Philanthropy - - Direct from Dell

By bringing business principles to philanthropy, Michael and Susan Dell are improving the odds for children in need.

When Michael and Susan Dell became parents, they did a lot more than make room in their house for their own children. They made room in their hearts for underprivileged children they might never meet. “Being a parent of four children and seeing many who are not so fortunate, we knew this was a great area to focus on,” says Michael Dell, the 45-year-old founder of computer giant Dell Inc. “When you become a parent, you are suddenly aware of how important good health and quality education are for the well-being and success of children.”

The Dells’ philanthropy is a lesson in hope economics. Through an endowment of about $1 billion, the Michael & Susan Dell Foundation helps underprivileged urban children become educated, healthy and successful. “Susan and I wanted to extend the charitable giving we had done in the past, so the foundation was a way to do that in a much more focused way and at larger scale,” Dell says.

Established in 1999, the foundation’s overarching goal, as Michael Dell sees it, is having “the greatest possible impact on children’s lives. That means focusing on the opportunities that have the greatest potential to directly and measurably transform the lives of children living in urban poverty.”

“Michael and I had already been philanthropic around Austin,” says Susan Dell of their Texas hometown. “We had to figure out how to make a bigger impact. We didn’t want it to be scattered…. We think education and health are the most important things. Kids must be healthy to learn, and kids who can’t learn won’t be successful.”

As goal-directed achievers, the Dells bring valuable skills and personality traits to assisting children in the United States, India and South Africa. They provide microfinance and scholarships, combat child abuse, and support medical research, health insurance, physical fitness, child care and education initiatives.

“Focus is very important,” says Michael Dell, who draws on his experiences leading Dell Inc. in his foundation work. “Patience is also important because measuring progress takes time—sometimes years—to show the full results and impact. We are trying to drive systemic change in areas where there are big problems with big challenges.”

Applying Entrepreneurial Savvy
It was Michael Dell’s impatience, rather than patience, that contributed to his entrepreneurial drive from an early age, as well as a keen interest in finding ways to work smarter. During his early teens, he organized a sale of collectible stamps that earned him $2,000. To increase his success rate in selling newspaper subscriptions, Dell researched lists of marriage licenses and home mortgages, then targeted newlyweds and new home owners.

At 18, personal computers distracted Dell from his University of Texas coursework, and his dad challenged him to get his priorities straight. “What do you want to do with your life?” his dad asked. “I want to compete with IBM,” the freshman replied.

Although Dad wasn’t amused, the statement proved prescient: Michael Dell dropped out and started a direct-to-consumer sales model that leapfrogged competitors as it rose to the top tier of personal computer companies. He led the company as founder and CEO until stepping down as CEO in 2004, while continuing to serve as chairman of the board; he resumed the role of CEO in January 2007.

Throughout his tenure, Dell has developed strategies and insights that he shares in his book Direct from Dell : Strategies That Revolutionized an Industry. Dell’s gift for insightful, innovative thinking is best illustrated by his direct sales model, where Dell Inc. kept minimal inventory, bypassed the middleman and provided on-site customer service. But other examples abound. Illustrating his belief in focusing on customers, not the competition, in 1989 he scuttled the company’s ambitious Olympic architecture, beloved by company developers, in favor of less dazzling product lines his customers found relevant. In Direct from Dell, he encourages other business owners to meet with customers and hear what they want, letting them help set the agenda. Then give customers what they need rather than force-feed them what you happened to create.

Dell also believes in studying the obvious for nonobvious solutions. He constantly questions the status quo as a route to improvement. When the company was experiencing what he calls “hyper-growth” during the early 1990s, going in too many directions at the same time, he applied the brakes and righted the struggling company, proving his theory that resting on your laurels will make you weak. But he hoped never again to be named “Turnaround CEO of the Year,” as he was for 1993.

A High-Energy Couple

Janet Mountain, executive director of the Michael & Susan Dell Foundation, describes the Dells as well-matched. After meeting on a blind date arranged by friends in 1988, Michael and Susan married in 1989. “They’re incredibly focused people— high-energy people—who have the ability to jump in and engage on an idea or issue,” Mountain says.

