SAN JOSE, Calif. Is the home of the nation's most expensive homes, newly optioned technical millionaires and six-figure engineering salaries a place for skinflints when it comes to philanthropy? Are the Valley's tax-deductible donations of hardware and software selfishly motivated to get engineering students working with a company's products and possibly breed a few more engineers?
"We do have a strong pattern of giving, but we also have pockets of real stinginess," said Peter Hero, president of Community Foundation Silicon Valley (CFSV).
"While we have many generous donors, almost half our wealthiest contributors give just $2,000 or less annually to charity," according to "Giving Back, the Silicon Valley Way," a recent CFSV report. "The Valley is a region that has clearly not reached its potential in charitable giving and volunteerism."
There are some signs of generosity. "More than eight of 10 households give to charity, well above the national average," according to the CFSV report. And Valley residents buy into the fact that it's important to give back to the community. But a national survey of regions around the country ranked Silicon Valley as mediocre in terms of giving per capita. Older, industrial sections of the country fared better.
Paul Lippe, senior vice president of Synopsys Inc., based in Mountain View, Calif., said the statistics aren't the final word on the Valley's giving practices. His message: Just wait a few years.
Young and rich
Though the Valley is home to some of the nation's youngest millionaires and billionaires, some of them don't yet think of Silicon Valley as home. One-fifth of the population has lived there less than five years. CFSV found only half think of the Valley first when they give. Ties to the community are still forming. The CFSV survey found that many residents are ambiguous about the Valley's desirability as a place to raise families. With time, that may change.
Technology entrepreneurs are too busy adding to and protecting their newfound fortunes to think about giving it away. Traditionally, that comes with age, Lippe said.
"Giving is a learned behavior," said Charles Maclean, a philanthropy expert with Philanthropy Now Inquiry (Portland, Ore.). "Just as a startup goes through phases, so too we mature in our giving."
As they grow older, the wealthy often look for "good causes" to support. That process is evident in some of the Valley's older entrepreneurs. Multimillion-dollar donations have been announced in the past year from Intel Corp.'s cofounder Gordon Moore and from the Packard Foundation, a legacy of Hewlett-Packard Co.'s cofounder David Packard. Lippe pointed out that some of the nation's oldest foundations, such as The Ford Foundation, didn't really get started until their entrepreneurial founders grew older or died.
But why pick on the Valley, especially if it gives more than the national average? The answer lies in its huge success.
"Silicon Valley is a gifted region with enormous wealth of human, financial and technological resources," according to the CFSV report. But to date the Valley has been largely self-absorbed, business-centric and detached from social issues.
There are some points of light. Several dozen Synopsys employees joined a "coastal cleanup" campaign recently. Cadence Design Systems Inc. has raised thousands of dollars with its "Stars and Strikes" charity bowling event. Hundreds recently attended a very hip, very techno-cool Silicon Planet function with the proceeds going to local AIDS organizations. And every week, every day, individual Valley engineers, staffers and managers reach outside their workplaces to people in need. And in fairness, some of the wealthier technology scions are stock-rich but cash-constrained. Sometimes the wealth is trapped in options that cannot be tapped for some time to come.
The story is improving among Valley corporations. Forty-nine companies surveyed by CFSV gave $49 million, with about 62 percent of it going to education. That's much higher than the national average, where corporations generally give 33 percent to education.
Because its work force is young, focused and demanding of itself, the Valley is rewriting the rules of philanthropy by demanding that charities operate more like a business.
"The mythical 28-year-old Silicon Valley multimillionaire has just purchased an $85,000 Porsche. With that purchase, the local philanthropic organizations lost a $50,000 order," Bill Davidow, partner in the renowned venture-capital firm of Mohr, Davidow Ventures, told a conference of foundation executives.
Davidow used the word "orders" deliberately. "Businesses are used to thinking in terms of competition," he said. Philanthropies at least those soliciting the Silicon Valley nouveau riche need to understand they, too, face competition and have to treat donors as they would a coveted customer.
"There is an emerging philanthropic sector," said the CFSV report, "that is being led by people who have participated in business and industries that have had a transforming effect on society . . . Based on their experience, these individuals have confidence that what they do in philanthropy can have similar transforming effects."
Maclean, in a survey of Northwest entrepreneurs, noted that the new generation of givers "want to give like they run their companies: fast, focused, taking thoughtful risks and demanding results. They have low tolerance for unevaluated, big national causes and want to both micro- and macro-manage their giving, which they see as investing, not just charity."
But philanthropy isn't all about business.
In his speech to foundation executives, Davidow said that too many charitable groups don't offer "psychic rewards" to donors. Referring to his mythical engineer in the Porsche, Davidow said, "The Porsche is not just about transportation. It is about social recognition." Successful entrepreneurs in the engineering world have gained business stature. Getting a seat at the dais with a celebrity provides another type of stature, especially for a technologist.
A Harris Poll commissioned by the American Association of Engineering Societies this year revealed that the public perceives engineers as key contributors to the nation's economy. But they don't see engineers as having much impact on or caring about social issues. The rap on engineers is that they are apolitical, and even asocial. They're not in Congress, and they're not celebrity material. That's a bad rap, according to some, because engineers are creating pacemakers as well as "peacemakers" missiles. Philanthropy provides a possible outlet to change public perception.
Thus far, technology entrepreneurs in the Valley have concentrated on public education initiatives. "Education is a critical issue for us," the CFSV report states. Company after company has initiatives to improve science and math education in secondary and elementary schools. Typical of the preference for focused, laser-type projects, a couple of entrepreneurs have targeted specific schools or even one class for scholarships, hardware and training.
Self-interest at play
As helpful as those programs are, they still have an air of self-interest. The Valley companies and donors want these students to be employees eventually. Bill Gates, the richest man in America, has run into criticism for Microsoft Corp.'s focus on in-kind donations of its products to education programs.
That trend has emerged in the past 10 years, Maclean said. Companies used to give to completely unrelated causes, but today they often seek a link to their products.
Lippe counseled for patience. The Valley is young. Already a world leader in business and technology, and now a player in national politics, the Valley's influence on going after the nation's most vexing social challenges has yet to be felt.