Bridging the Silicon Valley Divide

Co-founder of Open Impact talks tech, charitable giving

Grant PustelnikASSOCIATE REPORTERFebruary 2, 2017

Silicon Valley has a reputation for contradicting itself.

Alexa Cortés Culwell, co-founder of consulting firm Open Impact, spoke on campus last week about bridging the gap between the tech industry and charitable contributions.

While Silicon Valley’s millionaires have contributed to the economic boom, the cost of living for most residents has grown out of hand.

Appropriately-titled “The Giving Code” it was the first in a series of events hosted by the Markkula Center for Applied Ethics.

“Heather and I were often sharing anecdotes with each other about the disconnects we were seeing between donors and philanthropy and all of the need-based organizations at work here,” Culwell said about conversations she had with co-founder Heather McLeod Grant. “We really wanted to get beyond the anecdotes and dig into some data.”

The Giving Code is a 78-page study that addresses which improvements can be made to Silicon Valley’s economic infrastructure.

Culwell’s talk lasted roughly 45 minutes and was followed by a short question and answer session.

The study emphasizes the contributions of philanthropic donors and charitable organizations and Culwell highlighted an interesting trend about the allocation of funding for nonprofits.

According to her, most nonprofits in the Silicon Valley are centers for human services, yet they receive little funding compared to universities or hospitals, which have less physical institutions in the Silicon Valley.

“The takeaway on this, higher education versus human services, is donors give to what’s familiar. Your higher education institute, where you went to school—that makes sense,” Culwell said. “They served you. You had a personal experience. It was awesome. Now you give back.”

As an example of this, Culwell referred to the recent Sobrato donation to Santa Clara for a new STEM facility.

For the sake of the study, Silicon Valley was defined as the region containing the Santa Clara and San Mateo counties and the statistics drawn from data collected in 2016.

Among them was one startling finding—that even though Silicon Valley boasts more than 75,000 millionaires, nearly a third of residents rely on public assistance to remain afloat economically. According to Calwell, this leads to an increase in the demand for nonprofit organizations.

While the study reports a 150 percent increase in charitable donations between 2008 and 2013, suggesting that philanthropic donors are responsible for this rise in demand, more than half of nonprofit organizations in Silicon Valley are unable to meet the needs of the area.

According to Culwell, the result is an increasing gap between wealthy philanthropists and Bay Area residents that either run or seek assistance from nonprofit organizations.

Culwell’s presentation also emphasized donor-advised funds, which are essentially savings accounts for charitable donations.

Her study states that the two largest national charities, Fidelity Charitable and Schwab Charitable, have roughly $2.2 billion in assets in donor-advised funds from Silicon Valley. This value is a 946 percent increase since 2005.

The presentation intended to educate attendees about the financial situation of Silicon Valley and provide information about how philanthropists and nonprofit organizations can accomplish the proposed concept of The Giving Code. The latter goal can be tied to a key page of the study that was emphasized in the presentation.

This page offered methods that philanthropists and nonprofit organizations can use to help bridge the gap between how funds are donated by philanthropists and how funds are allocated by nonprofits. Among the most notable of these is strategic investment from philanthropists.

According to Culwell, it’s not necessarily about how much money is given, but rather where the money is allocated so that immediate needs of the community can be met.

She said nonprofits are encouraged to clearly outline goals and risks while developing creative methods to encourage philanthropists to donate to their cause.

The full study can be viewed on Open Impact’s website.

“Commitment to empathy is what we need more of,” Culwell said in her closing remarks. “We’re hoping through these events, talking to people, that we’re beginning to cultivate awareness of this data and more empathy in action around these issues.”

Contact Grant Pustelnik at gpustelnik@ scu.edu.