Susan Dell hones her determined instincts by competing—and finishing well—in marathons, triathlons and cycling races. “I always believe that anything I set my mind to is possible. I don’t give up,” she says. Her résumé includes having her own fashion labels, working as a lease agent for Trammell Crow Co.’s industrial properties in Austin, and doing the interior design for Dell Inc.

More recently, she narrated the book Be Well: Messages from Moms on Living Healthier Lives, with some 625,000 copies given away by the foundation. Susan Dell chose the mothers featured in the book for bettering their families’ lives through nutrition and exercise. The mothers, whose stories and tips are available as a digital download at bewellbook.org, represent a diverse socioeconomic group.

“Susan was really moved by the mothers she chose for the Be Well book,” says Megan Matthews, director of communications for the foundation, who remembers one incident in particular. “She and Kira, her eldest daughter, were meeting with Emilia, a mother in the book, and her children. On top of being incredibly shy, Emilia was very nervous to meet Susan. Susan took her hand, looked her in the eye and said, ‘There is nothing to be nervous about. We are both mamas. That is what we will always have in common.’ Emilia visibly relaxed. Susan just has that effect on people.”

In ways the Dells are different, they’re complementary, Mountain says. “Michael Dell is all about how we are making a program more efficient, better, faster, cheaper—to scale it and make it systemic.” Those objectives are a clear extension of his entrepreneurship, building a company from dorm-room dabbling into a multibilliondollar operation in only about a decade.

And Susan Dell, who studied childhood education at Arizona State University and taught Sunday school in her early teens, “keeps us focused on how [a program] helps the child on the ground today,” Mountain says.

Reaching Lofty Goals
Those personal leadership styles enable the foundation to be a major player, rather than a dabbler in every new initiative, and to tackle challenges that might prove too onerous for others.

The foundation did all of the early work slogging through information on large urban school districts and was the first to help those districts create and sustain academic excellence. “We have invested more than $120 million over the last five years in big urban districts, such as New York, Chicago, Prince George’s County, Oakland, Denver, Dallas, Houston [and] Charlotte- Mecklenburg to transform their systems,” Mountain says. “We did this because we believe it’s part of ‘root cause,’ and working on ‘symptoms’ instead of ‘root cause’ would never result in measurable and scalable success in urban school excellence.”

The Dells personally approve every grant by their foundation. “You think about all the potential and all the problems that could benefit from some kind of help,” Michael Dell says, “and it’s a pretty massive list. So you’ve got to narrow it down.”

Just as he does with his company, Michael Dell endorses “data driven analytical decision-making and measurable results. We fundamentally believe that everything can be measured in some way, shape or form. We have always required that our grantee partners show their progress, and we are always willing to jump in and work with them on how that progress might best be measured. And it’s not just at the end of a program but at steps all along the way.

“It’s that kind of data that tells you what’s working and what’s not working. We seek grantees that have an eye toward strong results so we all work toward the same goals,” he says. Mountain says those goals are so lofty that some people would call them unreachable. “We have a graduation rate goal of 85 percent in our Dell Scholars Program versus the current national rate of 17 percent for the same student demographic,” she says.

Hands-On Leadership
Sharing foundation leadership equally, the Dells are involved throughout the grant period, monitoring progress, examining issues and deploying resources creatively—sometimes assigning a fulltime employee to provide regular attention, other times having someone visit the program monthly.

Michael Dell examines business and philanthropic challenges from atypical angles. “Sometimes simple solutions to big problems might be overlooked because they seem simple or obvious,” he says. “There is always the chance to refine something, to eliminate steps.”

The hands-on approach is another direct-from-Dell principle. The company has about 2 billion conversations a year with its customers online, by telephone and in face-to-face interactions. Michael & Susan Dell Foundation staff members also go to the front lines, doing volunteer work with grantees and their clients. The Dells—often accompanied by their teenage children—visit programs on-site, too.

Last year, the entire family visited Galli Galli Sim Sim in India, the Indian implementation of Sesame Street that the Dell family foundation funds. The children also attend foundation board meetings and discuss the merits of grant requests with their parents. Kira, the Dells’ eldest daughter, interned last summer with the foundation and worked with the Dell Scholars Program.

“For us, giving is more than a check. We like to be involved with our grantees at many levels,” Michael Dell says. “I’m an optimist and believe there is always an opportunity to make a difference in the world.”

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