We here at IP frequently come across donors who, after years of substantial public philanthropy, ramp up their mega-giving to an even more rarefied level.
Such was the case last September, when Andrew and Peggy Cherng, the founders and owners of the Chinese fast food chain Panda Express, announced a $100 million gift to the national comprehensive cancer center City of Hope. The funding establishes what City of Hope called “a first-of-its-kind national integrative oncology program that will bring together Eastern and Western treatment methods.”
The Cherngs have been prolific philanthropists for years — and have made some pretty hefty commitments. In 2017, they gave $30 million to Caltech to name and endow the Andrew and Peggy Cherng Department of Medical Engineering, prompting IP’s Tate Williams to note that “level of gift is new ground for them.” Five years later, they made a $25 million gift to Los Angeles’ Huntington Hospital to fund the hospital’s surgical program and rename a building the Cherng Family West Tower.
Given this backstory, the couple’s $100 million commitment to City of Hope represented a mostly unsurprising but still noteworthy step up in the Cherngs’ public giving. Mega gifts tend to presage more mega gifts, and it’s safe to say we can expect more big-ticket philanthropy from the billionaire couple, who, as the cofounders and co-CEOs of Panda Express’ holding company, the Panda Restaurant Group, also oversee the group’s charitable arm, the Panda Cares Foundation.
Here’s an overview of how Andrew and Peggy Cherng conduct their giving, which typically focuses on the areas of education, youth development and health.
It all started in Glendale
Andrew Cherng was born in China and raised in Taiwan and Japan before moving to the United States to attend Baker University in Kansas. It was there that he met Peggy Tsiang Cherng, who had emigrated from Hong Kong. The pair went on to receive advanced degrees at the University of Missouri.
In 1973, Andrew started a Chinese restaurant with his father in Pasadena, California. Peggy, who was a full-time engineer at the time, greeted restaurant customers on nights and weekends. Ten years later, the Cherngs opened their first Panda Express in the nearby city of Glendale.
The chain now has over 2,400 locations and annual sales of $5 billion. “The goal,” wrote Forbes’ Chase Peterson-Withorn in a 2023 profile on Peggy, “is to continue to open around 100 new restaurants a year in America, doubling revenue to $10 billion by 2028.” Peterson-Withorn pegged her net worth at $3.1 billion, while Andrew “is worth an additional $3.1 billion.”
Forbes assigned the couple, both of whom are in their late 70s, a philanthropy score of 2, meaning they have given less than 5% of their fortune to charity.
Higher ed and hospitals are big priorities
The Cherngs moved to Las Vegas in 2014. Over time, they got to know Stowe Shoemaker, the dean of the University of Nevada Las Vegas’ Hospitality College. Andrew began serving on the Hospitality College’s Dean’s Global Advisory Board. In 2020, the Cherngs gave the college $5 million to support current programs and build out what was, in the spirit of the Panda Express operating model, the country’s first academic program in “fast casual” restaurant management.
“We didn’t have a lot growing up, so we are very blessed to have what we have today,” Andrew said at the time. “Giving back and helping others are our way of paying it forward — it’s simply a question of why not give back when we can?”
The foundation’s $100 million commitment to City of Hope has a more protracted backstory. The Los Angeles Times’ Laurence Darmiento reported that the hospital treated Andrew’s father for lung cancer 40 years ago. In addition, proceeds generated from Panda Cares’ annual golf tournament have flowed to the center since 2007.
More recently, in March, Pasadena’s Families Forward Learning Center announced a $200,000 gift from the Panda Charitable Family Foundation. The center’s press release cited one of the Cherngs’ three daughters, Michelle Cherng Lee, as the foundation’s “family advisor,” suggesting she is a key decision-maker who may play a bigger role in the family’s future giving.
The press release also listed a handful of the foundation’s grantees, including City of Hope, Caltech, the University of Nevada Las Vegas, the Boston-based Brigham and Women’s Hospital, and the Cherngs’ alma mater, the University of Missouri, which announced in July that it was the recipient of a $5 million commitment to support scholarships and programming at its Honors College. The family foundation’s Form 990s, available on the IRS website and ProPublica, do not list grantees for the fiscal years ending December 2018 to 2022.
Paying as they go
The Panda Charitable Family Foundation is based in the Panda Restaurant Group’s home city of Rosemead, California. Its Form 990s lists Andrew and Peggy as its two trustees from the fiscal years ending December 2018 to 2022. During this period, the Cherngs contributed $53 million to the foundation and disbursed $42 million. For the most recently available year, 2022, the foundation moved $10 million out the door.
The foundation’s five-year average payout ratio — the amount of qualifying distributions divided by the value of noncharitable-use assets — clocks in at 16%, above and beyond the 5% mandated by the IRS. Of the $44 million the foundation made in qualifying distributions from 2018 to 2022, 95% was grants, underscoring how foundations run by living donors who made their fortunes by squeezing out operational efficiencies tend to run incredibly lean operations.
The foundation’s end-of-year net assets held steady during this five-year period, bottoming out at $39 million in 2019 and peaking at $48 million in 2022.
Add it all up, and one can classify the foundation as the kind of pay-as-you-go grantmaking operation preferred by many living megadonors. Under this model, money comes, money goes out, and the endowment doesn’t grow to astronomical proportions. That said, the Cherngs don’t appear comfortable cutting it too close, as they’ve kept an average of $43 million in net assets in the bank over the last five years.
They oversee a large corporate giving vehicle
The Panda Restaurant Group’s charitable arm, the Panda Cares Foundation, has raised over $375 million since its launch in 1999. Although it’s a separate entity from the Panda Charitable Family Foundation, the Panda Cares Foundation lists Peggy as president, treasurer and director, and Andrew as director. The foundation’s mission “is serving underserved children in health and education,” Peggy told Forbes’ Jennifer Wang in 2018. “The other [purpose] is to inspire and grow our associates in giving.”
For the fiscal year ending December 2022, the Las Vegas-based foundation received $47 million in contributions and disbursed $47 million in grants. (Now that’s what I’d call “pay as you go” grantmaking.) It had $37 million in net assets at the end of the year.
Unlike the Cherngs’ family foundation, the Panda Cares Foundation has a website, which includes an array of useful data points, such as the fact the foundation has given over $172 million to Children’s Miracle Network Hospitals since 2003 and committed over $148 million toward education initiatives focused on areas like student academic success and colleague access since 2008. Panda Cares also runs an in-store donation program, supporting organizations serving the health and education needs of underserved youth.
For further reading, check out my colleague Connie Matthiessen’s 2022 conversation with Panda Cares Director Tina Hsing.
