In Silicon Valley, Donors Aim Gifts at ‘Core Charities’

Compiled by Nicole Lewis and Elizabeth Schwinn

Sterling K. Speirn, president, Peninsula Community Foundation (San Mateo, Calif.)

How do 2003 donations to date compare with 2002?

Contributions are on track

to meet or exceed last year’s numbers. One interesting trend: Donors are much more focused on their “core charities.” In 2000, about 30 percent of the dollars paid out through donor-advised funds went to charities outside this geographic area. Thus far in 2003, only about 19 percent have gone outside.

What’s the prognosis for end-of-year appeals?

It looks like we’ll probably have an upward turn this year. Last year, we received $59-mil-lion in new gifts. By the end of November, we had already received $57-million. Our community fund, an annual appeal for money to be used for immediate gifts, has been doing very well, and we’ve had a real upturn in stock gifts in the last several weeks.

Has the recent positive economic news had any impact on fund raising?

Stock gifts are back.

What fund-raising techniques do you expect to do best at the end of this year?

Harvard Business School just published a case study on the Peninsula Community Foundation, and we’ll send it to a key group of several hundred stakeholders in early 2004. Being able to associate the community foundation with Harvard is, like the MasterCard commercials say, priceless. We’re expecting it will encourage people to “give to” the foundation, rather than only “give through” it.

What hasn’t worked well?

Direct mail. Direct mail works fine for our current donors, but we tried something new this year. We sent several hundred pieces to local families that did not have a fund with us, inviting them to get to know us better. Our yield rate was low because of the external climate. I think we’ll have more success with direct mail as the economy recovers, so we’ll certainly try again.

What is the most important step you’ve taken to stimu-late end-of-year giving?

Talking about our safety-net fund over the year. This is a new fund we created this year to support local agencies, to help them meet payroll when giving is down and government support has been cut in half in some cases. Keeping that in front of donors has paid off. They know it’s been a tough year, and they’re giving to the fund.

What are your predictions for 2004?

We’re cautiously optimistic. Some of our new gifts are not from people in high-tech, but are people who’ve lived here for 30, 40, 50 years, that had small businesses.

Right now, philanthropy in Silicon Valley is about a street with a different name. In 1999 and 2000, philanthropy here was about Sand Hill Road. Venture capital went into hot startups; hot startups went public; public companies produced new millionaires.

Today, it’s also about the El Camino Real, which runs north and south through the valley, from south San Francisco to Mountain View. It’s a modest holdover from the postwar era, dotted with small retailers and office buildings.

Inside those office buildings are hundreds of solo-practice or small-firm lawyers and CPA’s. These professionals don’t have 25 wealthy clients like some of the larger firms on Sand Hill Road and elsewhere. But they each have two or three clients that have lived in the community for a long time and therefore own highly appreciated real-estate assets.

Real estate in our community will be the jet fuel of the intergenerational wealth transfer. In the first quarter of this year, 30 percent of the dollar value of our contributions came from real estate. All of these gifts were referred by professional advisers up and down the El Camino Real. So we have been much more focused on outreach to these professionals. Their clients are the millionaires next door. They’re not the lions of the new economy, but they’re probably Lions’ Club members.