I spent quite a few hours over winter break exploring various aspects of the Silicon Valley Community Foundation’s (SVCF) operations and have prepared a series of posts documenting what I have found thus far. This series is intended to provide context for my previous research on Pay for Success pilot programs being rolled out in Santa Clara County, CA, the heart of Silicon Valley (more here). SVCF has played a role in many of these efforts and is a prominent institution in philanthropy whose influence is felt not just in that region, but globally.
It is an overwhelming amount of material, and I struggled with how best to organize it. I have five posts prepared now and expect it may end up double that. This is the third chunk of research I have done on what I am calling the “toxic philanthropy” of Silicon Valley. My first post was on Salesforce and Amazon (here) followed by another on the William and Flora Hewlett Foundation’s efforts to re-engineer philanthropy as a data-driven, tech-mediated enterprise (here).
Before I jump into the thick of it, I wanted to present an overview of ten things to keep in mind as you make your way through this series:
Pay for success impact investing is in the midst of a period of experimentation as venture capital interests attempt to identify the most efficient financial structure they can use to scale this new market sector.
Pay for success runs on massive amounts of personal data. That is the “impact” tracked in outcomes-based contracts. Attempts will be made to convince people that their data is “private.” Even so, it will be used to profile them and make predictions about future behaviors that inform if and how they are able to access services, including education.
The Bay Area is the logical place for such a system to be refined, because it sits at the juncture of venture capital and emerging technologies. It is the entrepreneurs of Silicon Valley who are developing the digital systems that will track people and monitor payments related to social service access and finance. Reducing social care to data that must be tracked on a dashboard is fundamentally dehumanizing for all involved-those receiving services and those providing them.
SVCF is far and away the largest community foundation in the United States and is one of the largest foundations in the country. Its assets have grown enormously in recent years as tech billionaires have funneled donations of appreciated stock and crypto-currency into donor-advised funds. A substantial percentage of its assets are in Facebook stock.
Since its creation in 2007, SVCF has directed hundreds of millions of dollars to organizations that seek to privatize public education, including charter schools and educational technology ventures.
Its influence lies not only in the grants it awards, but how it invests the $13.5 billion in assets it manages. Increasingly, these assets are being directed into social impact investing.
Globally, community foundations are being integrated into the social impact investment program. They leverage knowledge of local operating environments to advance unproven financial strategies that would be deemed too risky if proposed by organizations with less established reputations. They are the deal makers. That is the role SVCF has played with Pay for Success in Santa Clara County.
Community foundations enjoy special benefits under IRS law. They are not required to disburse funds annually, which means they can hold onto assets until favorable conditions arise. They are also able to obscure the specific source of donations, since grants from DAF funds list the sponsoring organization as the donor, not the owner of the fund itself.
SVCF is an example of a foundation that is sending a significant portion of its grant awards outside the region and even outside the United States. It may be doing this to secure investment opportunities that yield “impact” more readily than projects closer to home.
This form of philanthropy is neither humane, nor charitable. It deploys patient capital to prop up markets for predatory ventures that are intended to derive profit from the poor. Historically oppressed communities of black, brown and indigenous people will experience significant harm as they are subjected to digital surveillance and dispossession imposed under the banner of “charity.” Many of these “charitable” ventures in Silicon Valley have ties to the Catholic Church and even the Vatican. In this 400th year since enslaved Africans were brutally taken from their homelands by settler colonists and sold into bondage in Jamestown, it merits considering if we are seeing the “Doctrine of Discovery” play out once again as we cross into a new age of digital empire.
Part One: Silicon Valley’s Social Impact Deal Maker
Part Two: To Serve Man: It’s A Cook Book!
Part Three: Philanthropy’s Lesser Known Weapons: PRIs, MRIs and DAFs
Part Four: Charter, Public Health and Catholic Charity Interests Help Launch “Disruptive” Pay for Success Program
Part Five: When Community Foundations Go Global (Or Coastal)