you found it to establish metrics and benchmarks for success in evaluating grants?
IG: Well, I think these are issues that the entire non-profit world is grappling with, which is measurement of success. That world is looking for something better than the goals set by the grantee and agreed to by the grantor. Those have traditionally been the metrics. The reasoning has been that with this grant we expect to be able to do this, this, and this. We are going to hire this person or we are going to enter this area or institute this program or whatever it is we are going to do. And then, after the money is granted, there are interim reports and then there is a final report if you will. And whether it is done or not is then documented if you will. But somehow a lot of people feel that falls short and I think the whole question of how a granting entity decides what grants to make is something that is being examined not only by the Hewlett Foundation and Paul Brest but also by other thoughtful elements of the grant-making world. They are trying like to figure out whether something more rigorous than grantee objectives that get approved by the grantor can be implemented and instituted. They are trying to figure out whether there is a better way or an additional way to look at effectiveness.
The Reporter: One issue that is often overlooked in philanthropy is donor intent. Many foundations are given very broad mandates and lose sight of their benefactor’s vision and values. The Hewlett Foundation would appear to have been fortunate in this regard – Bill Hewlett led the foundation for over three decades before his death. Many other foundations are created only after the benefactor dies – as part of some estate plan. In your years with the Hewlett Foundation, do you or the other board members ask questions like, “Is this something Bill Hewlett would want to support?” or are his values considered in some other way?
IG: Bill Hewlett’s management style was always to surround himself with good people and give those people broad decision-making power. And I that I believe was true when he assembled the Trustees of this Foundation. Three of his children are on the 11 or 12 person Board. And of course, indirectly his thinking comes through him. But I don’t believe I have ever heard in four of five years of meetings somebody say ‘Bill would have wanted us to do this or to do that or to act in this way.’ I think his values permeate the organization. His integrity. His social conscience. Many of his other great qualities. But in terms of decision-making, I think people are just trying to make the best decisions at the time and not thinking would Bill have wanted this or not.
The Reporter: In many of the tributes to Bill Hewlett immediately after his death in January noted the tremendous infusion of funds that was headed to the Hewlett Foundation. At the time, it was estimated that the infusion would make the Hewlett Foundation the second largest foundation in the Bay Area – second to the Packard Foundation which has $12 billion in assets. But I believe a lot of that wealth was tied up in Hewlett Packard stock. HP stock has been hit hard over the past six months. Did the decline stock price affect the amount of money available to the Foundation? Or was it diversified soon after Bill Hewlett’s death?
IG: Quite a lot of that wealth was in HP stock. I spoke with Laurie Hoagland, the Chief Investment Officer of the Foundation, the other day, and he said that the pro forma assets of the foundation – assuming that everything that is going to pour over from Bill Hewlett’s estate to the Foundation – had diminished from about $8-plus billion to about $5 billion, so there has been a very substantial diminution of value.
The Reporter: When the Hewlett Foundation receives an infusion of HP stock on the level of a few billion dollars, and then diversifies that infusion, does the Foundation communicate its plans to anyone in advance? to HP? or to the capital markets in some public way so that it is known why the stock is being sold?
IG: Both the directors and management of the Hewlett Packard Company and the Trustees of the Hewlett Foundation have separate fiduciary responsibilities so that we do not coordinate with them. There is a specific Hewlett Packard Stock Committee of the Hewlett Foundation which makes all the decisions about selling HP stock and they look at only the fiduciary responsibility of themselves as the investment committee and some of the Trustees of the Hewlett Foundation. Obviously they don’t want to be disruptive to the marketplace in general, but they are not talking with Carly Fiorina and saying, ‘Is it OK if we sell stock?’ because that would be inconsistent with their fiduciary responsibilities. Now of course we want to have an orderly market and want to do it in a responsible way.
Now, it is generally known that the policies of the Hewlett Foundation have been to balance their assets in an orderly fashion. And balance their assets means that you are going to be selling Hewlett Packard stock from time to time, and they are certainly aware of that. But the exact amounts and timing is not something that is – to my knowledge – discussed in advance with them.
The Reporter: The Hewlett Foundation annual report lists 7 different program areas of focus – conflict resolution, education, environment, family and community development, performing arts, population, and U-Latin American relations. From a management standpoint, given the Foundation’s assets, do you have a sense of how many areas might be optimal for the Foundation?
IG: Paul Brest can speak more knowledgably and eloquently than I on this subject, but I believe the idea is to make an impact in the areas in which we are concentrating. We are in the field of dispute resolution, for example, just to take one. We are trying to be a force there and really make a difference. I think those seven areas or so that have grown over a period of years. There were fewer areas in the beginning. They get modified from time to time and we analyze them. In the past year, there has been an internal analysis that takes a look at this areas and our effectiveness in them and attempts to be sure that we are able to make an impact in what we are doing. So as a Foundation, we are generally not in favor of the grants in blow, if you will – of spending a small amount in a many different areas. We are tending to concentrate more. Seven areas is reasonably concentrated for a Foundation of that size. This means we are giving away tens of millions of dollars every year in each of those seven areas.
The Reporter: Federal law requires private foundations to pay out 5% of their assets every year, and this is roughly the standard in the philanthropic world. Most foundations choose to award about 5% of their assets each year. However, there a few notable exceptions to that standard. Has raising the amount of money paid out annually been considered as an option in the planning of the Foundation?
