SV2 was born in a coffee shop rather than a garage, but it had much in common with the start-up companies of Silicon Valley legend. At Palo Alto’s University Coffee Café, Laura Arrillaga-Andreessen, a business student with a passion for philanthropy, pitched Community Foundation president Peter Hero with an idea for a new giving vehicle modeled after Silicon Valley’s venture capital style of investing.
Today, SV2 has grown into an organization of national acclaim. Formally launched in 1998 as a fund of Community Foundation Silicon Valley, the Silicon Valley Social Venture Fund (SV2) consists of a partnership of investors who pool their resources for the advancement and effectiveness of nonprofit organizations.
“SV2 is many things to many people,” said Hero, the head of the nearly 50-year-old philanthropic foundation, Community Foundation Silicon Valley. “To first-time givers, it provides a primer on effective philanthropy. For those more experienced, it’s a chance to interact with others who share their interests."
As a graduate student at Stanford University, Arrillaga-Andreessen developed the business plan for SV2 after analyzing why young tech executives were amassing great fortunes but giving comparatively little back. Her theory was that there was more than mere “cyber-stinginess” at work, and her research bore that out: There was simply no model for giving that addressed their unprecedented circumstances.
“Philanthropy is typically something that’s done when one is 65 and retiring,” Arrillaga-Andreessen said. “Until the tech revolution, individuals rarely accumulated a lifetime of wealth in such a compact time period.”
According to Arrillaga-Andreessen, “A myriad of factors was fighting against this new generation engaging and giving back to their communities. The vast majority of those now able to give weren’t from Silicon Valley, so they didn’t have ties to charitable organizations. Most didn’t come from wealthy families with traditions of giving. Finally, the process of choosing worthy organizations among the thousands of local nonprofits can prove a monumental task.”
The Community Foundation, meanwhile, reported similar issues in its landmark study Giving Back: The Silicon Valley Way, which concluded that the most effective way to reach young professionals was through their peers. “The workplace was more influential in their involvement in philanthropy than was the church, or schools, or other ways of giving,” Hero said.
While the new generation of givers was relatively small in number, “they set a whole new standard of engagement and accountability,” Arrillaga-Andreessen said. “Many of these people were able to retire and get engaged in philanthropy while they were at the height of their business savvy, and they wanted the same accountability out of their social sector investments as they did from private sector investments.”
That concept formed the basis of SV2’s guiding objectives: to help nonprofits build their organizational capacity and to help Partners build their own philanthropic capacity.
After being incubated by the Silicon Valley Community Foundation for ten years, SV2 became an independent 501(c)3 in 2008.
Over the last 12 years, we have developed a strong portfolio of Grantees. Our Partner engagement with these evolving nonprofits continues to grow, and, consequently, countless lives are both directly and indirectly changed for the better. Furthermore, SV2’s educational programs have expanded into a diverse breadth of philanthropic resources for our Partner-investors. Most of our Partners have increased their own philanthropic impact, and, in many cases, expanded it, as well.