During the tech bubble in the late 1990s, the young and rich technology entrepreneurs in Silicon Valley were sometimes derided as “the cyber-stingy.”
Laura Arrillaga-Andreessen, a philanthropist who teaches at Stanford, started the Silicon Valley Social Venture Fund in 1998 to encourage the newly minted millionaires to become more generous and to help them give effectively.
The fund, often called SV2, also was one of the early apostles of the venture-philanthropy movement—the notion of investing in high-performing, rapidly growing charities and giving them hands-on support to improve their operations.
The sexiness of venture philanthropy has largely worn off, and many of the tech entrepreneurs are gone. Yet SV2 lives on at age 13 and by many accounts is thriving.
SV2 is a giving circle—each individual or household agrees to contribute $5,000 or more per year. The funds are combined and used to make relatively large grants—as much as $50,000 a year for three years—to charities in the Bay Area that focus on education, environmental sustainability, or international development. The donors also use their expertise to help grantees improve their management practices, strategies, and systems. The fund has 150 donors this year, the most in its history, after bouncing back from a drop during the 2008-9 recession.
As SV2 has matured, it has moved to more of a “church” model, according to its executive director, Lindsay Austin Louie. Rather than providing donors a short-term primer on giving, SV2 wants to attract people who will stay with the organization for years and offer steady financial support. Roughly 85 percent of donors renew each year.
The vast majority of donors are now between ages 40 and 60, Ms. Louie says. SV2 no longer makes much effort to recruit the twenty-something techies. “They tend to cycle in and cycle out,” she says.
Rebound From Recession
SV2 is aligned with a like-minded 25-city network called Social Venture Partners International, which also has rebounded from the downturn. The network of giving circles had 2,022 donors in 2010, topping its previous high from 2007, and the chapters awarded a record $3.8-million in grants in 2010.
Donors say they see value in SV2, and their participation apparently makes them even more philanthropic. In a recent survey, 89 percent of SV2 supporters said they had become more strategic in their giving since joining the organization, and more than 70 percent said they had become more involved in the community and donated more to charities.
As for its grant making, SV2 has had some notable successes.
Fresh Lifelines for Youth, which provides mentors and leadership training to needy young people in two Bay Area counties, had just seven employees when SV2 made a three-year grant to help it hire a development director in 2004. Now the charity has 27 employees, and it is working with 3,700 juvenile offenders, four times the number it helped in 2004.
“SV2’s strategic investment catapulted us to the next stage of organizational growth,” says Christa Gannon, the charity’s executive director.
Reading Partners, a tutoring program that works with elementary schools in low-income areas, had one site in Menlo Park, Calif., in 2003 when SV2 made a three-year grant and several SV2 donors joined its board. The charity now serves 3,000 students in three states and recently won a $7-million grant from the federal Social Innovation Fund.
Mrs. Arrillaga-Andreessen gave up day-to-day leadership of SV2 in 2008 but remains on its board as chairman emeritus. At a meeting here last month to brainstorm ways that SV2 can make a difference beyond its grant making, she volunteered to help each of the four donors who are championing specific programs further refine their ideas before the board chooses one in December.
“I’m incredibly proud of what SV2 has accomplished,” Mrs. Arrillaga-Andreessen says.
