Being greedy and unresponsive about accessibility is not the limit to
their greediness by the billion Aires in silicon Valley.  The story below
explains the other side of the story that we rarely hear about.  This is
the other side of the digital divide.

   kelly

   Let Them Eat Microchips
   
   Despite the much-lauded studies that showed Silicon Valley has grown a
   conscience, corporate giving has not kept pace with corporate
   profits--or the valley's skyrocketing cost of living
   
   By Michelle Goldberg
   
   IT'S THE DAY BEFORE Thanksgiving on the east side of the richest area
   in the world. A line of families snakes through a church parking lot
   waiting with glum, resigned faces for paper bags containing turkeys,
   canned cranberry sauce, generic sandwich cookies and other holiday
   foods. Seventy-two-year-old Gwen Peters, the tiny, bustling woman in
   charge of San Jose Neighbors That Care, is relieved that a last-minute
   shipment from the Second Harvest Food Bank means no one will have to
   leave without a bird for tomorrow's dinner.
   
   All the same, for Peters, like those heading many grassroots San Jose
   nonprofits, the famed prosperity in the area hasn't made their jobs
   any easier. Somehow, Silicon Valley's boomtown riches haven't filtered
   down to Peters' all-volunteer charity, even as skyrocketing rents have
   made people increasingly desperate for her services. Donations are
   down 20 percent, she says. This year, San Jose Neighbors That Care
   took in a mere $50,000 compared to $70,000 in 1998. Peters and the
   charity's other volunteers stretched it to distribute food to 17,000
   people, buy new coats for 500 kids and new shoes for 765.
   
   Peters herself is raising a 4-year-old girl, Veronica, whose mother
   gave birth while serving a prison sentence and is still unable to care
   for her, and Peters is hoping to establish a trust fund to provide for
   Veronica's future. But even Peters' commitment is no match for the
   ever-growing needs of the poor in the most economically stratified
   region in the country. While nonprofits are certainly receiving more
   high-tech money than they used to get, they're definitely not getting
   enough to deal with all the fallout from the new economy.
   
   Giving Back the Silicon Valley Way
   
   IN THE PAST FEW YEARS, a number of reports and articles have attempted
   to topple Silicon Valley's long-held reputation for stinginess. A
   pre-holiday November 1998 report on philanthropy in the valley by the
   Silicon Valley Community Foundation happily concluded that Silicon
   Valley residents give as much or more to charity as those in other
   parts of the country and that corporate giving is actually on the
   rise. "Those who contribute to charity in Silicon Valley give an
   average of 2.1 percent of their incomes compared to 2.2 percent
   nationally, a statistically insignificant difference," said the
   report, "Giving Back the Silicon Valley Way." "There is also no
   significant difference from the national averages at any income
   level." When the tech titans bailed out the United Way last year, many
   declared that Silicon Valley had finally gotten a conscience.
   
   But behind this good news is the troubling reality of local nonprofits
   struggling to take care of the increasing numbers of people left
   behind by the area's radical growth. And Silicon Valley tycoons are
   not quite as generous as the report initially suggests. In its final
   analysis, the report concedes that corporate giving simply hasn't kept
   pace with astronomical increases in corporate profits. As Kristen
   Philipkoski reported in Wired News, only two Silicon Valley
   companies--Intel and Hewlett-Packard--were included on Worth
   magazine's recent list of the top 50 corporate donors. No Silicon
   Valley company made American Benefactor's 1998 list of "America's 25
   Most Generous Companies." Additionally, corporate employee service on
   nonprofit boards fell 13 percent between 1994 and 1997, and some
   charities report that in the context of boom-time 12-hour workdays,
   they now have to struggle to find people who can sit on their boards.
   Nor are rich individuals picking up the corporate slack--according to
   the Community Foundation report, one-third of households that earn
   more than $100,000 a year give $1,000 or less each year to charity,
   and 45 percent of the area's richest donors give only $2,000 or less
   annually.
   
   Meanwhile, as rents have skyrocketed, the demand on homeless shelters
   and food banks has increased significantly. Maury Kendall,
   communications manager for the Emergency Housing Consortium, the
   area's largest shelter operator, says that life has gotten much harder
   for the poor in Silicon Valley, and increased funding has barely kept
   pace with increased need. "The impact of the valley's transformation
   into a breeding ground for dotcom millionaires has been severe on the
   working classes," he says. "Homelessness-related charities are
   probably feeling the impact of Silicon Valley growth more than any
   others." EHC shelters are seeing more families than ever before,
   Kendall says, and it can't meet the need. Between six and 10 families
   have to be turned away each week, and there are 125 families on the
   waiting list for one temporary housing program that has just 10
   places. "The shocking increase in the number of homeless families in
   the last five years has been almost exclusively due to the rise in the
   cost of housing," Kendall says.
   
