'I don't see the money': Silicon Valley residents struggle as tech companies flourish

EAST PALO ALTO, Calif. — On a bright but brisk Saturday morning in December, less than 2 miles from Facebook's Frank Gehry-designed campus, a steady stream of Toyotas, Hondas and minivans lined up at a weekly food distribution site at Cesar Chavez Ravenswood Middle School.

Each vehicle idled on the blacktop playground for about 10 minutes as Laura Haggins, 36, an East Palo Alto native dressed casually in sweats, strolled about, getting their packages ready. She made sure that her volunteers gave each vehicle what the group defined as a week's worth of food: a whole frozen chicken; a box of nonperishable goods, including rice; a bag of dry snacks, like cereal; and a so-called Trump box from the Agriculture Department. This week, the box contained a dozen potatoes, cheese, milk, yogurt and celery.

East Palo Alto is nestled among some of the wealthiest communities in the country. Neighboring Palo Alto — just 2 miles south — famously incubated notable tech companies over the decades, like Hewlett-Packard, Apple, Google and Palantir. A six-minute drive to the west is Menlo Park, Facebook's hometown, which has a mean household income of nearly $241,000. Slightly farther west is Atherton, America's richest town, with an average household income of almost $512,000.

But as Haggins stood on the blacktop before Cesar Chavez Ravenswood Middle School, she said she sees very little of that wealth. Since the pandemic began, she said, demand for free groceries has quadrupled, rising from 600 families a month to 600 needy families a week.

"I don't see the money," she said.

Limited giving

As Silicon Valley has had one of its most profitable years in history, thousands of people who live in walking distance from the headquarters of the world's best-known tech giants are going hungry. That's because the pandemic, which brought even more work to technology companies, took away jobs from many fields — from restaurants to retail to even some health care positions. While many of the billionaires from those tech companies have focused on charitable giving on a global level, local charities say that they are faced with ever-higher demand for food, housing, rent relief and other necessities and that there is no end in sight.

Second Harvest, the food bank that primarily serves Silicon Valley and the South San Francisco Bay, has said demand has doubled during the pandemic. Local food distribution sites, including locations at the middle school and the Ecumenical Hunger Program across town, say the number of needy families has more than tripled.

While local technology companies are helping out, charitable groups say it just isn't enough. Case in point: Every week, Facebook buys organic produce from local farmers markets and has Facebook employees box the produce up and deliver it to several locations in the region, like Laurel Avenue Church of Christ in East Palo Alto, to distribute. But demand quickly surpasses supply.

"We run out of 200 boxes within about an hour," said Bruce Nash, the church's minister. He said he is serving more "professionals" seeking food since the pandemic began, including people who work in information technology, sales, marketing and health care. "The need has grown tremendously over the pandemic," he said.

Another food distribution site run by the Ecumenical Hunger Program, also in East Palo Alto, has been serving 1,200 households a week since the pandemic began. That's nearly triple what it was before the pandemic, said LaKesha Roberts, the group's associate director. She expects it to grow to 1,500 households in the run-up to Christmas as other distribution centers close for the holidays. The group also gets funding from the Chan Zuckerberg Initiative, but Roberts said the center needs more help.

"We are getting more of our working-class families, and because they have been so greatly affected by Covid ... they are relying on services that they have never had to before," Roberts said. "I will say this: I definitely believe that everyone can do more."

And charitable groups know that the companies can afford to give more.

At the same time more Silicon Valley residents are struggling to put food on their tables, the tech companies that neighbor the distribution sites are doing better than ever. Profits at Alphabet, Google's parent company, which is a 7-mile drive southeast of the middle school, rose to $11.2 billion during the same period, up from $7 billion last year. Even Amazon, which is based in Seattle and Arlington, Virginia, maintains a notable subsidiary known as A9, just 3 miles from the school. Amazon's quarterly profits have tripled year over year during the third quarter of 2020, topping $6.3 billion.

