When it comes to tech moguls giving money away, Steve Kirsch is no Bill Gates -- but he's no slouch, either.
With a net worth of around $200 million, the Infoseek founder can't afford to pony up a couple of billion to wire libraries. But he can afford to give, and give he does.
When Kirsch isn't running a successful Internet company or raising a young family, the 42-year-old doles out grants from the $50 million Steve and Michelle Kirsch Family Foundation. In the last five years, he has sponsored -- to the tune of $10 million -- hand-picked causes ranging from cancer research to a project that watches for earth- bound asteroids.
Kirsch isn't alone. In Silicon Valley the tide of Internet wealth seems to be driving more of the cyber-wealthy to philanthropy.
`Some people acquire wealth very quickly, very young, so they go to a financial adviser,` said Cate Muther, who founded the Three Guineas Fund with $3 million in stock when she retired from Cisco Systems in 1994 at age 46. `You get your insurance, you get your investment diversification, you get your portfolio of assets, and you get your foundation.`
That's often the case, agreed Sterling Speirn. As president and chief executive officer of the Peninsula Community Foundation, he sees a lot more 20- and 30-somethings starting large funds on little more than the advice of their financial counselors. Last month, `I had a donor that I'd never met open up a $10 million fund in the wake of an IPO,` Speirn said.
Even if the initial impulse is to avoid taxes, the result is more charity dollars.
The Community Foundation Silicon Valley's coffers grew from $70 million in 1996 to $350 million this year. This last year alone brought $97 million of that total, says Peter Hero, president of the foundation. Three-quarters of those funds are controlled directly by their donors. The Peninsula Community Foundation has seen similar growth.
Twelve percent of Silicon Valley households with more than $100,000 in annual income give through a private or family foundation, according to a 1998 study conducted by Community Foundation Silicon Valley. Another 29 percent channel their giving through a community foundation. In either case, what these tech entrepreneurs are looking for is control.
`After working so hard to make their money, most aren't interested in just doling it out to traditional charities and calling it a day,` said Hero. `They want to see that their money makes a difference.`
`One of the problems with traditional philanthropy is that it tends to be a bit faceless,` said Jeff Skoll, a 34-year-old vice president at the online auction house eBay. `When you give $100 to the United Way or Red Cross, you can't really feel or understand the results of the work.`
That's one reason Skoll opened the $15 million Skoll Community Fund this year. He wants to give his money to people with successful track records like Bill Strickland, whose center has trained Pittsburgh's inner-city youth for 13 years.
Kirsch sends his money straight to the source of causes where he thinks it will have the greatest impact. Last year, he gave $100,000 to the University of Arizona's Spacewatch program, a donation he jokingly refers to as `collision insurance for planet Earth.`
He also gave money and time to lobby the California Legislature for laws favoring clean-running electric cars, and he directly funds cancer researchers whom he believes are doing breakthrough work. Last year, when the Santa Clara County United Way in Silicon Valley experienced an $11 million shortfall due to mismanagement, he and 10 other tech moguls stepped into the gap.
But instead of giving the money to the United Way, they doled it out directly to the local agencies hurt by the shortfall.
The very rich -- and often very young -- could be giving more, said Hero of Community Foundation Silicon Valley.
Though younger people in Silicon Valley are more likely to donate to charity than their national counterparts, the amounts are low compared with their wealth, Community Foundation Silicon Valley found in a 1998 survey. Among those aged 18-24, the survey found that 70 percent donate some amount of money to charitable causes, compared with a national average of 57 percent. In the 35-44 age group, 91 percent in Silicon Valley give versus an average of 69 percent nationally.
Yet, 45 percent of the top earners in the Silicon Valley area give $2,000 or less a year to charity, mostly by writing checks to traditional charities, the survey found. Some 40 percent of those households own more than half a million dollars in assets, not including their homes.
`It's one thing to give $100 if you're someone without a heck of a lot of income, but if you're making $100,000 a year, then writing a check for $100 isn't the same thing,` said Skoll. `I'm not surprised that more people out here give, I just think that the stinginess of the amounts is a little bit surprising.`
Many observers say they don't think techies are really tight. The industry in general and Silicon Valley in particular just lack role models and a culture of giving. That's critical in an industry dominated by the young and an industry that depends so heavily on personal networking where young people look to peers and mentors to model their own lives, said Hero.
The Peninsula Community Foundation recently ran ads in San Francisco Bay Area newspapers looking for donors by asking: `Thinking of starting a family foundation?` The community foundations are beginning to offer services to help donors set up funds -- within the community foundation.
A lot of techies are doing that, said Muther. In fact, she knows of so many that she is working on a family fund `incubator.` Muther's own foundation, which concentrates on increasing economic and educational opportunities for women and girls, sponsors the Women's Technology Cluster, the nation's only incubator for women-owned technology startups.
She envisions something similar for helping private family foundations in the Bay Area.
Muther says she has seen too many foundations languish while their founders concentrate on
running businesses of their own.