   Jan Bernstein, community relations manager for InnVision homeless
   shelters, is seeing the same situation. "The flip side to the economic
   good times is that everything gets more expensive," she says. "For
   InnVision we've seen our numbers [of clients] go up, because wages at
   the low end of scale have not gone up to match housing." A joint 1998
   report by Working Partnerships USA and the Economic Policy Institute
   shows what Bernstein is talking about. According to "Growing Together
   or Drifting Apart? A Status Report on Social and Economic Well-Being
   in Silicon Valley," "Wages for the bottom 25 percent of the workforce
   have actually declined by more than 13 percent in inflation-adjusted
   terms since 1989." At the same time, the report says, average rents
   have increased 28 percent in the last four years.
   
   "The good news is that people have money to give and that some are
   starting to look at what they can do, but it certainly hasn't kept
   pace with the rate of economic growth," Bernstein says. This summer,
   InnVision had to cut hours at the Commercial Street Inn, an emergency
   shelter for homeless women and children, because of a funding
   shortage--they've only recently restored them in time for the cold
   weather. "It seems that if there's any place that we can solve these
   problems, it should be here," Bernstein says.
   
   Some people in Silicon Valley are even going hungry. "The food banks
   are seeing people more times a month," says George Manalo-LeClaire,
   senior policy analyst at California Food Policy Advocates. Many
   families spend their entire income on rent, says Manalo-LeClaire, and
   "food stamps last two weeks at the most. Then they've got nothing for
   that month, so they're relying on food banks, and the food banks just
   can't provide. We can bet that in Santa Clara County, 4 percent of
   people are experiencing the physical pains of hunger." According to
   Second Harvest, the area's largest food bank, the average family
   seeking emergency food spends nearly 70 percent of their income on
   housing.
   
   Gwen Peters
   Photograph by George Sakkestad
   
   Who's Naughty and Nice: Gwen Peters of San Jose Neighbors That Care
   stands by toys and food donated for the holiday season, but the level
   has been less than what many agencies hoped for.
   
   Trickle-Down Trickery
   
   IF THE RICHEST AREA in the world is reasonably generous, how can that
   be? One answer is that while a lot of money--$49 million in 1997,
   according to the Community Foundation--is being given away in San
   Jose, changing patterns of foundation giving and entrenched
   entrepreneurial values sometimes prevent the money from reaching the
   people who need it most. In a Dec. 12 front-page story headlined
   "Prosperity Yields a Lag in Charity Towards the Poor," New York Times
   reporter Peter T. Kilborn wrote that while overall donations are up 11
   percent nationally since last year, about 90 percent of the money goes
   to "religious organizations, some of which operate services for the
   poor, and to other organizations that cater mostly to the rich and the
   middle class like the opera, ballet, museums and universities."
   Kilborn reported that according to Giving USA, an organization that
   tracks philanthropy, contributions to traditional human services
   charities represented just 9.2 percent of all giving last year, down
   from 13.9 percent in 1970.
   
   Tech millionaires that get involved in philanthropy tend to focus
   their money on education and job-training programs rather than
   old-fashioned charity--they want to tackle problems that they can fix.
   The buzzword is "venture philanthropy," a form of giving that's
   modeled on venture capitalism. "The culture in this valley is one of
   results. I think people have high expectations and high standards,"
   says Carol Welsh Gray, director of the Center for Venture Philanthropy
   in San Jose. "They want to know what the return on their investment
   is. They expect accountability for the results process the same way
   they would in their work. They want their philanthropy to line up with
   their values in the same way as in their work." As a 1998 San
   Francisco Examiner story put it, "Across the board, U.S. companies
   want more bang for their community relations buck--and expect their
   charity programs to live up to their own business standards of
   efficiency and results."
   
   The first effort of the Center for Venture Philanthropy, for example,
   is the Assets for All Alliance, which Gray describes as a "five-year
   plan to invest in low-income families and help them develop the goals
   of college education, starting or managing a business, starting a
   retirement fund or buying a home." Enrollees attend money management
   classes and are required to deposit a certain amount in a savings
   account every month. The program provides double matching funds. "If
   Jose puts away $20, $40 goes into a parallel account that goes toward
   their goal, up to a maximum of $6,000," Gray explains. If Jose misses
   too many payments, though, he's dropped from the program and the money
   in the parallel account goes back into the program.
   