It's a similar story at Apple, 18 miles from the school, which recorded profits of over $57 billion in 2020, up from $55.2 billion a year ago. This year, Facebook's third-quarter profits topped $7.8 billion, 20 percent more than in the same period last year.

Google declined to respond to questions about its charitable giving. Heather Dickinson, a Google spokesperson, referred NBC News to the company’s most recent third-quarter press release, which doesn't mention the words "charity" or "donation" or even "coronavirus." To be fair, Google made a $100 million commitment to Covid-19 response, in addition to direct cash assistance to vulnerable families through multiple nonprofits and $10 million to support remote learning, according to a separate release issued by the company.

Similarly, Amazon spokesperson Allison Flicker declined to answer questions about how the company's charitable giving has changed. She pointed to a blog post about its recent donations. The post, dated Dec. 16, highlights $20 million for Covid-19 research and $23 million to support relief efforts in Europe, among other contributions. In addition, the company said this year that CEO Jeff Bezos made a $100 million personal donation to Feeding America, the country's largest domestic hunger relief organization. According to the Bloomberg Billionaires Index, Bezos is worth $188 billion, making him the richest person in the world.

On Dec. 15, Bezos' ex-wife, MacKenzie Scott, announced that she had given away $4.1 billion to 384 organizations in all 50 states, as well as the District of Columbia and Puerto Rico. In California, recipients include Goodwill of Silicon Valley, the Central California Food Bank, the YMCA of San Francisco, United Way Bay Area and others.

Apple and Facebook defended how much they have given.

"We've donated hundreds of millions of dollars to relief efforts around the world, and closer to home we've provided grants to close to 100 organizations across California, including many in the Bay Area," Rachel Tulley, an Apple spokeswoman, said in a statement. "And as many housing developments have been put on hold, we've accelerated our spending on affordable housing across the state, deploying over $500 million this year to support thousands of Californians."

Chloe Meyere, a Facebook spokesperson, said by email that the company has committed "hundreds of millions to support communities," including across the San Francisco Bay Area and California. She added that "this has included more than $200 million to create affordable housing, support frontline healthcare workers and small businesses, provide food to those who need it, aid wildfire relief efforts, and help with distance learning."

Different approaches

Part of the charitable giving gap stems from where wealthy Silicon Valley executives give their money. Many local billionaires, including Salesforce CEO Marc Benioff, Uber co-founder Garrett Camp and Tesla CEO Elon Musk have signed onto the Giving Pledge, a promise to "publicly commit to giving the majority of their wealth to philanthropy." But the commitment doesn't mandate that they give any money now, nor does it compel them to donate in their backyards.

"Silicon Valley has not been very locally focused. They say, 'What major changes can we make to society?' as opposed to traditional giving, which is shelters, food banks, which is the most urgent need right now," said Brian Mittendorf, an accounting professor and philanthropy expert at Ohio State University.

Some philanthropy experts say that historically, Big Tech hasn't done a great job supporting charities that are doing immediate, on-the-ground work locally. Rob Reich, director of the Center for Ethics in Society and co-director of the Center on Philanthropy and Civil Society at Stanford University, said that in Silicon Valley, donors often get bogged down by process and analysis rather than provide direct aid.

"The technocratic and engineering influence behind how people made their money carried into their philanthropy," he said.

When Silicon Valley's wealthy make donations locally, they tend to give them to higher education institutions and hospitals, according to a landmark study by Open Impact, a consultancy, which examined charitable giving in Silicon Valley in 2016. For example, Zuckerberg and Benioff have contributed a combined $175 million to the city's two iconic hospitals, which have been named after them.

In fact, according to the Silicon Valley Business Journal, the largest local corporate donor isn't a tech company at all. Sobrato Philanthropies — the charitable arm of Sobrato Real Estate, a locally owned commercial real estate giant that serves Big Tech — gave away more than $60 million in 2020, more than double what Google, the next-biggest donor, gave away locally. Sandy Herz, the president of Sobrato Philanthropies, said she thinks that's partly because Sobrato remains a privately held, family-run business.

