News and analysis
October 03, 2017

Growing Wealth in San Jose Doesn’t Always Work Out Well for Charity

This region, home to Silicon Valley, is America’s most famous example of wealth disparity. Though the tech industry is cranking out millionaires, poverty and need are growing. "We’re serving more people today than we served even at the depths of the recession," says Kathy Jackson, CEO of a regional food bank.

With the middle class shrinking, some traditional vehicles for small-donor giving are not faring well. The United Way of Silicon Valley merged with its San Francisco sibling. Also, a giving day started in 2014 was suspended this year, with organizers citing "donor fatigue."

Yet thanks largely to giving by the wealthy, itemized contributions to charity nearly doubled from 2012 to 2015, to $5.1 billion. Average giving by tax filers earning $200,000 or more grew from $20,000 to almost $33,000.

Open Impact, an advisory and research firm, reported last year that community-based groups are often overlooked by Silicon Valley’s wealthy, whose giving strategies tend to focus on innovation and new philanthropic vehicles. To help these organizations connect with high-net-worth donors, the regional council of nonprofits brought financial advisers to its annual conference this spring. "We’ve got to have more of those conversations," says Patricia Gardner, head of the association.

Yet Silicon Valley’s wealthy are targeted by a host of entities with their hats out, from national universities and charities to political campaigns and for-profit startups. "Silicon Valley functions like the ATM of the world; everyone comes here to raise money," says Lisa Van Dusen of the Silicon Valley Social Venture Fund. "It’s hard for small organizations to cut through that."

Send an e-mail to Drew Lindsay.