Affluence of Silicon Valley does not reach its charities

Silicon Valley may be one of the wealthiest regions in the world, but the industry that fuels that affluence does little to spread it beyond the personal bank accounts of its executives and employees. Technology companies, with a few gracious exceptions, are disgracefully tightfisted.

That is not even considered to be an inflammatory statement in the land of juicy bonuses and obese stock options; it is simply accepted as fact.

Every year the regional papers feature stories on the failure of some fund-raising effort in which charity workers bemoan the bland indifference with which astonishingly profitable tech companies receive their pleas for financial help.

Everyone agrees the situation is shameful and must change. Little changes. This time around, the story is front page stuff, impossible to ignore, and so brimming with pathos that some big name companies were persuaded to dig deeply, for $5 million (€5.3 million) in Microsoft CEO Bill Gates and his wife Melissa's case, for example, to help sort things out. However, those big charitable gestures have obscured the ironic fact that the crisis for which the bailout money is needed came about because of the stinginess of technology companies, which pledged big donations to a major charity over a four-year stretch, then failed to pay up. That resulted in a massive $11.7 million shortfall for the Santa Clara, California, chapter of the United Way, an organisation which takes in donations and then distributes the cash to a range of local and national groups.

In the case of the Santa Clara chapter, some 106 organisations, ranging from homeless shelters to camps for children to support groups for the elderly, received United Way funding. The charity is a fixture in many US workplaces, where companies often arrange to match the donation of individual employees.

Employees like the fact that companies allow them to donate painlessly by letting them designate part of their pay cheque for the United Way. In this way, people feel they can support many needy community groups that they would otherwise probably not know about. But the charity also seeks large donations directly from corporations.

United Way's former director in Santa Clara (she was booted out by the board after the cash fiasco) apparently was promised large cheques from many technology companies over four years. She allocated the promised funds to United Way's dependent groups. But the $11.7 million never came.

Fortunately, some tech executives were willing to come to the rescue. Internet companies e-Bay and Infoseek each pledged $1 million then tried to get other technology company head honchos to reach into their pockets as well. Most did not even bother to respond.

But eventually, through other sources, $14 million was raised. Nearly $2 million of that came from the other big donor besides Mr and Ms Gates, the David and Lucile Packard Foundation, an institution that exemplifies Silicon Valley at its best. Now 34 years old, the foundation was established early on by the co-founder of pioneering computer company Hewlett-Packard and has blessed both large and small organisations globally with its largesse (with a particular interest in world population issues).

The fund is now worth $9 billion, mostly due to the 46 million HP shares which Packard willed the foundation on his death three years ago. Now, the foundation is the third-largest philanthropic foundation in the United States. Contrast that with a report last year which noted that nearly half of the richest people in Silicon Valley donate less than $2,000 annually and 7 per cent give nothing at all.

Many Silicon Valley companies have no formal structure for making donations and few are known for pushing money back into the communities in which they are based. Why? Many believe the stinginess is a function of the youth of the Valley's CEOs, many of whom became heads of their own companies in their early 20s and never worked their way up through established companies with a charitable ethos. In other words, they were not exposed to an environment which supported giving.

But that is surely a sad and sodden excuse. Generosity and community spirit are hardly esoteric values which need long and careful study. David Packard proved that as has eBay vice-president Jeff Skoll, who noted last week that eBay at its founding set aside 100,000 shares of stock towards what is now a $50 million charitable fund, part of community group Community Foundation Silicon Valley. He's trying to get other tech companies to follow a similar path.

And how about the Irish technology industry? While the gestures of some individual companies have been highly laudable, and while many seem eager to get involved in national and community projects if someone approaches them directly, there is still no organised, cross-industry association to elicit and channel charitable donations (of time, money or expertise). Thus, many donations are never made. Technology is one of the wealthiest sectors of Irish industry. Surely it is time for some collective action?

Karlin Lillington is at klillington@irish-times.ie