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Who Silicon Valley’s Givers Are Leaving Out

A new report finds that while tech millionaires are making big bets with philanthropy, they are leaving out organizations closer to home.

Who Silicon Valley’s Givers Are Leaving Out
[Illustration: StudioM1/iStock]

At a time when Silicon Valley is flush with newly minted millionaires (and billionaires), it turns out that while many of high-wage workers are become a force in philanthropy, they’re not directing much of that good will toward the people closest to home. The tech region’s donors spent about $5 billion on philanthropic ventures in 2013, according to The Giving Code, a new report by Open Impact, a social change advisory firm that received funding from the David and Lucile Packard Foundation. That’s a 150% increase from just five years earlier. Yet of 130 community-based organizations in San Mateo and Santa Clara counties that the report surveyed, most reported having no access at all to the region’s new network of high-net-worth donors.

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Silicon Valley’s middle class is shrinking in the wrong direction. Low-income families are earning less than they did in the late ’80s, and at least 30% of residents rely on some sort of public or private aid to live. Silicon Valley nonprofits—many of whom provide free health care, food, and shelter—are seeing a huge surge in the need for their services. While 80% have expanded in recent years, more than half operating in the red. At least half still aren’t able to meet the demand for services. Less thought–and money–appears to be going toward locals interested in battling the underlying regional problems than to other charities.

Mark Zuckerberg has expressed interest in fixing the affordable housing crisis, which would certainly help with some of the region’s issues. But unless he structures the intervention carefully, it could be knocked as too self-interested. (Impoverished residents and Facebook employees alike could both use mortgage relief.) Such over-optimized thinking may already be a fundamental flaw. “The amount that Silicon Valley companies have given away locally through cash contributions has more than doubled since 2009, from $56 million to nearly $117 million in 2015,” notes the report. “However, as corporate philanthropy has become increasingly strategic over the last two decades, more companies are now focusing on issue areas or programs aligned with their core business objectives, which can result in less funding being directed toward community-based organizations.”

Will that change this month? People give away about 40% more in December, in part to take advantage of year-end tax breaks, according to a recent report by the Mastercard Center for Inclusive Growth. Last year, however, the national impulse to help out at home was equally unhopeful: Less than 1% of giving (at least for what’s done over a MasterCard) was put toward housing, with only 5% put toward human services in 2015. The highest grossing cause was education, followed by arts and the environment.

According to the stats in the report, the size of individual donations is also dropping, as groups that have traditionally lacked ability to attract those December windfalls are making up some of the difference by asking donors to give steadily on a regular basis. Perhaps some of that new Valley money could be invested in monthly payments that fund incremental change–even if that sounds a bit old-fashioned.

About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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