The Giving Code – Silicon Valley’s ‘Prosperity Paradox’

Successful start-ups and global tech companies like Facebook and Google have created some 76,000 millionaires and billionaires in California’s Silicon Valley. Yet all this wealth has had consequences for other residents. “It has driven up housing prices. It has driven up office space costs. It has driven up the cost of living,” says Heather McLeod Grant, co-founder of Open Impact, a social impact advising firm. “You have people who, literally anywhere else in the country would be middle class, and they’re the working poor here.”

Increasingly, struggling families are turning to nonprofits for help and finding that many of these organizations are themselves strapped financially. But why? After all, the region’s wealthy are generous. McLeod and her Open Impact co-founder, Alexa Cortés Culwell, report that individual Silicon Valley philanthropists gave away nearly $4.8 billion in 2013 alone, and every year they are giving more. “When you look across individual philanthropy, private foundations, and the growth of donor advised funds, they’re hockey stick charts,” Cortés Culwell tells us. “The number of private foundations has nearly doubled since 2000. The issue is, where is the money going?”

That’s the subject of The Giving Code: Silicon Valley Nonprofits and Philanthropy, a new report by Cortés Culwell and McLeod Grant. In this podcast, the pair discuss their investigation into what they call Silicon Valley’s “prosperity paradox”. They explain why local donors are largely unaware of the immense challenges right in their own backyards, and they share their thoughts on how wealthy donors and local nonprofits can work together more effectively to address the region’s growing needs.

Additional Resources:

The Giving Code report

McLeod Grant and Cortés Culwell: Bridging the Divide Between Nonprofits and Philanthropy in Silicon Valley

Inside Philanthropy article: How Much Should The Wealthy And Foundations Give In Their Home Regions?

Open Impact on Twitter

Feature image: Open Impact founders Alexa Cortés Culwell and Heather McLeod Grant

1 Comment

  1. Susan Speicher

    I recently listened to your podcast about giving in Silicon Valley and I felt compelled to write to Open Impact to share my thoughts as a member of the community.
    I’m attaching a copy of that letter.

    I just listened to your excellent interview on Tiny Spark and thought I’d pass along a letter I just received that I believe shows how strategic, targeted philanthropy can make a big difference with a small investment.

    First, some background. I’m a fortunate Atherton resident who feels strongly that good fortune should be shared. I’m a longtime volunteer and donor to causes that support education, especially education for those individuals needing a helping hand. I have no interest in reinventing the wheel so instead I look for good programs that are just missing a link. I liken it to a climbing wall. All of the foot holds can be perfectly placed except for one and that small missing link can stop one from reaching the goal. I like to fund that link.

    I also like to be hands on as a volunteer so I tutor math . I particularly focus on Latina girls because they are the first to drop out. Just that little “link” of having a tutor tell them that they can do it often is all they need.

    ______, a Canada College student recently texted me:

    “Hi susanne, I just wanted to yell you that today I did my math final. I was thinking of you because you had helped me a lot, specially in math. I never even imagine that I was a woman ever pass math class and thanks to your help I did. So thank you for that. I never felt so proud and ready to pass and do a final exam. I got out of that to almost crying because that felt that now I can do anything. So thank you for helped me believe in myself.”

    Two years ago I was talking to my friend Elizabeth Weal. She founded Sequoia Adult Student Scholars (SASS), an organization that helps adults transition from adult education to community college by providing counseling, mentors, tutors, textbook vouchers and bus passes. I asked her what was missing and she quickly replied. “Computers.” It seems that almost all community college work is turned in online and few of the SASS students had computers. Yes, there was the computer lab available at the school and, of course, there was the public library, but like the climbing wall these resources were just out of reach for students who had to get to jobs or take care of their children. The solution that many had available was their cell phone. Now, I’m a pretty smart person, but I don’t think I could write a successful essay on my phone. I thought for a minute about my computer. My first thought was that I could get a new one and donate the old one. My second thought was that I didn’t need a new computer, my old computer was fine, so maybe I should just donate a new computer. I made that offer to Elizabeth and she thanked me with hesitation in her voice. “Problem?” I asked. Her response was that so many students needed them that she didn’t know who was most deserving. Without thought I blurted out, “What if I gave you 10?”

    I’ve been joined by friends and to date we have given away fifty new computers. The impact of that small effort has been overwhelming. In addition to students reporting that they are better able to do the course work, they are able to use their computers for things many of us take for granted. Their children also have a computer in the home which helps bridge the digital divide. Some students are taking online courses which eliminate the need for transportation. _______, a young man in the SASS program, has promised to pay it forward as he studies to become a police officer.

    So finally, I’m enclosing a copy of a letter I received the other day. I’ve never met _______ but he and I are both part of this community called Silicon Valley and I am fortunate to be able to offer him that needed “link”.

    Keep encouraging all of us to recognize our common humanity and shared community.

    Susan Speicher

    The letter read:
    My name is ________ and I am a recent graduate from Sequoia Adult School. I am currently attending Canada College where I hope to complete my general education so I can transfer to another school and get degree in Computer Information Science. Last quarter was a very difficult one for me. I started college for the first time, as well as my second job. Regardless of the work load, I was determined to do well in school and pass all of my classes. However, in the middle of the semester, my computer stopped working. All of my homework including math was supposed to be turned in electronically. I struggled to find computer space to access and turn in my homework, however with my busy work schedule , I was never able to make it before they closed. Unable to purchase a computer, I reached out to ——and she contacted Elizabeth Weal of the SASS foundation. Elizabeth then informed her that there was an available laptop that had been donated by you. I have since received this laptop, and I cannot even begin to say how incredibly grateful I am to you and the entire SASS Foundation for giving me this resource. I can say for certain that without this computer I would not be continuing my education and registering for spring semester. Thank you for all you do.

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