Our $1M donation to the United Way of Santa Clara County
In May 1999, Silicon Valley faced the biggest charitable crisis in the over 20 years that I've lived here: an $11M shortfall at the United Way of Santa Clara County. This financial crisis jeopardized the funding of over 100 local social service agencies.
We've never really given much to United Way because our philosophy is to give to causes such as education that can help prevent these problems from happening in the first place. However, because this was by far the biggest crisis in our community in the past 20 years, we took the opportunity to make a $1M donation to help reduce the financial deficit and to set an example that we hoped other wealthy individuals in Silicon Valley would follow.
We did not make the donation immediately upon reading of the crisis on May 1 on the front page of the San Jose Mercury News. We didn't think our donation would be necessary. We thought people who already were United Way donors would respond to the crisis and quickly flood the United Way with donations and support. Surely with all the wealth in this valley, we thought the problem would quickly be solved and maybe even by a single donor. A few of people in this valley can write an $11M check and not even notice the money was missing. And a lot more can write a $1M check and not notice it.
After almost 2 weeks went by and nothing happened, we realized that if something was going to happen, it would have happened already. And it was clear that if the money were to be raised quickly it must be raised in large chunks. So on May 13, we announced our $1M donation hoping that others would follow our lead.
I sent e-mails urging over 65 of my wealthy colleagues in Silicon Valley to help out. Only TWO other individuals came through with gifts of $1M or more from either their personal foundations or from their own pocketbook: Gordon and Betty Moore at $1M (via a personal check), and Bill Gates at $5M (via the William and Melinda Gates Foundation). And Bill doesn't even live here! The remainder came from non personal sources (corporations and other foundations): eBay Foundation ($1M), Hewlett Packard Company Foundation ($1M), Packard Foundation ($2M), Intel Foundation ($1M), Peninsula Community Foundation ($1.2M), and the Health Trust Fund ($1M).
Bill Krause wrote:
That's a perfectly reasonable response. We had the same problems. United Way was not a focus area for us. And we have an annual budget and allocations so an unplanned donation dips into our cash reserve. This was not a problem in our case because our foundation's endowment is big enough to absorb such an unplanned gift. Many others are not as large.
So I had expected to have received responses like Bill's from other CEOs. Unfortunately, Bill and Ann Bowers were the only people to give a good reason for not participating (Ann's funds were already committed for the year).
I did receive responses (via their admins) from two valley billionaires that said "he asked me to pass along to you that he'll be unable to join in this donation with you at this time."
Another mega-millionaire CEO said, "Thanks for the note, but unfortunately I'm not "liquid" enough at this time to participate. With some luck, I will be within a year or so..." After I pointed out to him that he can make the donation at any time because stock donations are not subject to lockup, he wrote back:
One wealthy CEO said that his corporation had already made a large donation. One VC said he wasn't worth enough to join the $1M club yet. Another VC family, Pitch and Catherine Johnson, donated $100K. Many other smaller gifts came in as a result of the example set by the $1M donors.
The anemic response to the United Way crisis made it painfully obvious to us and to others in the valley that we have a major problem here that so many people with the means wouldn't help out their own community in a time of crisis. And it wasn't because of a lack of confidence in the United Way either; we donated to a special "Emergency Fund" that went directly to the affected charities, bypassing any controversy associated with the management of the United Way of Santa Clara.
So there was simply no convenient excuse for not making a donation to help out the community in a time of crisis. If anything, it underscored the results of a recent study on giving in Silicon Valley commissioned by the Community Foundation of Silicon Valley which found that:
The San Jose Mercury News wrote:
I sent Bill a note to thank him for his $5M donation to help our local United Way. Here is his response:
He's absolutely right! There is a real shortage of philanthropists in Silicon Valley. So were helping to recruit more philanthropists into the fold through our work with SV2, press interviews, events at our home, and talks that we give.