IG: Not as a policy, I don’t believe. The 5% is more a guideline that we live by. For example, the $400 million gift to Stanford may – depending on how it is paid out – cause us to exceed that. And that 5 years (the expected duration for the Stanford grant) is a running average. There is a rather involved calculation as to how that is done, but generally we are trying to be at or to exceed slightly that 5% level. There has not been a push by anybody on the Board to my knowledge to dramatically exceed and go to 8 or 10% or something else. However, we are not bound by the 5%. If there is something worthy, we are willing to support it.
The Reporter: Some Foundations explicitly support specific programs and projects, and do not want to support bureaucracy and overhead expenses with their grants. The Hewlett Foundation, on the other hand, seems much more willing to support institutions, and help build them by providing support for their administrative costs. This certainly seems to be the case with the Stanford gift, which leaves most of the discretion in its allocation to the university. Was this something the Bill Hewlett himself thought was important – perhaps from his years in building HP? Or does it arise from something else?
IG: Well, Bill Hewlett had a special place in his heart for Stanford University. That was evidenced not only by his gifts, but by his actions over the years. And a lot of this preceded my relationship with him, but I know that he was close to the presidents of the university over the years. I know that he knew a number of faculty members well. In fact, one of them Herant Katchadourian is a Trustee of the Hewlett Foundation and has been for many years. So Bill’s affection for Stanford was almost boundless and therefore it doesn’t surprise me that his Foundation chooses to support the institution rather than programs within the institution.
The Reporter: How much influence do you think Bill Hewlett’s business experiences have had on the Foundation? What we are interested to know is how much his experience in starting a company from scratch in a garage and building it into one of the leading corporations in the world affects the Foundation’s outlook and obligations.
IG: Well I think it’s emboldened the Trustees of the Foundation in the sense that they don’t feel constrained in their thinking. They are willing to be innovative and take leadership roles. They are willing to take risks. It is often discussed at board meetings that we are taking risks here – and that is consistent with an entrepreneurial point of view. I think that trust was an important part of Bill Hewlett’s credo and it is certainly an important part of the Foundation. We invest in people and then trust their ability to go forward on their stated undertakings. So I certainly think there are a number of not only values but operating principles which have made their way into the Foundation and I think it’s all very healthy.
The Reporter: You mentioned the word risk. Could you expand a bit more on what you mean by risk in the grant-making process? Do you mean risk of failure? Or political risk? Or something else?
IG: We are willing to make grants that look promising but may not work out. We are not making just safe grants to established organizations. We are certainly willing to take risks of failure in return for the potential reward. People will come in with great promise and if they are well-vetted, and if the project appears to be well thought out, we will be an early funder, an early adopter if you want to use that phrase. And of course, in that way, the Foundation takes a start-up risk – to take another entrepreneurial term. Some grantors are not willing to do that. They are willing to provide support only to established entities and that has not been the posture of the Hewlett Foundation.
The Reporter: In recent years, some foundations have provided grants to for-profit businesses that have a social mission that is in some way connected to their own. These grants are called program-related investments. When the business venture succeeds, the grants are treated in the same way a foundation’s endowment portfolio is treated. If the business venture fails, the grants are treated as charitable gifts. Has the Hewlett Foundation considered funding any for-profit businesses?
IG: No. The Foundation has not done that to the best of my knowledge. The Foundation tries to make sound investment decisions and not mix or mingle them with a sort of a non-profit flavor or put another way because something is a quasi-for-profit or somewhere in the blurred section between for-profit and non-profit does not make it more attractive as an investment entity to the Hewlett Foundation Investment Committee. They are try to invest wisely and get reasonable returns given the risk they are willing to run for the corpus of the foundation and then they’ll do their good works on the other side of the house. Now the two sides of the house – and this goes without saying I am sure but just for emphasis – the two sides of the house work closely with each other because the funds need to be made available by the investment side in a timely side to meet the timely fashion to meet the obligations of the grant-making side. So it’s not like there is any kind of wall between them or anything.
The Reporter: One final question because I know we are short on time. Could you talk to us a bit about the sorts of long-term planning that took place before Bill Hewlett’s death in anticipation of the tremendous amount of new capital that would eventually reach the Foundation?
IG: Well a tremendous amount did. There was planning that began several years ago when we could foresee with Bill in declining health that we needed to plan ahead – along several different dimensions: grant-making, investment management, staff size, and housing. At the moment, we are in leased space in Middlefield Road in leased space, but there is a new building that is under construction which will be ready for occupancy in about 6 months. It is at the intersection of Sand Hill Road and Alpine Road. That’s a 40,000 square foot building that the Hewlett Foundation planned and got approval for, and leased the land from Stanford for in anticipation of the tremendous increase in size. Where you have a staff now of about 30, we are expecting the staff to grow to substantially more than that – more than double that amount, and we need a place to house them. And it was with the anticipation of the flow of new capital that Laurie Hoagland was brought on to manage the investment. It was also coincident with the pending retirement of the former Chief Investment Officer Bill Nichols. And on the grant-making side as well where this entire re-evaluation that has been undertaken by Paul Brest that has been looking at the effectiveness of the different areas and decide whether any modification can be made. And that study is in process now.
The Reporter: Well, we thank you for your time. We appreciate it.
IG: My pleasure. I was happy to do it.