Silicon Valley nonprofits struggling, focus on impact to gain donors

The
Apple Campus 2 is seen under construction in Cupertino,
California in this aerial photo taken January 13,
2017.
Noah
Berger/Reuters

• Less than 5% of donations from wealthy people in
  Silicon Valley reach local nonprofits.
• Silicon Valley nonprofits are trying to rely more on
  data analysis to show wealthy donors how their money could make
  an impact.
• Some nonprofits have hired marketing consultants to
  help out.

Silicon Valley is home to many prominent philanthropists —
Larry Page, Elon Musk, Pierre Omidyar, to name a few — but these
billionaires often donate to causes outside the Bay Area.

Meanwhile, nonprofits in Silicon Valley are struggling to raise
enough money as demand for their services grows,
according to The Atlantic.

As a result, local organizations are being forced to act more
like startups than traditional nonprofits to echo the
mentality of Silicon Valley donors, who tend to measure
effectiveness through data rather than altruism.

Mark Zuckerberg and Priscilla Chan, his wife,
have committed $120 million to improving education in
underserved schools across the Bay Area, but gifts like theirs
are not all that common among Silicon Valley billionaires. 

Roughly 90% of donations from Silicon Valley go to national and
international causes, according to The Giving Code, a 2016
report about
philanthropy in Silicon Valley. Of the remaining 10%, a
significant chunk benefits hospitals and large universities,
while less than 5% reaches local groups.

The rising cost of living is producing a greater need for
community-based services in Silicon Valley, where nearly
one-third of residents require public or private assistance.

In Santa Clara and San Mateo counties — home to Silicon
Valley cities like Cupertino and Menlo Park — about 80% of the
local nonprofits surveyed in the report saw an increase in demand
over a five-year period. But more than half of them are
struggling to meet demand for their services, and many are
gradually adopting the language of startups to market their work
to donors, The Atlantic reported.

“In talking about the world and about their work, most nonprofit
leaders speak a moral language that emphasizes social
responsibility, social justice, equity, and the common
good,” Alexa Cortés Culwell and Heather McLeod Grant,
authors of The Giving Code, wrote in their report. “The
new philanthropists are far more transactional when describing
their work and their strategies. Theirs is a language of finance,
of metrics, of power, of capitalism, of winners and losers.”

The Bay Area is home to some of the wealthiest people in the
world, with 74 billionaires reported to be living in San
Francisco last year,
according to financial research company Wealth-X.

These individuals are striving to be “bigger, better, and
faster” in their donations than past philanthropists, according
to The Giving Code. 

Billionaires’ donations, however, frequently go
toward issues they have personal connections to, such as
diseases that have affected their loved ones. Bill Gates,
for example,
donated $50 million to Alzheimer’s research last year, saying
the decision was personal because men in his family have been
diagnosed with the disease. Gates
teamed up with other philanthropists this year to put another
$30 million into this research.

McLeod Grant told The Atlantic that tech donors also like to
focus on large, systemic issues like healthcare and education.

Some nonprofits have already taken steps to focus more on data.
The Silicon Valley Children’s Fund, for example, hired a
marketing firm to “speak in the language of business and
metrics” and help the nonprofit raise money for foster youth,
according to The Atlantic.

Many local organizations, however, are not able to contract
specialists with their current budgets. Close to one-third of
Silicon Valley nonprofits have large deficits, and nearly half
only have enough cash on hand to keep running for three
months. 

To help nonprofits attract more donors, two local foundations
recently awarded 20
grants to community-based organizations. The grants are worth
more than $800,000 in total and are meant to bridge gaps in
social networks and mindsets between local nonprofits and Silicon
Valley philanthropists. 

One of these groups, Sacred Heart Community Service, will use its
grant to hire a consultant who can help the nonprofit come up
with metrics to describe its work and terminology to
articulate how it is helping low-income people in Santa
Clara County.