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In Silicon Valley, too little giving goes to the local poor

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To make matters worse, the cost of living — a fallout of the tech boom — has climbed so high that a stunning 30 percent percent of local residents, roughly 800,000 people, now rely on some form of public or private assistance. Silicon Valley’s middle class is disappearing, decreasing by 11 percent since 1989. As a result, local nonprofits report a sharp increase in the number of families accessing their health clinics, food banks and shelters.

Demand for their services now is higher than it was during the recession, noted Kathy Jackson, the CEO of the Peninsula’s Second Harvest Food Bank. She tells the story of a public school teacher having to visit the food bank when she fell ill and her husband became unemployed. Then there is the valley’s “housed homeless, with two or more families living in a small apartment or renting garages or single rooms.”

Unfortunately, many local nonprofits lack the operating budgets to meet these rising needs. Almost half have less than a three-month cash reserve, and they struggle to compete for talent and pay rising rents.

To make matters worse, many of these nonprofits don’t know how to access this new wealth, even though it might be just down the street. While tech donors use a business-like approach to their giving — focusing on diversifying their giving across different issues, geographies and giving vehicles — many community groups don’t know how to connect or communicate with these new philanthropists.

So what is standing in the way of these high-tech philanthropists and community nonprofits working together to address our region’s most systemic problems?

Fragmentation: The social safety net here is made up of thousands of very small nonprofits, many with just a few employees and tiny budgets. This creates fragmentation of effort, and confusion among donors.

Lack of awareness: Many new philanthropists don’t know the gravity of local needs. There are a few trusted intermediaries however to help bridge this gap.

Giving trends: Increasingly, the wealthy are choosing to give through national donor-advised funds, family offices or wealth management firms that aren’t schooled in social change and lack relationships with local nonprofits.

We urgently need new opportunities for philanthropic and community nonprofit leaders to learn from one another. One starting point would be to work together on solving local problems. Here are a few suggestions:

Participate in a giving circle: Such funds, such as the Silicon Valley Social Venture Fund or the Full Circle Fund, help donors become more confident about their philanthropy, which leads to more giving, including for local causes.

Volunteer: Such an activity can serve as a gateway to greater community engagement and local giving.

Learn from each other: We need to build pathways between donors and nonprofits so they can understand each other’s language, mind set and approaches.

One thing is certain: The widening gulf between the wealthy elite and working poor, which is then amplified by philanthropists and community-based organizations, is hardly unique to Silicon Valley. These forces are playing out across America.

We think Silicon Valley nonprofits and philanthropists have a unique opportunity to disrupt these extreme imbalances and find new solutions by working together. To re-engineer our local economy, and create healthier communities for everyone, would be the ultimate triumph for Silicon Valley philanthropy.

Heather McLeod Grant and Alexa Cortés Culwell are the co-founders of Open Impact, a social-impact advising firm, and the authors of “The Giving Code: Silicon Valley Nonprofits and Philanthropy.”


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