Innovation Through Philanthropy - Silicon Valley Community ...

neinnovation
through
philanthropy
What If
children
really were
our future
NetApp’s
Dan Warmenhoven
talks corporate
philanthropy
Keeping
Doors
Open
Solutions
from the front line
of foreclosure
prevention
spring 2009

LOS ANGELES NEW YORK WASHINGTON, D.C.
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Mitchell Silberberg & Knupp LLP
Nationally recognized expertise in helping clients realize their philanthropic objectives:
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And other current and deferred charitable gift planning vehicles.
David Wheeler Newman, Practice Chair
310.312.3171 ~ dwn@msk.com
Find out why the top professional advisors
in our region trust Silicon Valley
Community Foundation to facilitate
their clients’ charitable giving.
“
Silicon Valley Community Foundation provides
user-friendly solutions to assist clients in better
defining their philanthropic objectives and
optimizing the benefit of their contributions.”
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Founder and CEO of Wealth and Tax Advisory Services and member
of Silicon Valley Community Foundation’s Professional Advisor League
Call 650.450.5517
or email donate@siliconvalleycf.org
to learn more about how you can
make giving easier today.

oneinnovation
through
philanthropy spring 2009
3 From Emmett D. Carson
Big Ideas
4 Preserving
the Safety Net
Nonprofits balance growing
need and shrinking resources to
help families put food on their
tables and pay rent and bills.
5 Finding Value
in the Arts
In hard times, a donor circle
steps up for the dancers,
musicians and artists who enrich
our lives and communities.
15 siliconvalleycf.org
A roundup of news and
developments at Silicon Valley
Community Foundation.
What If
By John L. Maltbie 16
Local leader and former county
manager John Maltbie asks a
simple question: What if children
really had rights
On the cover: One of many foreclosed homes in east San José.
Photography by John Lee/Aurora Select.
John Lee/Aurora Select
6 Keeping Doors Open
From legal aid to housing counseling,
workers on the front line of the foreclosure
crisis fight to save people’s homes.
Features
Robert Houser
12
The Power of
Corporate Philanthropy
A Q&A with Dan Warmenhoven
of NetApp on why corporations
can and should be good neighbors.
www.siliconvalleycf.org
innovation through philanthropy 1

In the face of
foreclosures, legal
services workers and
housing counselors
fight to keep
homeowners such
as Mary Vaughn of
south Palo Alto from
losing their homes.
Page 6
John Lee/Aurora Select
2 innovation through philanthropy
www.siliconvalleycf.org

Bay Area Event Photography
Volume 3, Number 1
BOARD OF DIRECTORS
Nancy H. Handel, Chair
John M. Sobrato, Vice Chair
Laura Arrillaga-Andreessen
Jayne Battey
Gloria Brown
Emmett D. Carson, Ph.D.
Caretha Coleman
Thomas J. Friel
Gregory Gallo
Narendra Gupta
Susan M. Hyatt
William S. Johnson
Anne F. Macdonald
Ivonne Montes de Oca
C.S. Park
Jennifer Raiser
Sanjay Vaswani
Richard Wilkolaski
Erika Williams
Jane Williams
Gordon Yamate
CEO & PRESIDENT
Emmett D. Carson, Ph.D.
innovation through philanthropy
MEDIA RELATIONS OFFICER
Rebecca Salner
CREATIVE DIRECTOR
Mark L. Hannah
MANAGING EDITOR Chris Blose
SENIOR EDITOR Kim Caviness
ART DIRECTORS Gregory T. Atkins, Nancy Roy
PHOTO EDITOR Sara Elder
PROJECT MANAGER Connie Otto
COPY EDITOR Tara Kawar
CONTRIBUTORS
Denise Bridges
Nichole Evanovich
one@siliconvalleycf.org
Editorial, Design and Production Management
ONE: Innovation Through Philanthropy is published
two times a year by Silicon Valley Community Foundation.
To receive a copy, call 650.450.5400 or email
one@siliconvalleycf.org. Postmaster: Please send address
changes to Silicon Valley Community Foundation,
2440 West El Camino Real, Suite 300, Mountain View,
California 94040-1498. The opinions and statements
expressed by the authors and contributors to this publication
do not necessarily reflect opinions or positions
of Silicon Valley Community Foundation. All rights
reserved. No material in this publication may be published
or copied without the express written consent of
Silicon Valley Community Foundation. Copyright
© 2009 Silicon Valley Community Foundation
Silicon Valley Community Foundation is
confirmed in compliance with National
Standards for U.S. Community Foundations.
Cert no. SCS-COC-00648
Emmett D. Carson
at the State of the
Valley Conference.
From
Emmett D. Carson
As we created this
issue of ONE: Innovation
Through Philanthropy,
we faced constant
reminders of the
growing human toll of
this prolonged and
painful economic
downturn. We heard
about safety-net clients
who are struggling to
meet basic needs, such
as food and shelter, for
themselves and their
families. We heard
heartbreaking stories from the
front lines of the foreclosure crisis.
We learned from our 2009 Index
of Silicon Valley that our region
has the least affordable housing
and fastest growing number of
foreclosures in California.
There is another side to
these stories, though. We are
reminded of the tireless work
the nonprofit organizations
in San Mateo and Santa Clara
counties do to curb these
problems. Our cover story
features workers dedicated
to keeping doors open for
homeowners in crisis through
our economic security
grantmaking, and there are
sweet success stories among the heartbreak. Our Big Ideas section
highlights safety-net services helping a growing clientele despite
shrinking private and government aid. Our Q&A with NetApp’s
Dan Warmenhoven reminds us of the power of corporate giving
to build a community, even in the midst of a downturn. Local
leader John Maltbie implores us to remember that preserving the
rights of children should not be put in jeopardy, even in the face of
challenging state and local budget cuts.
Our community foundation, along with all our partners, will
continue to respond to our region’s challenges flexibly and quickly,
using real-time data and community input. But we face long-term
problems, so we are also poised with long-term solutions. one
www.siliconvalleycf.org
innovation through philanthropy 3

