A recent report on Silicon Valley philanthropy indicates that while the area’s new generation of tech millionaires is increasingly eager to invest in social change, Silicon Valley donors are not focusing much of their giving on their local community.
Silicon Valley entrepreneurs have by no means refrained from investing their money in philanthropic causes—from 2008 to 2013 their individual giving saw a 150% increase, from $1.9 billion to $4.8 billion. But despite these large increases in giving, nonprofits working in Silicon Valley are seeing little benefits. While local giving from Silicon Valley companies has doubled from $56 million in 2009 to $117 million in 2015, 77% of local nonprofits still report revenues under $1 million, and 30% are running deficits above the state and national average.
This is in part due to Silicon Valley’s tech boom—the cost of living in the area has risen to such a degree that 29.5% of its 2.6 million residents rely on either public or private assistance to meet their needs. According to the report, there has been a “sharp increase in the number of [formerly] middle-class families accessing services such as free healthcare, food banks, and shelters.” Locals are increasingly turning to nonprofits for assistance, and the organizations are struggling to meet the growing demands.
So why, in the words of the report, “are local community-based organizations struggling to meet demand in one of the wealthiest and most sophisticated regions in the country?” And “Why aren’t more Silicon Valley philanthropists directing their dollars toward local organizations and issues—as opposed to national or global causes?” The report states that “Some of these nonprofits have offices just blocks away from the region’s booming tech companies.” There must surely be something wrong if Silicon Valley philanthropists and Silicon Valley nonprofits are failing to come together to address the needs of their shared community.
As the report notes, one of the difficulties lies in Silicon Valley’s “giving code,” or its culture of giving. Silicon Valley’s donors seek to be not just philanthropists, but “effective philanthropists” who are “‘bigger, better, and faster’ in their giving than the philanthropists who came before.” They do not want “Band-Aid solutions” that provide temporary relief, but permanent structural change; “they aspire to get to root causes and solve social problems rather than just ameliorate them.” As a result, local programs that seek to help those in need with health care, food, and shelter are simply not as appealing to Silicon Valley donors as projects aiming to eliminate disease, hunger, and homelessness altogether.
Silicon Valley’s giving code also places an emphasis upon metrics and data-driven results. Many Silicon Valley donors believe that “their philanthropy can achieve more impact in emerging markets,” where their dollars are worth more. Becoming more “effective” or “strategic” often implies forgoing local concerns in favor of making investments that appear to have the greatest impact. This means that there is less money for charitable causes closer to home. Mark Zuckerberg, the Silicon Valley philanthropist par excellence, has set the tone by using his fortune to address large-scale, abstract, issues rather than deliberately focusing on the tangible needs of his local community.
In addition, Silicon Valley philanthropists are often “inherently skeptical” of nonprofits, since they “don’t have effective programs or lack clear strategies.” As a result, there exists a certain level of distrust and even miscommunication between Silicon Valley philanthropists, who employ a language of business and effectiveness, and nonprofits, which employ a language of moral responsibility.
In conclusion, the report proposes a few practical solutions that might bring Silicon Valley nonprofits and philanthropists into closer communication and collaboration: Let nonprofits learn a little bit about what the new generation of philanthropists seeks and throw Silicon Valley donors a bone by using some metrics; use a little bit of utilitarian reasoning and remind philanthropists that an investment in their community means an investment in the neighborhoods where their children and employees live.
We might also propose as a solution a renewed discussion on the goals of charity: to create bonds of love between people and close-knit, thriving communities. It would be a shame for Silicon Valley donors to close themselves off from their neighbors in need and miss out on an opportunity to obtain for themselves and their neighbors the highest goal of philanthropy.