   This philosophy helps explain why charities that serve people with
   little prospect for social advancement aren't benefiting from Silicon
   Valley's economic windfall. Wanda Alexander, the executive director of
   Act for Mental Health, an organization that serves developmentally
   disabled and mentally ill adults, says that hardly any of the area's
   riches have trickled down to her group. "The problem I see with the
   money giving is that, while Hewlett-Packard has been wonderful, many
   companies are very restrictive for what they will give money for,"
   says Alexander, who is also a clinical social worker. "They want to
   give money for things like education and training, which is
   understandable in a way. Our problem is that the population we serve,
   many are people with emotional handicaps or residual mental illness,
   or who've been in trouble with the courts or with drugs. They can work
   to a limited extent, but not to the high productivity pace that the
   valley requires. Ninety-nine percent of our population is at the
   poverty level or below. We find it difficult to get understanding from
   mega-corporations that this population needs a way to feel more
   human."
   
   Like most of the people involved in the nonprofit sector, Alexander
   doesn't think that people in Silicon Valley are callous or
   stingy--it's just that the area's hyperkinetic work culture leaves
   little room for values that run counter to pure capitalism.
   "Volunteering is down for us," she says. "It's hard to find people who
   have time to be board members or to work for an agency or the
   community. We have a younger group on our board, and they're pulled in
   10 different directions. They get transferred or move. Companies say
   they give personnel, but I don't know how you get that accomplished,"
   she says. "It's very tough, because the pace of the valley is so
   intense that people in the Silicon Valley industries don't have time
   to think about their own family relationships, so how are they going
   to think about someone in another income strata?"
   
   Mike Perez
   Photograph by George Sakkestad
   
   Bowled Over: Mike Perez enjoys a bowl of hot soup at the Julian Street
   Inn. Workers at local shelters say the number of those in need is
   soaring because of the high cost of housing.
   
   The Cuteness Factor
   
   MARK OSAKI, director of development at Second Harvest, confirms
   Alexander's analysis of the trends plaguing small nonprofits. "A lot
   of foundations are now focusing strictly or primarily on children's
   needs or education," he says. "Before, a lot of your local charities
   could always depend on something from a foundation. Nowadays, partly
   because boards of directors for foundations are trying to increase
   their impact, foundations are concentrating on two or three areas, and
   if you don't fall within those criteria you're out of luck."
   
   Giving is up, says Osaki, "but it's much harder for social service
   agencies to get funding because the funding is becoming so restricted.
   Those agencies that serve people with mental disabilities, that's
   where money is needed tremendously, but it's very difficult to find
   that kind of funding."
   
   This is where the philosophy of venture philanthropy becomes a
   problem. "It's much easier for us because we have such a direct
   benefit," Osaki says. "If we get a dollar, we can leverage it to get
   13 dollars worth of food." Services for the mentally ill are much more
   difficult to quantify, though, "so it's much harder to make the case
   for the programs."
   
   Paulina Borsook, a former Wired contributing editor and the author of
   the upcoming book Cyberselfish: How the Digital Elite Is Undermining
   Our Society, Culture, and Values, believes that part of the problem is
   that the values of business and engineering culture often clash with
   those of the social service sector. "I wouldn't rate MBAs and geeks as
   high in empathic imagination. They don't have an understanding of how
   someone could be in need or socially vulnerable," she says.
   
   "The social investment stuff--on the one hand it's great because it
   says, 'Let's look at programs that work.' But there's this MBA
   free-market mentality and engineer we-can-tweak-it mentality which
   leads to the fantasy that all problems are fixable. If you just throw
   a copy of Photoshop at a fifth-grader, it will solve all her
   problems."
   
   Borsook points out one of the biggest problems with philanthropy in
   the valley is the let-them-eat-microchips idea that computers can
   solve all the ills of the poor. According to Peter Hero, president of
   the Community Foundation of Silicon Valley, 48 percent of local
   corporate giving is in the form of product. What that means is that
   much of the lauded charitable increases of the last few years stem
   from companies giving away their old computers, many of them to
   schools. "If you are a director of a homeless shelter, it's
   discouraging to see so much corporate giving that is product and so
   much that goes to support the public school system, which anywhere
   else in the U.S. is supported adequately by the government," Hero
   says. "It's another challenge."
   