ig ideas
Trends and innovations in philanthropy
Preserving
the Safety Net
The struggle to provide
more food and shelter
Four years ago, Nancy Tivol used the phrase
“dramatic increase” to describe the growing need
for safety-net services such as food and housing.
The next year, it was “growing phenomenally.” Then
“skyrocketing.” Last year, as the economy
declined, it was “exploding.”
Tivol has run out of phrases.
“What comes after
‘exploding’” asks
the executive
director of
Sunnyvale
Community
Services (SCS).
“With what we’re
seeing this year, all previous
numbers pale in comparison.”
Five years ago, about 750 families turned to
SCS for help putting food on the table each month.
Now that number has doubled to 1,420, and the need
for financial aid for housing and other basics is up 56
percent before this fiscal year even ends.
Using a $75,000 grant, part of $3 million in food and
shelter grants awarded by Silicon Valley Community
Foundation in December 2008, SCS offered housing
assistance and food to families during a tough
holiday season. But Tivol notes that the grant money
was used in less than a month due to the growing
demand for services.
Two-income homes are becoming no-income homes.
Seniors on fixed incomes sometimes choose between
paying for rent or medicine. People seeking government
benefits face longer waits. Families who can’t pay the
rent need immediate help before they become homeless,
especially when so many shelters are full.
These trends may become worse, says Patricia
Gardner, executive director of the Silicon Valley
Council of Nonprofits (SVCN). “If we’re already seeing
more than a 30 percent increase in the need for safetynet
services, and most government cuts won’t take
effect until July, right around the holiday season we’re
likely to see another incredible jump in need.”
SVCN surveyed health and human services agencies
in Santa Clara County in February 2009. Only 7 percent
saw themselves as financially strong, in part because of
a reported 23 percent decrease in individual donations
and 39 percent decrease in corporate support.
Karla Molina de Bourdon, executive director of North
Peninsula Neighborhood Services Center (NPNSC), says
donations are down 60 percent to 70 percent, but the
center is serving 40 percent more people. Caseworkers at
NPNSC, which serves San Bruno, South San Francisco
and Brisbane, also spend more time on increasingly
complex cases. “You keep digging and digging,” she
says, “and you find more and more things people need.”
NPNSC, which received a $50,000 community
foundation grant in December, has developed ways to
serve more people. “We’re being creative and packaging
families,” she says. “We’ll pay the rent if another agency
will pay the utilities, for example. For many current
clients, the amount we are able to give them can be just a
Band-Aid if they don’t get some relief elsewhere, too.”
Creative thinking helps, but the need for funding
will grow as the long-term effects of this economic
downturn do the same. The community foundation
will release a request for proposals for another round
of safety-net grants in May. As nonprofits provide more
help, they’ll need more in turn.
“Keeping up would be enough of a challenge,” Tivol
says of SCS’ work, “but to provide even more this year
in this environment would be a miracle.”
—Chris Blose one
chris rogers/iStockphoto.com
4 innovation through philanthropy www.siliconvalleycf.org

