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The People's Institute was organized in 1904 to improve living conditions for the women and children in the northern end of Portland. The impetus for the Institute was a report by Valentine Prichard, supervisor of the public school kindergartens and principal of a training school for kindergarten teachers. This report, given in 1902 to Dr. Edgar P. Hill, pastor of the First Presbyterian Church, along with Caroline Ladd and her daughter Helen Ladd Corbett, described the deplorable conditions of the women and children in north Portland Unable to provide even the bare necessities for their children, single mothers and their offspring lived in dark, unkempt rooming houses and tenements. Children, surrounded by immorality, often turned to crime, growing up idle and becoming a menace to society. Miss Prichard and a staff of workers visited homes to establish the needs of the women and children and to decide what could be done to help them and to establish the aims of the organization.

The Ladd family donated land at Fourth and Burnside Streets to construct a building for the People's Institute. The first floor housed the Men's Resort, a mission that had already been established by the church, and the second floor housed services for women and children. Caroline Corbett was appointed to form a club to support the effort, and Valentine Prichard was pressed into service as the Institute's organizer. The first meeting was held 1904 November 11; Prichard was voted in as supervisor, officers were elected, and the People's Institute Settlement Work was established. Dr. Hill realizing that the work would need more than one church for support, opened membership to all women who would aid the organization financially or through service.

The aims of the People's Institute centered in four areas--social, educational and industrial, humanitarian, and civic activity. Three centers formed: at Fourth and Burnside (1904 - 1912), Albina, (1912 - 1918), and the South Portland Center at the Fourth Presbyterian Church (1912 - 1915). Each center offered the following services: a kindergarten, sewing school, cooking school, Little Housekeepers Class, Stereoptician Sunday School, gymnasium, lectures for adults, manual training, Girl's Club, Boy's Club, Boy's Brigade, Boy's Printing Club, music, Dramatic Club picture loan, library, free baths, Mother's Club, and the Free Employment Bureau for Women. They also organized and supervised Portland's first public playgrounds in 1906, which they turned over to the Park Board in 1909.

In 1906, after the San Francisco earthquake and fire, the Institute gave clothes, food and medical care to the refugees arriving in Portland. Many doctors and nurses provided free services during the crisis, and some expressed interest in continuing free health work, including Drs. Noble Wiley Jones, Edna Timms and Gertrude French. In addition, the Free Employment Bureau for Women found that many women were not fit for employment due to poor health. They tried to interest the city and county in medical aid to the indigent but were foiled in their efforts. In 1907 the Executive Board of the People's Institute decided that the best way to aid the poor was to help them to achieve health so that they could help themselves. Hence the Free Dispensary was formed with $30.00 provided by The Mother's Club and was held in the Boy's Club room at Fourth and Burnside. Drs. French, Timms and George Whiteside offered their services as the first attending physicians, while many others were willingly on call. The Visiting Nurse's Association joined the work as well. In the spring of 1909, Dr. Clarence J. McCusker made a report to the University of Oregon Medical School about free medical care being given at the dispensary. The faculty responded by offering to affiliate with the clinic, providing equipment and services to men, as well as to women and children. Mrs. Jacob Kamm donated $1000 for the project, and five more rooms were opened on the first floor of the Men's Resort. The Medical School moved the necessary equipment to the new location and supplied a salary of $25.00 per month for an attendant. They requested additional support from the Board of Regents of the University of Oregon, and supplemental funds were acquired by subscription from the Arlington Club of Portland. Later, appropriations from the city and county were provided to meet growing expenses.

George B. Storey, Earnest Tucker and Kenneth A. J. Mackenzie, later made chief of staff, were appointed and authorized as trustees to sit with representatives of the People's Institute, the Visiting Nurses Association and the Men's Resort. On January 10, 1910, the first joint meeting of the organization met, and fourteen physicians from the Medical School were assigned to staff the dispensary, now named the Portland Free Dispensary.

Between 1910 and 1913, the dispensary was not extensively used for teaching purposes. But in 1913 attendance became compulsory for students of the Medical School. The dispensary grew in size and in service as a teaching center with, according to Larsell and Prichard, Portland's finest and most capable physicians attending. It was moved to larger quarters on 4th and Jefferson Streets in 1916, leaving the Institute's other projects housed at Fourth and Burnside and at the Lower Albina location. By 1921, the dispensary was taken more under the auspices of the Medical School as an outpatient clinic. In 1923 a Free Baby Clinic was added and in 1926, under the direction of Drs. Noble Wiley Jones and T. Homer Coffen, administrators of the Department of Medicine at the University of Oregon Medical School, new specialty clinics were established at the dispensary: a cardiac clinic directed by T. Homer Coffen, an endocrine clinic run by Homer P. Rush, a diabetic clinic under the direction of J. R. Montague and Blair Holcomb and a tuberculosis clinic coordinated by Ralph and Ray Matson and Marr Bisaillon.

The dispensary quickly became overcrowded, and the location was extremely noisy, making examinations and accurate diagnoses difficult. But it was not until 1931, after 24 years, that a gift of $400,000 from the General Education Fund of New York made it possible to move the clinic to the Medical School campus on Marquam Hill. The money was given with the understanding that the Portland Free Dispensary would turn over its work and financial resources to the Medical School. The four story Outpatient Clinic was built, and the dispensary medical services were transferred to these new and modern facilities, providing better services to patients and instructional clinic opportunities for students.