   The most cynical explanation for companies' propensity to donate
   product is that they're reaping big tax breaks while developing a new
   generation of loyal customers. Borsook has a more generous
   interpretation--she calls it the cat/dead-rat syndrome. "If a cat
   really loves you, it will give you a dead rat whether you want it or
   not," she says. "In the same way, geeks will say, 'Let's throw
   computers at problems--this is what we love, how can you not love it
   too?' "
   
   Throwing Computers at The Problem
   
   BUT THERE ARE plenty of reasons for nonprofits not to love computers.
   Despite the promise of opportunity, their clients have found that
   breaking into the technology sector often isn't enough to get out of
   poverty. In this brutal housing market, many of the homeless are
   already gainfully employed, while others are facing obstacles far too
   great to be surmounted by HTML. "Easily" 40 percent of the people who
   use the Emergency Housing Consortium already have jobs, Kendall says.
   "Far too many of them are working what in any other area would be jobs
   that would create enough income to support housing and a family. You
   can easily have good computer skills and still be homeless--we have
   lots of proof of that here."
   
   For example, Tracey Lovett, 34, has been living at an EHC shelter with
   her 4-year-old son for almost three months, despite the fact that
   she's been working full time for the past month in accounts payable at
   QuadraMed, a Silicon Valley company that specializes in software and
   consulting for the healthcare industry. A smiling, extremely
   articulate woman in a neat brown turtleneck, she knows Microsoft Word,
   Excel and Oracle and earns $11.50 an hour plus benefits, easily enough
   to get out of homelessness in most cities. But she and her boyfriend,
   who earns $13 an hour at the San Jose Medical Center, haven't been
   able to find anywhere to live.
   
   "We've been filling out so many applications, but my boyfriend has
   really yucky credit, and landlords want you to earn three times the
   rent, so we've been getting rejections," Lovett says. "They judge you
   on your past. We're telling these people we will even pay double the
   amount of whatever they want for a deposit on top of the rent, because
   there are programs that, once you find stable housing, will help you
   with your security deposit. What more can we do?" The cheapest
   apartments Lovett has seen are $1,000-a-month one-bedrooms "in the
   worst, most torn-down apartment complexes San Jose has to offer." Even
   if she finds a place for around $1,000, she says she'll probably have
   to rely on food banks to feed herself and her son, at least for a few
   months.
   
   Sitting with Lovett is her friend Petra Lozano, 23, who's spending her
   second night at the shelter after being thrown out of her mother's
   house, where she'd been staying while finalizing a divorce. There was
   no room in the families' section of the EHC shelter, so she left her
   6-year-old daughter at her sister's house and took a bed in the
   sprawling single-adult shelter, where men and women are separated by
   nothing more than office dividers. Lozano makes $11 an hour working in
   accounts payable at Diamond Multimedia (recently bought by S3) and
   will be starting school in January at San Jose City College, but, like
   Lovett, she's not sure how she's going to parlay her salary into the
   $3,000-plus required to secure an apartment. She's been accepted into
   a temporary housing program in Milpitas, where she and her daughter
   can stay in a studio for two weeks, "so at least I can give my
   daughter a Christmas." After that, she's not sure what will happen.
   
   Kendall, of course, doesn't want to dismiss the value of
   technology-training programs. There are some that work, he says, but
   only if they have comprehensive job-placement plans that can move
   people into positions that pay enough to afford the huge deposits and
   high rents required to live in the area. For example, Kendall lauds
   Cisco Systems, which is opening a training academy for networking
   technicians in an Emergency Housing Consortium shelter. "Until now,
   all these labs have been in high schools, community colleges and
   technical schools," Kendall says. "The first one not to be in a school
   is going to be located in Silicon Valley's biggest homeless shelter.
   It's very cool and it's the way it should be." Of course, such
   programs require more than just old machines--they require teachers
   and administrators.
   
   Jeff Goodell, author of the forthcoming book Sunnyvale: The Rise and
   Fall of a Silicon Valley Family, published an article in Rolling Stone
   last month about the class divide in Silicon Valley in which he
   interviewed several workers at high-tech companies who slept in
   homeless shelters. "There's this engineering hubris that all kinds of
   problems can be solved on a whiteboard. It's a way of distancing
   oneself from problems, a way of intellectualizing them. These are
   really complicated problems. The forces against these people are huge,
   and they're just not going to be solved by some sort of magic, 'Oh,
   we'll put a computer in a shelter and everything will be OK.'"
   
