Are Silicon Valley Nonprofits Thriving in California's Economy?

By Maya Bur

You might think that a thriving Silicon Valley has boosted California’s economy in every region and sector, but there is one group in the region that hasn’t benefitted: The nonprofit sector. That’s according to a study, “The Giving Code: Silicon Valley Nonprofits and Philanthropy.” In it, authors Alexa Cortés Culwell and Heather McLeod Grant show how the tech boom has affected Silicon Valley nonprofits and big-business philanthropy. Here are some of their key findings:

• Despite being home to 46 percent of U.S. venture capital and 64,000 new jobs in 2015, nearly 30 percent of Silicon Valley residents require a form of public or private assistance.

• The region is home to the biggest income gap in the country, with the average low-skilled worker making $26,624 and the average high-skilled worker $121,638.

• In 2015, nearly 15,000 people moved into Silicon Valley. Eighty percent of nonprofits say they’ve had increased demand for their services in the last five years, and 50 percent say they are unable to meet current demand.

• From 2008 to 2013, Silicon Valley-based individual giving increased from 1.9 billion to 4.8 billion, rising by 150 percent. Only 7 percent of this was directed toward local nonprofits, and only 3 percent went to community-based organizations that address local needs.

Silicon Valley’s growing upper class is paired with an increasing income gap. That means heavier pressure on nonprofits to support local communities facing increased rents, spikes in the housing market and an overall rise in the cost of living. While the region’s upper class has increased its giving, little of it has gone to local organizations. Furthermore, more than half of that goes to non-community-based organizations such as local hospitals, private schools, and universities—causes that do not have a direct impact on local residents in need. With donors mainly funding large-scale, national nonprofits, they’re forgetting the good they could be doing by supporting org-anizations in their immediate surroundings. Only when donors support local communities in need will Silicon Valley prosper as a whole.

Download the full study at goo.gl/nR2ZFt for more details.