How the Silicon Valley Community Foundation’s Encouraging Donors to Actually Give in the Region

A few months back, I spoke with Alexa Cortés Culwell of the San Mateo-based strategic advisory firm Open Impact and co-author of “The Giving Code,” a 2016 report exploring the philanthropy of Silicon Valley funders.

The report found that a significant portion of the region’s wealthy socked their money into donor-advised funds (DAFs) and postponed active giving for a later date, while those who did reach for their checkbooks directed their support to organizations located outside of the Valley and Bay Area. The national press picked up the report’s findings, which cultivated the perception that the region’s gilded class was indifferent to tackling local challenges.

This narrative resonated with Nicole Taylor, who has spent most of her professional career working for nonprofit institutions in the Bay Area. In 2018, she assumed the role of president and CEO of the Silicon Valley Community Foundation (SVCF) after her predecessor, Emmett Carson, stepped down amid accusations of permitting a toxic workplace.

Taylor told me her primary goal was “putting the ‘community’ back into the community foundation.” In 2019, she and her team embarked on a strategic refresh of the SVCF’s priorities with help from the Bridgespan Group. The findings reshaped the foundation’s discretionary grantmaking and informed its efforts to encourage donors to disburse money parked in DAFs to regional organizations during a tumultuous 2020.

So far, Taylor’s efforts have paid off. SVCF raised $65 million across its seven COVID response funds and the foundation’s average payout rate across all donors in 2020 was a healthy 18.7%. In October, SVCF announced it had distributed $1.4 billion in grants during the first three quarters of the year, a “vast majority” of which came from advised funds. Of that amount, $464 million flowed to Bay Area organizations— a 13% increase compared to the same period in 2020.

“We hear the criticism that donors haven’t done enough to support community organizations,” Taylor said. “But we’re seeing the exact opposite.”

A strategic refresh

Taylor grew up in Southern California and received her M.A. in education and A.B. in human biology from Stanford University. She began her career as an educator in the Oakland public school system and spent more than 15 years with the East Bay Community Foundation, where she eventually served as president and CEO for six years. She has also served in senior roles at Stanford, Thrive Foundation for Youth, and, most recently, the Arizona State University Foundation.

In 2019, as SVCF partnered with Bridgespan to conduct its strategic planning process, Taylor created an advisory council that conducted town halls, interviews and design labs with board members, staff, donors, community leaders and nonprofit partners.

The council identified four key pillars of work: reducing systemic disparities, supporting strong and engaged communities, growing the culture and practice of effective philanthropy, and being a trusted and enduring institution for the community. The new strategy seeks to put the region’s most vulnerable populations—low-income households, immigrants and communities of color—at the center of SVCF’s grantmaking.

The foundation also pledged to ramp up general operating support and capacity-building grants. “We needed to focus on movements, leaders and communities,” Taylor told me, and flexible funding “lets them build their own power and start their own path.”

A slate of new programs

The council officially wrapped up the planning process in March of 2020, just as the region was locking down. “We leaned into the shift overnight because our community was in crisis,” Taylor said. The foundation immediately implemented action items from the strategic planning exercise, like simplifying applications and reporting requirements for its COVID-19 Regional Nonprofit Emergency Fund.

In the summer of 2020, following the murder of George Floyd, SVCF joined 20 other funders to began planning the five-year, $100 million California Black Freedom Fund to support Black power-building and movement-based organizations working to eradicate systemic and institutional racism. (Check out Taylor’s co-authored IP guest post on how philanthropy can make a lasting commitment to racial justice.)

In late 2020, SVCF launched the Community Catalyst Fund, which provided funding to organizations serving BIPOC and low-income communities following the general election. It also created a Community Action Grants Program in response to recommendations from community partners during its strategic planning process. The initiative uses a racial justice and equity lens to identify and support organizations “that foster greater creativity and help build community and power to promote a just, equitable and inclusive Silicon Valley.” Organizations can request general operating or program support grants through the Community Action Grant program.