Finding Value in the Arts
Donors Step Up for Local Culture
Jaci Hall knows the joy of playing her flute for an
audience. She saw the way her son’s world changed
at age 7 when he first played the bagpipes; now
it’s his career. And she helped her mother become an
accomplished weaver at age 50.
The San José resident and retired teacher also knows
joy is not enough to sustain the arts. That is why she
has volunteered for local arts organizations, established
a donor advised fund in her mother’s honor at Silicon
Valley Community Foundation to support elementary
school arts programs and, most recently, joined likeminded
individuals in the donor circle for the arts.
The donor circle is funded by those individuals,
as well as the James Irvine Foundation, the National
Endowment for the Arts (NEA) and the community
foundation. In its first round of grants, it issued $55,000
to 16 organizations and artists as diverse as the people
of San Mateo and Santa Clara counties, mixing hip-hop
and quilting, exercise and experimental dance, jazz
and ancient music. The circle of 10 donors plans to
publish guidelines for a second round of funding
in summer 2009.
Hall speaks about creative value, but she realizes
bottom-line-oriented people want a different kind of
value in difficult economic times. “We say arts foster
beauty, creativity, vitality,” Hall says, “but what is now
being proven is that the arts create jobs and contribute
significantly to the community and the economy. Arts
are good business.”
Hall points to a 2007 study by Americans for the
Arts stating that the national nonprofit arts-andculture
industry generated $166.2 billion in economic
activity in a year and supported 5.7 million full-time
jobs. But numbers for artists themselves are not so
positive now. An NEA study published in March
places their unemployment rate at twice that of
other professional workers. The donor circle aims
to provide help in a time when the arts are often
seen as a luxury, says participant Phil Kurjan, a
Distinguished Engineer at Applied Materials and a
community foundation fund advisor.
“The place where this donor circle really shines is
in grants to small groups that may not have access to
big donors and other forms of funding,” says Kurjan,
of Sunnyvale.
The circle also involves donors directly with the
artists and the grantmaking process, says Noel
Butler, an avid reader, dancer and former database
engineer from Los Gatos. Butler shares a love of
the arts with her 13-year-old son, William, both as
patrons and participants. And through the circle,
Kurjan and Butler learned more about artists the
couple already admired and gained admiration for
others they didn’t know before, including a group
dedicated to preserving China’s oldest stringed
instrument, the guqin.
People too often fail to recognize that great music,
dance, theater and other arts live outside the biggest
cities, Butler says. “We have genius right in our
backyard. We just need to find what’s
out there and support it.”
—Chris Blose one
Donors interested in participating
should contact Jennifer Kane at
jbkane@siliconvalleycf.org
or 650.450.5501.
Mark L. Hannah
www.siliconvalleycf.org

By Richard Rapaport
Photography by John Lee
Doors
Keeping
c
Ope
Sitting quietly in the outer office of Community
Legal Services in East Palo Alto (CLSEPA) on a
warm March afternoon, Kathryn Latour’s outer
demeanor doesn’t match her inner anger. Latour, an
attorney who had retired to raise her family, is here at
the behest of a friend, Mary Vaughn, an 86-year-old
caught up in the foreclosure crisis making its malicious
march across Silicon Valley.
“I get riled up just thinking about it,” Latour says. In
fact, Vaughn’s case and others like it have infuriated
Latour to the extent that she is here to volunteer her time
and legal expertise to help CLSEPA clients.
Vaughn is one of many homeowners in the
neighborhoods near East Palo Alto and south Palo Alto
that are financially awash in the floodtide of subprime
loans gone bad and the resulting defaults, foreclosures
and evictions. An estimated one in three homes in East
Palo Alto is in default. What has mobilized Latour is the
distress of fellow Mormon church member Vaughn, a
woman she describes as “giving, honest and good.”
Vaughn and Latour are seeking help at CLSEPA,
one of seven legal services and housing counseling
organizations that received a total of $500,000 in grants
from Silicon Valley Community Foundation (see full
list of grantees at www.siliconvalleycf.org/ONE/31a).
These grants are designed to augment existing legal
services, information and loan counseling to residents
of Santa Clara or San Mateo counties facing foreclosure
or eviction. The goal is to effectively double the number
of trained counselors and lawyers dealing with
foreclosures and their fallout.
Seeking solutions on the front line of foreclosure prevention
6 innovation through philanthropy www.siliconvalleycf.org

n
Mary Vaughn
at home in south
Palo Alto.
www.siliconvalleycf.org

One agency had to help clients
in its parking lot — the number of folks
looking for assistance was that large.
Vaughn and her late husband, Johnny, operated a
window-washing business that was successful enough
for them to buy a modest 2,000-square-foot, fourbedroom
house in south Palo Alto in the early 1960s.
When Vaughn’s husband died in 1987, he left her with a
home that they owned free and clear. Free and clear, that
is, until a day in 2003 when two men in suits showed
up at her front door. They were friendly and seemed
to know a good deal about her: her religious activities,
credit card and bank account histories. They were there,
one of them told her, to offer a once-in-a-lifetime homeequity
loan. The terms seemed too good to pass up. As
Vaughn now knows, they were too good to be true.
Vaughn agreed she could use some new plumbing
and, considering the escalation in regional home values
since she and her husband had purchased the home,
agreed to sign up for what she thought was a small
home equity loan. In reality, through complicated
terms that were unclear to her, Vaughn was inking an
agreement for a hefty mortgage. Vaughn was content
writing monthly interest-only checks for around $2,000,
unaware that the amount was not fixed and could
balloon. In 2008, letters began arriving from a loan
company she had never heard of stating that it now
Boarded homes are
abundant in an east San
José neighborhood.
owned the mortgage, and that she would owe a heartstopping
$5,400 each month for interest and principal.
Shirley Hochhausen, managing attorney for antipredatory
lending at CLSEPA, took Vaughn’s case.
Legal aid workers such as her offer one avenue to help
people in need; housing and mortgage counselors offer
another. Additionally, local, state and national legislation
will reshape policy and practices in coming months
and years. The American Recovery and Reinvestment
Act of 2009, for example, includes provisions for lowcost
refinancing, loan modifications for people facing
foreclosure and a call to maintain low interest rates.
In the meantime, dedicated workers at the front line
of the foreclosure crisis seek solutions for the people
who need help right now.
“We made the decision to support foreclosure
prevention counseling and legal services because
we saw a pressing need and wanted to address it,”
says Pat Krackov, the program officer responsible
for the community foundation’s economic security
strategy. “We heard that agencies were swamped
with clients facing foreclosure and needed additional
manpower. One agency had to help clients in its
parking lot on several occasions before moving to
larger quarters—the number of folks
looking for assistance was that large.
We wanted to fund programs that could
hit the ground running and make an
immediate difference.”
Extensive Effects
Vaughn, an African-American,
exemplifies the results of a November
2008 study by the Federal Reserve
Bank of San Francisco confirming that
African-Americans were 3.3 times more
likely than whites to have mortgages in
foreclosure. After fighting for years to
prohibit banks from “redlining” minority
neighborhoods out of mortgage loan
eligibility, these same neighborhoods
had become fertile targets for “reverse
redlining” raids by predatory lenders.
This does not mean the housing crisis
is totally the fault of lenders or solely
John Lee/Aurora Select
www.siliconvalleycf.org

