July 25, 2018; The Atlantic
Alana Semuels wrote last May for the Atlantic about donor-advised-funds siphoning Silicon Valley philanthropy away from local community-based organizations that are struggling to survive. Semuels updates this theme of Silicon Valley’s abundance paradox (90 percent of the philanthropic dollars are leaving the region) here.
The Atlantic article reports on how Silicon Valley nonprofits are trying to woo wealthy residents who have a pious disdain for traditional philanthropy (Bill Gates is old money by tech standards). Semuels, as did NPQ, considers a study produced by the consulting firm Open Impact, “The Giving Code: Silicon Valley Nonprofits and Philanthropy.”
The study essentially observes that local nonprofits and Silicon Valley’s most wealthy residents too often speak different languages and live in different worlds. Silicon Valley’s new philanthropists want their giving to produce measurable outcomes that “disrupt” poverty. They focus on scale while ignoring local organizations serving the poor. Too many prefer “effective altruism” and distrust the nonprofit sector. They see poverty, disease, and inequality as problems to be solved by innovation, not a donation. Zuckerberg and Chan’s grandiose pledge to stamp out all disease is just one example of such exalted thinking.
Most local nonprofits apparently do not understand the implicit “giving code” embodied by new high-tech donors. Likewise, many of these donors do not take the time or have the interest to understand local needs. Most of the nonprofit leaders do not move in the same social circles as the elite wealthy. They speak in moral language that emphasizes social responsibility rather than the transactional language of business and capitalism, and this gap in understanding results in nonprofit leaders stereotyped as not knowing how to think strategically. The David and Lucile Packard Foundation (the sponsor of the “Giving Code” study) and the Heising-Simons Foundation awarded 20 Giving Code Experimentation and Learning Grants to Silicon Valley nonprofits to help them improve their fundraising.
Semuels reports on the success the Boys & Girls Clubs of the Peninsula, which serves Silicon Valley, is having in breaking the “giving code” by deploying such time-tested tactics as introducing STEM education to its summer programming and producing an annual report they call their “Report to Stakeholders.”
And to really bring the money rolling in, he launched a “Shark Tank” event, in which “entrepreneurs”—employees and students—pitch wealthy Silicon Valley donors on certain programs, outlining just how much money they need and what “equity” the donors will receive on those programs. One presentation pitched the “sharks” a “unique and innovative cross-sector partnership”—a summer learning program—and talked about the program’s “marginal costs,” assuring potential donors that BGCP’s cost per student was lower than that of competing programs. The approach has been remarkably effective in bringing in money: Last year, the organization raised $2.7 million in 45 minutes from donors including George Roberts, the billionaire founder of investment firm Kohlberg Kravis Roberts & Co., who lives in nearby Atherton.
Semuels goes on to share how other local nonprofits are trying to pivot. Again, each example reveals nothing new to an NPQ reader. For example, Child Advocates of Silicon Valley offers a virtual-reality experience to help donors better understand the life of a foster kid. They are sharing metrics that show impact and they inform “potential donors that money invested in Child Advocates can help save public money in the long run.”
That Semuels does not even mention the very institution by definition established to support local nonprofits, the beleaguered Silicon Valley Community Foundation, speaks to the heart of the disconnect between Silicon Valley’s wealthy and the needs of the community. It reveals the moral component of Silicon Valley’s raison d’être as a crude afterthought, a vessel that provides cover for how the self-avowed world-changing sausage actually gets made.
Semuels concludes her article by asking a few questions that NPQ might ask, but she concludes with a chilling and unacceptable concession.
As nonprofits work to rethink how they pitch donors at the same time they’re serving greater need, some leaders told me that they sometimes wondered whether this was “fair,” whether nonprofits should have to change how they work to get money from the millionaires and billionaires in their backyards. A few leaders suggested that perhaps it’s the donors who should be changing their priorities, rather than expecting that cash-strapped nonprofits know how to both serve low-income customers and market themselves as an entrepreneur would—though they did not want to be quoted saying that, because they need more money. And anyway, it’s a moot question; in the end, nonprofits must do whatever the people with the money want.
Rather than launch a charm offensive upon the mushrooming fortunes of Silicon Valley, it may be time for the nonprofit sector to assert its moral authority. No one, no matter how much money is at stake, can be permitted to neutralize a charity’s by-laws or violate its mission.
As for Silicon Valley’s own moral authority, let’s consider the opinion of the creator of the World Wide Web itself, Tim Berners-Lee, who Darren Walker, president of the Ford Foundation, called “the Martin Luther King of our new digital world.” In a recent Vanity Fair article, Berners-Lee said that “the Web had failed instead of served humanity” and that it is increasingly producing “a large-scale emergent phenomenon which is anti-human.” We need to hear more from the likes of Berners-Lee rather than learning the latest tricks, the very lexicon, put forth by the “Giving Code” to chase after “Shark Tank” money.—Jim Schaffer