Getting donors on board

Of course, SVCF’s discretionary grantmaking is only a small part of the larger funding equation. As of 2020, $10.1 billion of SVCF’s assets were held in corporate- and donor-advised funds, representing 82.7% of the foundation’s total assets.

DAF holders enjoy generous tax breaks, but are not required to make annual payouts—unlike private foundations, which are required to disburse 5% of their assets each year. This has led a growing number of critics to call for legislative reforms that would compel donors to give a percentage of the fund’s balance to working nonprofits annually. And when critics set their sights on DAFs, they often mention the Mountain View-based community foundation, where numerous tech billionaires have stockpiled huge sums of money in such funds.

Taylor joined SVCF against this charged backdrop with the goal of galvanizing regional giving from disengaged individual and corporate donors. To do so, she modified the pitch by adopting familiar Bay Area parlance. “In this region, if you look at how private equity invests in companies, they don’t say, ‘Okay, we’re just going to invest in this one department inside the company, and then wait and see if it impacts other parts of the company.’ They invest in the entire company. So when I talk to donors, I encourage them to support the entire organization, not parts of the organization.”

When the pandemic hit, donors who had been disconnected from community organizations were forced to pay attention. “Schools and businesses were closed,” Taylor said, “and so many nonprofits were teetering on the brink of shuttering.” Then, in May, George Floyd was murdered. “There were so many calls for justice and equity,” Taylor said. “Donors and our corporate clients understood the importance of making a shift. The question donors were asking was, ‘What should we be doing?’”

Facilitating engagement

The region’s donors wanted to give. The challenge for Taylor and her team was helping donors decide which causes and organizations to support.

SVCF began rolling out donor and community webinars in March 2020 to address the pandemic’s effect on fields like early childhood development and local journalism. As the 2020 election approached, the foundation launched webinars on the importance of getting out the vote. At one point, the foundation was hosting webinars every two weeks and getting, on average, 200 virtual attendees per session.

The webinars caught the attention of one of Silicon Valley’s largest funders, John Sobrato, who successfully encouraged Taylor to launch a webinar on how the pandemic was impacting the region’s undocumented immigrants. (In July 2020, Sobrato went a step further, contributing $5.2 million to seed his own $9 million Immigrant Relief Fund for San Mateo County.)

The foundation also published online Giving Guides to educate donors on key issues and local organizations. For example, the Latinx Giving Guide explains how COVID-19 disproportionately affected the region’s Latinx community and allows donors to sort organizations by county and by cause.

The foundation recently published its “2021 Year End Giving Guide,” which highlights organizations based in San Mateo and Santa Clara whose work aligns with SVCF priorities like early childhood development, financial stability, housing and safety-net services.

The guides’ verbiage accentuates SVCF’s role as a trusted intermediary between donors and the organizations doing the work. “Donors know we have the relationships, and I think it makes it easier for them to give so they don’t have to figure it out on their own,” Taylor said.

Taylor and her staff also used email outreach and video to encourage donors to dig deeper. “At the onset of the pandemic, I asked our donors to commit at least 5% more of the assets in their donor-advised funds than they had initially planned for the year, for pandemic relief,” she said.

As 2020 progressed, issues like racial justice and the California wildfires began to take center stage, and by the fall, COVID case numbers were beginning to tick upward. In October, Taylor and her team went back to donors and “asked them to give up to an additional 5% more from their funds to address what our communities were facing.”

Promising regional trends

This year brought a spate of new announcements. In February, SVCF publicly launched the California Black Freedom Fund (CBFF). In its first round of grantmaking, the fund distributed $6.35 million to three networks that reach over 50 Black-led organizations across California.