Kathryn
Latour, right,
helped
friend Mary
Vaughn find
legal aid.
within the realm of minorities. Ginna Green, from the
California office of the Center for Responsible Lending,
describes how the macroeconomic scenario played
out: “Poor regulation, astronomical housing prices
and massive numbers of risky loans with difficult-tounderstand
features brought the housing market to the
brink, and with it the general economy.”
According to a report by research firm First American
Core Logic, of the $2.4 trillion in housing wealth lost
in the United States last year, $1.2 trillion was lost
in California, with Silicon Valley responsible for a
ballooning percentage of that loss. Much has been said
about the culpability of lenders, but there is enough
blame to go around, and borrowers need to get their
own “financial houses” in order, too, Green says.
“Borrowers should work with their lenders to make sure
they are clear about payment and interest amounts, how
long the original interest rate is going to last, and if or
when their payment will balloon.”
With her own loan ballooning, Mary Vaughn wasn’t
sure what to do with the loan company’s letters until
October 2008, when a foreclosure notice was posted
at her house. “I was so embarrassed and humiliated,”
Vaughn says, explaining her initial lack of response.
“It simply defies reason,” says Hochhausen,
regarding banks and loan companies that often
refuse to negotiate reduced monthly home payments
rather than go through an expensive and emotionally
punishing foreclosure. In CLSEPA’s office, she listens
for a moment as Latour lays out Vaughn’s case,
and then Hochhausen adds her own take on the
broad effects of foreclosure. In addition to affecting
individuals, she notes, “Foreclosures affect entire
neighborhoods by lowering surrounding home
values, decreasing neighborhood safety, shrinking the
community property-tax base that pays for valuable
community services such as schools and roads, and
eliminating revenue streams for mortgage holders.”
In what she sees as an out-of-whack financial system,
Hochhausen views the role of legal aid as helping clients
wisely navigate a complicated legal system, which requires
expertise. “If civilians go in by themselves,” Hochhausen
says, “they always get slaughtered.”
Hochhausen is fiercely outspoken about the fate of
the soon-to-be-dispossessed, and her résumé backs up
her words. In 2001, the University of San Francisco law
professor founded CLSEPA’s Anti-Predatory Lending
Initiative, a first-of-its-kind program. Since then, the
number of legal aid lawyers, loan counselors funded and
sanctioned by the U.S. Department of Housing and Urban
Development (HUD), law students and volunteers dealing
with predatory lending has grown. But it hasn’t grown fast
enough to deal with a crisis that, while slower to hit San
Mateo and Santa Clara counties than some other California
locales, is making up for that tardiness with a frightening
spike in numbers. According to the Index of Silicon Valley
(see “The Crisis in Numbers”), the number of home
foreclosure sales in 2008 went up 184 percent, far higher
than in the rest of the state.
“San Mateo and Santa Clara kept getting slighted,” notes
Martin Eichner, director of Project Sentinel’s HUD housing
The Crisis
in Numbers
The following numbers from the Index of
Silicon Valley, a research resource produced
by Joint Venture: Silicon Valley Network and
Silicon Valley Community Foundation, back
up the heartbreaking personal stories of the
foreclosure crisis:
• The number of home foreclosure sales in
Silicon Valley went up 184 percent in 2008,
far outpacing the 126 percent increase
for California as a whole. The resulting
correction in the housing market has led to
dropping sale prices.
• In December 2008, foreclosed homes made
up 41.2 percent of sales in Santa Clara County
and 27.3 percent in San Mateo County.
• In 2008, Silicon Valley became the least
affordable region in which to live in California,
with only 29 percent of first-time homebuyers
able to afford a median-priced home.
www.siliconvalleycf.org
innovation through philanthropy 9