"For the corporations, it's — typically for public companies — unusual to move beyond a PR level of community engagement because of the tradition of commitment to the primacy of shareholder value," Herz said. "Our shareholders are right here and care about the community and the quality of life in the community and their children for the future."

Giving more

But some corners of Silicon Valley are waking up to the dire local need — partly because of what has come before.

After the controversy around the Silicon Valley Community Foundation, one of the largest charitable foundations nationwide, which encouraged the wealthy to put their money into donor advised funds, or DAFs, and then dispersed relatively little money locally, some former Silicon Valley executives have pressured their colleagues to give half of their money in such funds away immediately.

In May, Jennifer Risher and her husband, David Risher, a former Microsoft and Amazon executive, spearheaded the #HalfMyDAF program to encourage owners to halve their DAF holdings immediately and give to charity. To sweeten the deal, the Risher family put up $1 million of their own money as "matching grants" to organizations that get money from the partly liquidated DAFs.

"We only stipulated that we wouldn't manage anything that promoted hate crime or violence," Jennifer Risher said.

As a result of their initial $1 million donation, Risher said, a collective $8.6 million has been moved to numerous nonprofits, including local ones, like the Legal Aid Society of San Mateo County, the YWCA of Silicon Valley and Second Harvest.

Some people, like Twitter CEO Jack Dorsey, have also tried to set examples. This year, he created Start Small, a company that helps give away billions of his wealth relatively quickly and transparently.

He has already donated nearly half of the Give2SF COVID-19 Response and Recovery Fund, or $15 million, which helps fund "shelter, food and other assistance to individuals, families, small businesses, and nonprofits in San Francisco," according to the city. He also donated $10 million to the Oakland Digital Divide Campaign so every student there would be able to have a laptop and access to the internet from their homes. Aaron Zamost, a spokesperson for Start Small, declined to make Dorsey available for an interview.

And some Silicon Valley executives have focused on what seems to be one of the most urgent issues: hunger.

Since the pandemic began, Sheryl Sandberg, Facebook's chief operating officer, has increased her and her fiance's giving to numerous groups in the Bay Area and encouraged her peers in the valley to do the same. In addition to their annual donation of $600,000 to Second Harvest, Sandberg gave $2 million more this year. Likewise, Facebook's chief technology officer, Mike Schroepfer, gave $3 million to Second Harvest this year.

Beyond that, Sandberg gave $500,000 to the YWCA Silicon Valley and collectively millions more in other charitable donations to businesses, educational programs and other groups, said Caroline Nolan, a Facebook spokesperson.

Swati Mylavarapu, who used to work at Square, and her husband, Matt Rogers, an Apple alumnus who co-founded Nest, which was bought by Google, have recently pushed others online to donate to the San Francisco-Marin Food Bank.

"This year we've added a whole other zero to the end of our contribution number to make the point that we're trying to give as much as we can and hopefully are motivating others," she said.

Changing sentiments

Back in East Palo Alto, despite the best efforts of philanthropists, the most vulnerable populations are still going hungry. Early on Dec. 4, a group of men on bicycles broke through the Ecumenical Hunger Program's sliding gate, according to video.

Roberts, the group's associate director, said the thieves broke into an outdoor freezer several times to steal frozen chicken parts. She said that during her seven years in the job, she has never before seen anything like it.

But miracles sometimes happen in the least expected ways. Just hours after the freezer had been plucked by those desperate for food, a man arrived, unannounced, on what appeared to be a custom-built electric scooter. He said he wanted to make a donation.

Roberts said the person, whom she described as a "tall, Caucasian man," reached into his pocket and handed her $1,000. The man, who she said gave his name as "Jack," declined an invitation into the office to receive a donation receipt. He scooted away almost as quickly as he arrived.

"For every bad seed, there's 100 more great ones," she said. "And that's what makes it worthwhile."