Maria Bustillos reports: The Puente de la Costa Sur community center sits at the end of a quiet street in Pescadero, an isolated farming town of about 5,000 nestled amid green hills just inland from California’s Pacific Coast. It’s a beautiful, lively place to be at sunset, right before the kids will be picked up from day care.
Rita Mancero is the petite program director who assists local immigrant and migrant farm workers with learning English and preparing tax returns; the center also offers college scholarships, helps with writing resumes, getting children vaccinated, applying for citizenship, even with Zumba classes. Mancero, who holds a master’s degree in education from Universidad YMCA in Mexico City, is a Red Cross instructor certified in CPR, a paralegal, a trained tax preparer. And a ham radio operator. Her biggest priority?
“The famous ‘Education Gap,’” she says. Her affection for the children in her care is direct and immediate.
Some of the grant money that funds the Puente de la Costa Sur center comes through the Silicon Valley Community Foundation, the largest such foundation in the country. Its assets have ballooned in recent years, from just over $2.9 billion in 2012 to more than $6 billion today. But the foundation’s direct grants to Silicon Valley’s surrounding communities last year amounted to just $8 million.
There have been many news stories about the vast sums contributed to philanthropy by Silicon Valley tech tycoons. Where does this money finally wind up? The short answer is that most of it stays put. Most of that $6 billion in assets at the Silicon Valley Community Foundation isn’t under the foundation’s real control, nor should the money be understood as even remotely intended to provide direct assistance to the residents of Silicon Valley. It might not even be money: It might be real estate, or stock, as in the case of the Zuckerbergs’ recent donation of 18 million Facebook shares, then valued at $991 million, according to the Wall Street Journal.
Donations like this one are, first and foremost, a wealth management tool: Assets are parked at the designated charity in order to obtain tax breaks, and these days they generally stay under the control of the donor. That is, the donor can’t take the money back, he’s “given” it, but he can direct its granting and its investment. [Continue reading…]
Letter to the Editor
To the editor of Capital & Main,
The post by Maria Bustillos on Feb. 10 titled “Silicon Valley: Wealth Redistribution, One Percent-Style,” contains some inaccuracies about local grantmaking and public policy initiatives at Silicon Valley Community Foundation. But more importantly, Ms. Bustillos’ post represents a misunderstanding of the nature of charitable funds held at community foundations, and criticizes the idea of such giving at a time when it’s sorely needed.
Government funding has been insufficient to answer our region’s growing income gap, affordable housing crisis, transportation woes and troubled education systems, leading many to call on philanthropy to fill those gaps. And in fact last year Silicon Valley Community Foundation – through our approximately 1,700 individual and corporate donors – contributed $474 million in grants to nonprofit organizations. This is more than any other community foundation awards.
Bay Area charities received $216 million of this total, more than they received from any other private or community foundation. While more giving is always needed, the generosity of our donors should be celebrated, not scorned.
SVCF makes $8 million to $10 million in strategic investments annually through its discretionary grantmaking programs to some of the most effective and innovative organizations in our region to solve challenging local problems. We have been outspoken on many public policy issues, not just the two mentioned in the blog post. In 2014 we continued our work to combat payday lending; worked to solve persistent inequities in how students of color are assigned to math courses in high school (“math misplacement”), a practice that derails students from the college track through no fault of their own; and shined a light on the very real problem of human trafficking in Silicon Valley. In addition, we helped more than 600 nonprofits raise $8 million in a single day last May during SVGives.
Thousands of regular Americans use community foundations and other donor advised fund services to support causes they care about. The fact that they do not disburse their charitable funds all at once is strategic. Many, rightly, want to take time to decide what causes matter most to them, and where their funds can have the greatest impact. And long-term philanthropists want to reserve some of their resources for social problems and causes that will inevitably present themselves. Our country’s tax laws reflect the wisdom of this goal – and our communities are the beneficiaries, both today and tomorrow.
We hope that this letter will help give a fuller picture of the local grantmaking and initiatives underway at Silicon Valley Community Foundation than Ms. Bustillos offered in her piece.
Sidney G. Griffin
Vice President of Marketing and Communications
Silicon Valley Community Foundation
Pacific Standard has posted the following response from the article’s author:
FROM MARIA BUSTILLOS
Dear Mr. Griffin:
If, as you correctly note, “[g]overnment funding has been insufficient” to answer the many problems facing your region, that is in no small part because corporations and individuals are shielding their wealth from fair taxation. Part of this shielding takes the form of payments to foundations such as SVCF. Given that these payments have been diverted from government to you, it is disingenuous to blame lack of government funding for the persistence of local problems. This is the wider background against which the effectiveness of modern philanthropy must be seen and judged.
To illustrate further: Around $2 trillion is currently held offshore by American corporations in avoidance of U.S. taxes. Last year, the International Business Times reported that Microsoft alone is holding in excess of $92 billion offshore in order to avoid taxation, representing an estimated $29 billion loss to the citizens of the United States.
To put that in perspective, the entire $474 million donated to non-profit organizations by your foundation last year amounts to about 1.6 percent of the amount that Microsoft, one single company, owes the rest of us.
And you know, though our readers may not, that a corporate vice president of Microsoft sits on your board of directors.
Disbursements from private foundations alone cannot mend systemic income inequality caused by a corporate culture that has lost all sense of responsibility to the people, not only of California, but of the United States. Only a rise in wages and benefits commensurate with GDP growth, combined with the prompt, fair, and responsible payment of taxes, can do that.
You write: “The generosity of our donors should be celebrated, not scorned.” I am not scorning anyone’s generosity: I scorn selfishness that clothes itself in the appearance of generosity, and expects to be congratulated in return.
Very truly yours,
Maria Bustillos