Asset-Building
in Hard Times
When San José renter Jannie Lugo faced a
sudden eviction because of foreclosure on
her rental house, she made a smart decision.
She sought expert help at Bay Area Legal Aid’s
Santa Clara County offices and got the eviction
delayed. But even before she sought legal aid,
Lugo had made other smart financial decisions.
Lugo has managed to put away enough
savings so that when she finds a new home,
she will have the assets available to pay first
and last months’ rent. She’ll also be able to
weather the storm of recession that has seen
her hours as a medical assistant at Kaiser
Permanente cut by one-third.
Building and keeping assets in difficult times
is a skill that, once learned, can be useful
throughout a lifetime and even beyond,
through the ability to pass assets on to the next
generation. Recognizing that asset-building
can be a lifesaver, Silicon Valley Community
Foundation awarded $934,000 in grants to
create or grow educational programs aimed
at helping low-income residents make smarter
financial decisions, develop new habits and
begin to put aside savings (see more at
www.siliconvalleycf.org/ONE/31b).
Financial “coaching” programs at
organizations such as EARN and Project Read
will help individuals and organizations better
understand and apply the basics of finance,
including practices as simple and effective as
opening and maintaining savings accounts.
Other programs include the Corporation for
Enterprise Development’s planned online
marketplace, which will allow donors to match
funds saved by residents in need.
Innovative ideas are crucial in difficult
times, says Carolina Reid, a researcher for the
Federal Reserve Bank of San Francisco. “To
me, the important story is that the foreclosure
crisis means that homeownership has, in
many cases, become a lost opportunity to
build assets and close the wealth gap,” Reid
says. “We now need to think of new ways to
restructure asset-building and provide people
with other opportunities to save.”
counseling program, which provides one-on-one
mortgage delinquency and default counseling. “They
were not initially considered by government to be as
much in crisis as the Central Valley.” The successful
tech sector masked early signs of trouble, but Eichner
says there are growing pockets of distress in Silicon
Valley, particularly along Highway 101.
Since 1994, Project Sentinel has taken the cases of
homeowners in or near foreclosure. Counselors attempt
to find common ground with lenders. Working in
particular through the Obama administration’s new
Making Home Affordable program, one solution
might be a loan modification, which changes monthly
payments and timeframe. Another is a forbearance
agreement, in which a lender agrees not to foreclose in
exchange for an altered mortgage plan that will, over
time, bring the homeowner up to date on payments. In
drastic cases, bankruptcy may be appropriate.
Language and Legal Barriers
Eichner’s mortgage-default caseload was nearly
negligible until 2007. Then, he says, a financial
meltdown began “that was like a train hitting a car.”
Eighty-four cases in 2007 became 350 cases in 2008.
For 2009, Eichner predicts his office will handle nearly
a thousand mortgage-default cases. Project Sentinel
is adding more staff to meet a demand that today
forces a several-week wait for clients not in immediate
foreclosure. One more statistic jumps out: Just short of
40 percent of Eichner’s cases involve Spanish speakers.
Maeve Elise Brown, executive director of Housing
and Economic Rights Advocates (HERA), says such
cases reflect the work of Spanish-speaking loan agents
working overtime to sell subprime loans in largely
Hispanic neighborhoods in towns such as Santa
Clara, San José, Redwood City, San Mateo, Daly City
and South San Francisco. Brown, Hochhausen and
others hear stories about brokers who exploited family,
regional and even religious ties to sell subprime loans.
These tactics allowed brokers and banks to collect
billions in fees, interest and penalties while often
leaving customers vulnerable and in the dark.
Brown, a longtime Bay Area housing advocate,
co-founded HERA in 2005. Today, at the organization’s
Oakland headquarters, the phones never stop ringing,
she says. In addition to offering free community
workshops and other resources, HERA’s staff handles
litigation and drafts pleadings. The work requires
10 innovation through philanthropy www.siliconvalleycf.org

Maggie
McCarthy,
a housing
counselor
at Project
Sentinel's
Sunnyvale
office,
works with
a couple
to clear
up their
financial
issues.
John Lee/Aurora Select
a detailed, thorough search for hidden language
and legal landmines, including buried clauses that
force a client to give up the right to sue. “The loan
documentation is so complex,” Brown says, “we need
specialist lawyers to spot the kinds of problems that
loan counselors might miss.”
Another problem comes from the disarray in the
offices of mortgage companies and banks. “On one
day, you get someone who promises to help, and on the
next they have no indication you even called before,”
Brown says. Much of the grant money will go toward
increasing the size of her staff to address what she sees
as HERA’s most important job: educating people on
the other end of the phone, whether they’re lenders or
homeowners in need of counseling or legal aid.
Collateral Damage
The most vulnerable people in the foreclosure process
often don’t even have their names on the deed. Renters
have limited legal remedies when the sheriff comes
knocking. Unlike homeowners, to whom the law
typically gives at least 60 days in eviction cases, the
process for renters “moves like a lightning bolt,” says
Julie Patiño. Patiño, managing attorney of the Santa
Clara County office of Bay Area Legal Aid, seeks to
limit the collateral damage experienced by the renters
who make up one-third of her office’s caseload.
Renters have little protection and recognition; a
foreclosure notice might simply lump all renters in a
home or apartment under a “John Doe” alias. “These
tenants are basically persona non grata,” Patiño says.
When eviction is the order of the day, attorneys
in Patiño’s office scramble to work with the lender’s
lawyers to get them either to allow tenants to pay
and stay, or give them a reasonable amount of time
to move. “This strikes at the heart of what legal aid
really is about,” she says. “The best we can do is
put our finger in the legal dam and plug the holes.”
However, she adds that the legal aid community is
trying to shore up that dam by training real estate
and lending professionals, educating tenants about
rights and even targeting unscrupulous attorneys and
lenders in lawsuits.
For now, the victories may be small, but they can be
sweet. Take the case of Jannie Lugo, a medical assistant
at Kaiser Permanente who didn’t find out she was being
evicted from her three-bedroom rental house in San
José until a sheriff came to her door. Between having
her hours cut at work and needing to find a new place
to live, times were becoming increasingly stressful for
Lugo and her 16-year-old son, Daniel. Finding Bay Area
Legal Aid was a godsend, Lugo says.
“They did such a great job explaining the process to
me, guiding me through what I needed to do,” Lugo
says, relief replacing anger in her voice. With expert
help from attorney Nadia Aziz, she was able to win
a 60-day reprieve on the eviction. “Otherwise, I don’t
know what we would have done.” one
www.siliconvalleycf.org
innovation through philanthropy 11

