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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