In May, the foundation launched the LatinXCEL Fund in partnership with the Castellano Family Foundation. The initiative calls for increased funding for Silicon Valley’s Latinx community leaders and Latinx-led nonprofits through targeted, long-term investments. A month later, the CBFF announced its second round of grantmaking—$8.91 million to 74 Black-led organizations. The fund has raised $59.6 million to date.

All of which brings me back to the foundation’s October press release announcing that it disbursed $464 million to over 4,500 Bay Area organizations across Q1-Q3 in 2021.

“Last year, our donors and corporate partners gave more than they’d ever given before, and it is wonderful to see similar generosity in 2021 as we continue battling the pandemic, wildfires, inequity and more,” Taylor said in a press release. “Our donors gave more to the Bay Area than to any other region, demonstrating their commitment to the communities where they live and work.”

A week later, my colleague Martha Ramirez wrote a piece on the Magnify Community, a nonprofit that launched in 2018 with the goal of catalyzing $100 million in giving to Silicon Valley organizations by fall of 2023. Designed as a three-year program, Magnify sunsetted on September 30 and is now unpacking what it learned.

“In total, participants have pledged to increase their local giving by $47 million through 2023, so well short of the $100 million goal,” Ramirez wrote. “However, in 2020 alone, pledgers did report that they increased local giving by $35 million. In total, pledgers donated $118 million to local causes that year, although this doesn’t represent additional funding generated.”

Catherine Crystal Foster, Magnify’s co-founder, president and CEO, told Ramirez that Magnify helped to establish a new barometer around regional giving. “The $100 million is not the point,” she said. “The point is that local donors have a new recognition of the needs in their own backyard, the outstanding nonprofits making this a better place for all, and their role as donors and leaders in this community.”

Focusing on an equitable recovery

Given these developments, are the takeaways from Open Impact’s 2016 report “The Giving Code” still relevant? As you’d expect, the answer to that question lies in the eye of the beholder.

The report’s co-author, Alexa Cortés Culwell, told Ramirez that giving in the Valley is and isn’t changing. “You have all of these growing organizations and efforts to help donors, and that’s working,” she said, “but the scale of the philanthropic assets, the amount of money donors can give, is kind of outpacing our efforts to help them give it away.” (Open Impact was not formally part of Magnify Community, but it did help create an implementation plan based on its findings.)

To Culwell’s point, SVCF’s support for local organizations in the first three quarters of 2021 represented an encouraging 13% increase over the previous year. That said, the amount ($464 million) constitutes 33% of the $1.4 billion in total funding dispersed by the foundation during that period. I suspect the region’s nonprofit leaders feel that number should be a lot higher, especially when the S&P 500 is up approximately 73% since March 1, 2020 and SVCF donors have $10 billion and change parked in DAFs.

All that said, the perspectives of Culwell, Foster and Taylor provide cause for cautious optimism moving forward. Having lived through the tumultuous events of 2020, the region’s donors are more attuned to the work of local organizations than ever before, and SVCF donors can now access a wealth of information to help them select local organizations to support. We’re also seeing the Valley’s funding leaders sketching out a vision in which philanthropy can facilitate an equitable recovery in the region.

For instance, in late November, Open Impact, the David & Lucile Packard Foundation and Northern California Grantmakers published a report geared toward philanthropic leaders and high-net-worth individuals titled “Get It Right: 5 Shifts Philanthropy Must Make Toward an Equitable Region.”

Taylor, in addition to leading SVCF, has served as co-chair of San Jose Mayor Sam Liccardo’s Recovery Roundtable and participated in a webinar hosted by research group Joint Venture Silicon Valley called “Building Back Better: Silicon Valley’s Path to Recovery.” The SVCF is currently working with partners from higher ed, nonprofit, philanthropy, government and private sectors to identify approaches to build back a more equitable region. Taylor told me that issues like affordable housing, economic stability and mobility, and early childhood education will be central to these conversations.

“All of this work has a race and equity lens to it and helping communities build and exercise their own power,” Taylor said. “It’s about allowing people to chart their own path.”

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