The
Power
of Corporate
Philanthropy
c
Dan Warmenhoven
and NetApp weave
generosity into
company culture

Robert houser
When Silicon Valley is booming, the region’s nonprofit
organizations benefit. But when the boom ends, so does
much of the largesse. Fortunately, not everyone turns
off the philanthropic tap so abruptly.
Dan Warmenhoven, chief executive officer of
NetApp since October 1994 and chairman of its board
since March 2008, has overseen the storage company’s
transition from startup to upstanding corporate citizen.
Recently ranked first on Fortune magazine’s list of 100
Best Companies to Work For, NetApp has earned a
reputation as a caring member of every community
in which it has offices. Employees around the globe
discover charitable groups and nonprofits that fit with
their individual passions. NetApp supports their
philanthropic efforts with cash, donated equipment
and a unique program that lets employees spend up to
40 hours of paid company time each year volunteering
for the nonprofit or school of their choice.
NetApp employees in Silicon Valley have forged
close relationships with the Second Harvest Food
Bank of Santa Clara and San Mateo Counties, the
American Heart Association and the American Cancer
Society. Simultaneously, Warmenhoven has served
on numerous Silicon Valley nonprofit and charitable
boards and operates the Warmenhoven Family Trust to
provide more direct cash contributions to charity.
Warmenhoven met recently with Silicon Valley
Community Foundation CEO and President Emmett
D. Carson and ONE contributor Janet Rae-Dupree at
NetApp’s headquarters in Sunnyvale.
Tell us about the role of corporate philanthropy
in shaping NetApp’s philosophy.
Early on, we identified five constituents in our
corporate values statement whom we serve: employees,
shareholders, customers, business partners and the
communities in which we are located. We believe that
we should be involved in the communities in which we
have a presence. We would like the people in each of
these communities to feel that we’re a good neighbor,
that we contribute to the community and that they
want us to be there.
Why did NetApp make philanthropy such a
critical part of its corporate philosophy
There was a book published around the time NetApp
went public called Built to Last [by James C. Collins
and Jerry I. Porras]. After we went public, the
executive team agreed that we were on the brink of a
great opportunity. We wanted to build a really great
company. Our goal became: When Built to Last Version 2
is written, we want to be a featured company.
In addition, for whatever reason, we recruited a
group of people who were particularly involved in
the community. This included our executive team,
who individually are very philanthropic in their
personal lives.
How do you decide where to focus your efforts
This is not like the old days, where George Eastman
decided how to donate the Kodak wealth. We let our
employees drive the company’s focus. We believe that
our employees should choose how they want to get
involved in the community, and the company backs
them. Typically, there is a high degree of employee
participation in the organization before there are a lot
of funds from NetApp going to the nonprofit.
What type of philanthropy are you doing
We’ve done a lot in three areas: cash, equipment and
volunteer time. Our total contributions last year were
just under $2.5 million. About half of that was in cash.
The second component, which gets overlooked, is
equipment. A lot of nonprofits have fairly antiquated IT
systems, and we can really make a difference. Last year
we donated almost $800,000 in NetApp systems and
software. When our customers upgrade, we take their
systems back and donate them to nonprofits, schools
and universities. It’s a great program because the
nonprofit is getting needed systems and software, we
are supporting organizations that are important to our
employees and we are reusing equipment that still has
a useful life and market value.
The third component is one we pioneered: the
volunteer time-off program. An employee can take up to
40 hours per year, with full pay and benefits, to volunteer
at the nonprofit or school of their choice. Employees love
it. This is a terrific win-win-win. The employees feel like
they’ve got time to get involved at their kids’ school or at
any other nonprofit in the community and that NetApp is
supporting them. You see NetApp volunteers everywhere
you go. We don’t lose anything in terms of employee
productivity, either. Our employees are professionals.
They’re goal-oriented. They get their jobs done.
What are the challenges to continuing
philanthropy through the downturn
It comes back to the value system. Anything we give
comes off the earnings line. You can argue that we’re
taking away from shareholders at a time when we’re
www.siliconvalleycf.org
innovation through philanthropy 13

