Give Globally, Ignore Locally?

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As more employees are giving back at work, companies have the responsibility and opportunity to help steer donations to chosen causes. The consequence of these choices is not always apparent, but for Silicon Valley companies a recent report lays bare exactly what’s at stake.

The Bay Area’s colossal tech sector is known for both its extraordinary social entrepreneurism and for being the unwitting cause of social ills in its own backyard. The tech elite have made San Francisco the most expensive city in the country, driving out the middle class and opening up a yawning chasm between rich and poor.

Much attention has been drawn to this issue, and of course the problem isn’t unique to San Francisco. In his recent book, The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class — and What We Can Do About It, Richard Florida focuses on the idea of “winner takes all” urbanism. As David Plazas reported for USA Today, this trend has seen “superstar” cities like New York, San Francisco and Los Angeles reap the benefits of knowledge workers, known as the “creative class,” moving into and clustering together in urban centers to spur innovation and economic development. The effect is to drive up land prices, which pushes lower classes to outlying areas and furthers the segregation amongst demographics.

In Silicon Valley, the tech sector has soared over the past decade, and philanthropic giving has spiked accordingly. But that hasn’t benefited the city that spawned the wealth. At a time when public assistance is necessary to sustain 30% of Silicon Valley residents, a new report has found that 90% of the philanthropic donors from Silicon Valley donors are leaving the region. 

The Giving Code: Silicon Valley Nonprofits and Philanthropy is the result of research by Alexa Cortés Culwell and Heather McLeod Grant, who run advisory firm Open Impact. As reported by Forbes writer Kerry A. Dolan, there’s no doubt that Silicon Valley is filled with generous philanthropists: The Giving Code found that there are 76,000 millionaires and billionaires in Silicon Valley, and individuals from the Valley gave $4.8 billion to charitable causes in 2013, a 114% increase compared to 2008. These Silicon Valley donors also give a larger percentage of their adjusted gross income than Americans give away as a whole.

But still, almost all of these donated dollars are going outside the Bay Area. 

“Give globally, act locally” may be a well-worn pearl of wisdom for giving, as many studies have found that donated dollars go further in a developing country. Peter Singer, author of The Most Good You Can Do, is just one of many experts who have lamented the relatively low giving to international causes and makes a data-driven case about the lives that can be saved from giving globally. As reported by Sandy Stonesifer for Slate, independent charity evaluator GiveWell estimated that their top-rated international charity averts a child death for every donation of $200 to $600. “You would be hard-pressed to find a local charity that could actually save a life with a similarly sized gift. (But if you know of one, tell me about it!),” Stonesifer notes.

Aside from the impact arguments of international giving, philanthropists are also getting creative with their donations and want to be more personally involved with creating social impact.

Dolan cites several publicly-known examples of this mentality, starting with Mark Zuckerberg’s $100 million gift to Newark, New Jersey public schools; the Chan Zuckerberg Initiative’s $24 million investment in Andela, with the aim of training engineers to work in Africa; and Jeff Skoll, who directs much of Skoll Foundation’s funds to social entrepreneurs who work all over the world.

This may be well and good, but what happens to the next-door neighbor nonprofits starving for funds to serve local needs? The Giving Code found that 17% of Bay Area workers are paid less than $35,000 a year – in a place where rents are 227% higher than the national average. As Dolan quotes from the study, “To afford a fair market price apartment in Silicon Valley, a renter would need a yearly income of $94,251.” The Bay Area has 600,000 people in the Bay Area living below the poverty line, and 1 in 5 people in the poverty line.

Yet the other 10% of philanthropic giving that does stay local often goes to large institutions such as Stanford University and the region’s largest hospitals, not community-based organizations that serve pressing grassroots needs. Fifty-one percent of 130 nonprofits surveyed in April 2016 said they would not be able to meet the demand for their services, while nearly 53% said they had run on a deficit in the past year. 

Again, this trend of traditional nonprofits being left behind is not unique to Silicon Valley. For companies in every city, being a part of the solution means thinking about your own community as well as more global causes. Leveraging employee giving programs to make it easy for employees to give back to grassroots nonprofits that serve neighbors is one step towards being a responsible corporate citizen.

“When we started Tipping Point, people would tell us that their dollar would go further abroad. And it does. Then I would ask them, ‘Do you want the city you live in … to be known for this huge opportunity gap and 10,000 people sleeping on the streets?” Tipping Point CEO Daniel Lurie said to Dolan. “I’m optimistic. We are seeing companies like Facebook and Google starting to give back. I do think it’s changing. It’s not changing as fast as we like.”

How we choose to allocate our giving dollars is ultimately a very personal decision. But for the wellbeing of communities across the country, company leaders can seize the opportunity to support and lead effective altruism at the local and not just global level. Partnering with local nonprofits to integrate long-term, impact-driven giving with volunteering is one way to get employees engaged around community organizations, some of which might be new to them or already serving family members and friends.  

In the words of the late great Mr. Rogers - “Won’t you be my neighbor?” And you can’t say no to Mr. Rogers.

Ryan Scott