But critics say that in part because of its structure as a warehouse of donor-advised funds, the Silicon Valley Community Foundation has not had a positive impact on the community it is meant to serve. Some people I talked to say the foundation has had little interest in spending money, because its chief executive, Emmett Carson, who was placed on paid administrative leave after the Chronicle’s report, wanted it to be known that he had created one of the biggest foundations in the country. Carson was “aggressive” about trying to raise money, but “unaggressive about suggesting what clients would do with it,” one Silicon Valley nonprofit head, who did not want his name used because he is still seeking money from the Foundation, told me. “Most of us in the local area have seen our support from the foundation go down and not up,” he said.
The amount of money going from the Silicon Valley Community Foundation to the nine-county Bay Area actually dropped in 2017 by 46 percent, even as the amount of money under management grew by 64 percent, to $13.5 billion. Local nonprofits called the foundation the “Death Star” and the “Black Hole” because it was so hard to get money out of it, Al Cantor, a nonprofit consultant, told me. “They got so drunk on the idea of growth that they lost track of anything smacking of mission,” he said. It did not help perceptions that the foundation opened offices in New York and San Francisco at the same time local organizations were seeing donations drop. And even when it did give out money, the Silicon Valley Community Foundation often spent it outside of California. Last year, it gave out $436 million in grants to the nine-county Bay Area, which was just 34 percent of the $1.3 billion in grants it dispersed.
Mindy Berkowitz, the executive director of Jewish Family Services of Silicon Valley, told me that she met with the Silicon Valley Community Foundation a decade ago to find out more about how to try and attract money from donor-advised funds. The foundation now gives her organization some grants, but they don’t come from the donor-advised funds, she told me. “I haven’t really cracked the code of how to access those donor-advised funds,” she said. Her organization had been getting between $50,000 and $100,000 a year from United Way that it no longer gets, she said, yet it deals with more and more demand for services—with extra money, she would want to give out housing stipends or dedicate a staff member to helping people find affordable housing, or bring an attorney on board to run the group’s pro bono legal clinic.
Rob Reich, the co-director of the Stanford Center on Philanthropy and Civil Society, set up a donor-advised fund at the Silicon Valley Community Foundation as an experiment. He spent $5,000—the minimum amount accepted—and waited. He received almost no communication from the foundation, he told me. No emails or calls about potential nonprofits to give to, no information about whether the staff was out looking for good opportunities in the community, no data about how his money was being managed. (Donors choose how aggressively they want fund managers to invest their money in the stock market.) One year later, despite a booming stock market, his account was worth less than the $5,000 he had put in, and had not been used in any way in the community. His balance was lower because the foundation charges hefty fees to donors who keep their money there. “I was flabbergasted,” he told me. “I didn’t understand what I, as a donor, was getting for my fees.”