Dan Warmenhoven, left,
and Emmett D. Carson.
not quite at our normal profit levels. But giving is
important to our employees. Recently, we had to reduce
employment, about 6 percent of our global work force.
You could argue that if we didn’t give $2 million to
nonprofits, we might have more to support employment.
Recently, we agreed to give about $250,000 in used
equipment to help Second Harvest develop a database.
One of our employees agreed to do the install. Turns
out he was one of the people affected by the reduction
in force. It was the week
that he was to do the
install, and he lost his job.
He showed up anyway.
He lost his job on Monday,
and he showed up
on Thursday to do
the installation.
Finding the balance
between what’s fair to all
parties is challenging.
So how do you make
those choices
The issue for us comes
down to cash and how
much you put forward. The
volunteer time-off program
is popular, and it’s not going away. And in-kind
donations are going to continue. You can’t just take one
of the constituents and say, “Too bad. We’ll get back to
you later.” This is a very challenging time, and the needs
are even higher than usual. More people are out of work.
I’m sure contributions to the nonprofits from the donor
community are down. It’s a situation where the needs
are greatest and yet the capacity is the lowest.
One of NetApp’s founders has just written a
book. Can you tell me about it We understand
he’s generously donating his royalty proceeds
to the NetApp Fund, a corporate advised fund
at Silicon Valley Community Foundation.
It’s called How to Castrate a Bull, and it’s Dave Hitz’s life,
and a story about NetApp, too. Dave is a remarkable,
gifted individual who was invited to attend a very select
college called Deep Springs on the California-Nevada
border. The students, besides being students, also work
as farm hands. This is a life experience, and the class
president every spring has to castrate a bull. The reason
for the title, he says, is that was the first time he really
understood the issues around managing risk. He had to
figure out how he was going to do this without getting
“We would like the
people in each of these
communities to feel that
we’re a good neighbor.”
himself kicked in the head and killed. When you’re in
a startup, it’s all about risk management, so he found
great similarities in that. How to Castrate a Bull is more
about how to form a company and get through the very
difficult times. It’s a great little read.
What do you see going forward a few years,
past the end of the recession
Philanthropy is going to continue to grow, and we’ve
been pretty creative at keeping it going through the
downturn. One example stems from the policy we
have here that vice presidents and above don’t officially
have a vacation plan. So when we promote somebody
internally, there’s vacation that’s accrued that they’re
going to forfeit. What happens to the accrual The
money’s already been set aside, so Jan [Stewart,
community relations manager] said, “Let’s give it to
our communities,” and created the NetApp Fund.
The point is, there are ways to come up with creative
funding to continue growing.
Why do you work with the community
foundation We’re proud of the fact that you’re
the first company to do so after the merger.
This is going to sound like we’re not interested in hard
work, but, frankly, it just makes it easy. It takes away all
the administrative and compliance issues. We don’t lose
any control, but we make sure that everything is done
the right way.
What advice would you give other companies
seeking to contribute as you have done
Tie your efforts and programs back to the employees.
As a policy, I don’t think we’ve ever given any funds
or equipment to an organization where we didn’t have
employee involvement first.
The volunteer time-off program is an employee
benefit and a community benefit. Most of the things we
do are in that zone. It’s not either/or.
Even when we were a very small company of perhaps
100 employees, the employees quickly became active in
support of Second Harvest. That certainly has grown.
Another one is the heart walk for the American Heart
Association. We’ve participated in that now for over a
decade. There are more NetApp employees at the walk
than almost any other company. one
Robert houser
14 innovation through philanthropy www.siliconvalleycf.org

siliconvalleycf.org
Silicon Valley Community Foundation news and resources
c
Sustaining Innovation
If Silicon Valley is to maintain its place as a center of innovation, its people need to apply their
innovative thinking to develop and nurture a changing work force.
That key message comes from Economic Restructuring and Workforce Transitions, a special
analysis with the 2009 Index of Silicon Valley. The index is a comprehensive examination of the
region’s economy and the health of the community, produced in partnership by Joint Venture:
Silicon Valley Network and Silicon Valley Community Foundation. The special analysis
focuses on the impact that the shifting economy and changing
industries have on the community.
The region needs to fill 30,000 jobs annually until 2016, and
70 percent of those jobs will replace current workers. The region
is not producing enough skilled workers to fill replacement
jobs, including those in the tech sector. Also, some of the fastestgrowing
industries are in community infrastructure, including
health services, education, transportation and others. Meeting
work force needs in these areas is crucial, as they provide the
backbone of support that allows other industries to flourish.
“We need a strong system of work force development
to support adult worker retraining and transition,”
says Emmett D. Carson, Ph.D., CEO and president of
the community foundation. “The cost of inaction will
undermine the region’s innovative capacity and overall
competitiveness and, with it, our regional prosperity and
quality of life.”
For the full index and special analysis, visit
www.siliconvalleycf.org/ONE/31c.
Beyond the 3Rs
In March, more than 100
donors and leaders joined
top thinkers to learn what
skills students will need
to succeed in the future.
“Beyond the 3Rs: Literacies
for the 21st Century”
featured a distinguished
panel of experts including
Linda Darling-Hammond,
leader of President Obama’s
education transition team;
former Adobe Systems
CEO Bruce Chizen; and
Gary Knell, CEO of
Sesame Workshop.
These experts led a
rich discussion about
innovations in digital
learning, the skills
employers require and
the national policies
needed to support our
schools and students.
eBay’s Bid for Business Services
When eBay Foundation became an independent, private foundation on Jan. 1, 2009, it marked milestones for both eBay
and the community foundation. eBay Foundation started as a donor advised fund at a parent organization of the community
foundation in 1998; since then, it has made more than $18.5 million in grants to further its mission to contribute to the
economic and social well-being of local communities. Now, it has evolved and will design and operate its own grant programs.
It also has become the first fee-for-service client of the community foundation’s new business services department, created
in 2008 to harness the power of corporate philanthropy. The community foundation will continue to manage the assets of the
private eBay Foundation and will provide accounting, audit and other support services under the new structure. Read more at
www.siliconvalleycf.org/ONE/31d.
A Soaring Report
T a k i n g
In February 2009, the community foundation published Taking Flight in Turbulent Times, a report that
reviews the lessons learned in our first two years and highlights the generosity of our donors and
corporate partners. In 2008, a year filled with difficult economic news, our philanthropic funds increased
grantmaking to $264 million. The community foundation distributed $5 million to help safety-net services
in crisis through our own grantmaking and the safety-net fund contributions of donors and corporate
partners. Read about these successes and others at www.siliconvalleycf.org/ONE/31e.
F l i g h t
i n T u r b u l e n t
T i m e s
A Report from Silicon Valley Community Foundation
2009
Jorg Greuel/Getty Images
www.siliconvalleycf.org
innovation through philanthropy 15

