We've all seen it dozens of times: A corporation announces a donation to a local needy cause, ribbons are cut, oversized cardboard checks float across a stage and politicians flash their pearly whites.
The company is lauded as a giver with a heart of gold. But that's the wrong way to look at many corporate donations: More often than not, the view becomes more complicated if you wait for the fanfare to die down.
Let's take Google's recent $2 million donation to homeless agencies in San Francisco as an example. No one could possibly argue the Hamilton Family Center, Larkin Street Youth Services and HandUp aren't deserving of cash to help San Francisco's homeless.
“These generous Google grants have the potential to change the lives of thousands of homeless families,” Mayor Ed Lee wrote last week in a glowing press release.
It painted Google as quite the hero.
But Rebecca Wilkins, senior counsel for tax policy at Citizens for Tax Justice, says that amount is “just peanuts,” especially compared with tax revenue San Francisco should receive considering the number of Google employees possibly living in The City.
Google doesn't pay heavy taxes in San Francisco because it's not headquartered here. But many of its employees bus from The City to its 20,000-person Mountain View campus. They sleep and party all within San Francisco's city limits, using San Francisco's infrastructure.
And Google's presence in Mountain View created a need for housing for 20,000 employees, according to news reports from Mountain View. Many have found that housing in San Francisco.
But the Bay Area doesn't distribute taxes regionally, and as our housing prices fly sky-high, there will be no corporate dollars from Google to help provide affordable housing.
Well, Google did give The City $2 million for the homeless. But for Google, “that's like a nickel to you and me,” Wilkins said.
When a city is given tax dollars, which are annual, the city decides what its priorities are, Wilkins said. But when a corporation donates, the money, usually given just once, is tied to whoever it was donated to.
Of course, Google is not the only tech employer with an impact on San Francisco's affordability issues. Twitter negotiated a tax break with The City while moving into the mid-Market Street area, and Airbnb reportedly owes The City $25 million in back taxes, and some reports say the Mayor's Office pressuring the tax collectors not to collect.
Twitter's mid-Market community benefits are the very definition of glowing corporate donations, meant to garner public goodwill. As part of the agreement, mid-Market tech companies were supposed to find jobs for Tenderloin residents. News reports from Central City Extra show the community benefit agreement has generated exactly one job, at Zoosk.
One job. That's it. And in return, Twitter got a $50 million-plus tax break.
“The bigger companies get, the more sophisticated they get in minimizing their tax responsibility,” Larry Kamer, public-relations guru and crisis management expert told The San Francisco Examiner. “It's controversial, but it's legal.”
In order to minimize those tax responsibilities, you need allies in government. A report from Public Citizen, a nonprofit, found Google spent more than $13 million lobbying federal politicians, utilizing more than 100 lobbyists. As a result, Google evaded $5 billion in global taxes last year, Reuters recently reported.
In San Francisco, tech giants only really need one ally to evade responsibility: Ron Conway.
An angel investor, Conway is known as the “Godfather of Silicon Valley.” He invested in Google, Twitter and Airbnb. He's a close ally of Lee, funding the mayor's pet causes and spending money to topple his opponents (like Assembly candidate David Campos).
“I think what we've seen with the people currently in power in City Hall is that tech, its investors, are willing to spend whatever it takes to ensure S.F. city government is at their beck and call,” Tom Temprano, a leading local progressive and president of the Harvey Milk LGBT Democratic Club told The Examiner.
So the next time a corporation hands a big check over to a city agency, think of it more as a cost of doing business. To Google, $2 million today buys the goodwill to avoid paying $50 million tomorrow.
On Guard covers issues concerning The City's political left. It prints the news and raises hell each Tuesday. Email him at email@example.com.