   In some cases, Goodell says, old computers can cause nonprofits more
   problems than they solve. "That whole dumping of old computers on
   people, it's a nightmare, it doesn't work. There are the complications
   of setting them up and getting them running. It's that whole sort of
   silly fantasy that all you do is put a computer in a classroom and
   kids are measurably smarter. It's really simplistic thinking."
   
   Illustration
   Illustration by Steven DeCinzo
   
   Emotional Rescue
   
   COMPUTER SKILLS classes won't do much good for people like Robert, a
   middle-aged client of Act for Mental Health. Robert worked as a
   programmer at Stanford until he was laid off in 1991. He claims to
   have an IQ of 150, and there's little reason to disbelieve him, but he
   also has physical and mental problems that have made it impossible for
   him to find work. "I have 20 years' experience computer programming
   but no wants to hire me," he says angrily.
   
   At first, he says that his problem is that he doesn't have the right
   kind of experience for today's companies. "They usually want three or
   more years' experience putting up commercial shrink-wrapped products,
   and all my programming is supportive research and that kind of stuff,"
   he says. Laid off during the recession of the early '90s, Robert says
   that no one was hiring between 1991 and 1993, and by the time economic
   recovery set in, "no one was willing to hire someone who'd been
   unemployed two years."
   
   While what Robert says is plausible--Borsook points to the "ruthless
   age discrimination" in high tech--he also has serious emotional
   problems that neither computers nor training can solve. "There are
   agencies that are supposed to help people get jobs despite their
   disabilities, but none of them have been able to help me," he says.
   "The California Department of Rehabilitation qualified me for their
   services, but then they said they couldn't help me. They say I'm too
   disabled, I don't have enough social skills to work in an office
   environment." They may have been right. During our interview, he
   announces several times that he's never had a friend in his entire
   life. He abruptly asks me for a hug and then accuses me of feeling
   sorry for him. Even with Silicon Valley's low unemployment rate, it's
   unlikely that Robert will find work any time soon.
   
   Right now, what he needs isn't a computer--he needs cash. He receives
   a monthly check from the government, but it was cut a few years ago
   and now it's not enough to pay his rent. Right now, he survives on
   credit cards, signing up for as many as he can and then paying the
   minimum amount each month. Unless someone intervenes he'll eventually
   become homeless.
   
   People like Robert, who can't easily be integrated into the economy,
   are precisely the kind of person likely to be overlooked by the new
   breed of results-oriented Venture Philanthropists. Sometimes, after
   all, people can't pull themselves up by their bootstraps. They just
   need to be cared for. Old-fashioned charity may be outmoded, but it
   did recognize that reality. "I can tell the 50-year-old woman in the
   wheelchair with a myriad of medical complaints to go get a job, but it
   would just make her cry," Kendall says. "She's doing the best she can,
   we're doing the best we can for her. There has to be some provision,
   some remembrance of every member of the human family."
   
   In Search of the Measurable Result
   
   THAT'S NOT TO SAY that Venture Philanthropy-style programs aren't
   valuable, just that they only work for those who already have some
   potential for upward mobility. Assets for All, which currently has 53
   people enrolled, certainly has the potential to change lives, but only
   those who have at least a few assets to start with. One danger of
   Venture Philanthropy is that, if giving is tied to an organization's
   success rate, charities may be more likely to serve those most likely
   to succeed. "We could increase our success rate by only concentrating
   on the clients most likely to have success," Kendall says. "I think
   that's our challenge, to stay true to our roots and our mission. Maybe
   some new nonprofits will come along based simply on a business model
   with fairly rigid standards of capitalistic thought behind them, but
   they will always be outnumbered by those of us that just want to work
   for the social good."
   
   As ACT shows, though, some charities that just want to work for the
   social good may be left behind in the new order. "For people in
   business, I don't think the bottom line includes human values or human
   quality of life," ACT executive director Alexander says. "The bottom
   line is money. That's a sickness of our culture, that money's the only
   value. Even ecological things have to be counted in terms of economic
   value. I don't think it's going to change. You can be righteous and
   say they owe humanity something, but not with that value system." As
   that value system spreads more and more into philanthropy, those who
   serve the poorest of the poor may find they just can't compete.
   
   From the December 16-22, 1999 issue of Metro, Silicon Valley's Weekly
   Newspaper.
   
   Copyright © 1999 Metro Publishing Inc. MetroActive is affiliated with
   the Boulevards Network.


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