What If
By John L. Maltbie
What if children really were our future
Scott Bushman
How many times have we heard it said, “Our children are our future” But in tough times,
services for children are the first to be cut. California’s annual budget has become an exercise
in alchemy—promising too much and delivering too little. As our economy sank into the
worst recession since the Great Depression, taxes were raised and $15 billion in services were cut.
Who will bear the brunt of these cuts as they trickle down to local governments Our children.
What if politicians acted like they really believed our children were our future The
fundamental problem is that children don’t have a seat at the table when budget and funding
decisions get made. They can’t vote, and they don’t have PACs.
These are hard times, and tough decisions have to be made. But are we making the right
decisions Are we making wise strategic choices that lay the groundwork for our future safety
and prosperity We are told that education and health care for kids have to take their fair share
of cuts because they cost so much. In education, California already ranks near the bottom of
states in per-pupil funding and achievement. We know that to be successful in the global
economy of the 21st century, we will need a knowledgeable and well-trained work force.
The United States continues to have the poorest health care results for children among
leading industrial nations. Our state ranks among the worst in childhood obesity.
Asthma rates have risen sharply in the past 20 years. Nearly 1 million children have
no health coverage. Children who are healthy are more likely to attend school, get
more out of their education and become healthy, productive adults. When did our
children’s health become a luxury we can no longer afford
What if the next time the “Big Five” (the governor, speaker of the Assembly,
president pro tem of the Senate and the minority party leaders in both houses) talked
about the budget, they included a group of children and explained to them why their
services were being cut Or what if, before a legislator could vote on the budget, he or
she had to spend a day teaching at an intermediate school, working at a public health
clinic or handing out basketballs at an evening recreation program
What if children really had “rights” like you and I do Last year, the San Mateo County
Board of Supervisors took a step toward that future by adopting a Children’s Bill of Rights,
developed by the Peninsula Partnership Leadership Council and the San Mateo County Youth
Commission. The bill has been endorsed by Silicon Valley Community Foundation and local city
councils and school boards.
Under this Bill of Rights, children are entitled to “access to a 21st-century
education that promotes success in life . . . and . . . a healthy, mind, body and
spirit . . . to maximize their potential.” If legislators had to consider these
rights when making decisions, California’s budget priorities would almost
certainly change. We would truly invest in our future instead of just
talking about it. one
c
To read the Children’s Bill
of Rights and learn more, visit
www.siliconvalleycf.org/ONE/31f.
c
John L. Maltbie recently retired as county manager
of San Mateo County after nearly 20 years on the job.
16 innovation through philanthropy www.siliconvalleycf.org

Leave Your Legacy
Nancy Scammell dreamed of honoring her family’s long
history in the Bay Area. Though she passed away in 2007,
her dream of providing perpetual support for educational
programs has come true. Nancy’s will designated Silicon
Valley Community Foundation to receive her estate, including
the family home, to create an endowment for education. Now
the region’s children will benefit from the generous support
of the Scammell family for many generations to come.
at Silicon Valley Community Foundation
www.giverealestate.org
Learn more about how you can leave a legacy for the community.
Call 650.450.5444 or email donate@siliconvalleycf.org

During this challenging economic environment,
everyone is re-evaluating their investments and
resources. At Silicon Valley Community Foundation,
we are seeing increased demand for the services
we provide to private foundations and corporations.
We can streamline your costs
and workload, leaving you
free to focus on giving.
Find out how you can outsource the administration
of your private foundation or corporate giving
program to an industry expert. Explore how
you can turn your private foundation into an
easy-to-manage advised fund. Find out why
nearly 40 of the most well known corporations in
our region work with the community foundation.
Call 650.450.5444 or email donate@siliconvalleycf.org