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The Benioff Doctrine
Jon Steinberg | Photo: Dan Escobar | April 22, 2014
Marc Benioff has a message for his rich tech friends: Give back or get out. A candid conversation with the Salesforce CEO and philanthropic alpha dog.
On February 12, Daniel Lurie was anxiously awaiting the birth of his second child when he received an unexpected phone call. Suzanne DiBianca, the executive director of the Salesforce Foundation, was ringing to find out if Lurie, the CEO of philanthropy Tipping Point Community, had spoken to her boss, Marc Benioff, yet. “I said, ‘Haven’t heard from him,’” Lurie recounts, “and she said, ‘Well, Marc has this idea called SF Gives. We’ll get 20 companies on board, have them donate $500,000 each, and all $10 million goes to Tipping Point.’” Lurie’s response? “I said, ‘I like that idea.’”
More likely, Lurie was doing backflips off his standing desk. His nine-year-old charitable organization, which has disbursed $60 million to poverty-focused nonprofits in the Bay Area, had just been tapped as the cause du jour of the biggest, loudest philanthropist in San Francisco: a man who with his wife, Lynne, just announced a second $100 million donation to UCSF; a guy who told Mayor Ed Lee to “think bigger” when Lee lowballed his ask for the city’s middle schools; a mogul who has publicly chastised his fellow tech titans for their stinginess; whose company just landed the naming rights to the tallest building west of Chicago, to be known as the Salesforce Tower—that Benioff. And the bear-size CEO, founder of the $33 billion cloud computing company, was not only offering to fundraise for Lurie’s charity; he was also proposing a strategy that would tacitly pressure dozens of other local tech firms to follow suit. (Lurie added to the sense of urgency by imposing a 60-day donation deadline, ending May 7.) The initiative was framed as a challenge, if not a threat: Join the cause or face the consequences.
Ingeniously, Benioff—whose company employs 4,000 workers in San Francisco, more than any other tech firm—was timing the SF Gives campaign to a moment when his industry’s public approval ratings were bottoming out. For a solid two years, tech companies had been browbeaten and shamed, their buses blockaded, their headquarters picketed, their goodwill depleted by turkeys like Peter Shih, Greg Gopman, and Tom Perkins. Now the Salesforce boss—who is hailed in corporate and philanthropic circles for inventing the widely replicated 1/1/1 system, which mandates donating 1 percent of stock, 1 percent of products, and 1 percent of employee hours to charity—was handing his tech brethren another readymade tool for giving back.
Not to mention, a very savvy counter-narrative. SF Gives would not only be a boon to Tipping Point—amassing in two months more than 75 percent of what the philanthropy raised in all of 2013—and a cudgel for fighting poverty and inequality in the Bay Area; it would also be a symbol of tech’s renewed commitment to its adopted home. What company could say no to that?
A week after DiBianca’s call, and just two days after his son was born, Lurie hit the phones. Using his golden Rolodex (he’s the stepson of ex–Levi’s head Peter Haas and chairs the city’s Super Bowl host committee) and Benioff ’s platinum one, he was able to quickly sign up 12 corporations—including major names like Google, Levi’s, LinkedIn, Zynga, Box, Jawbone, PopSugar, Dropbox, and, of course, Salesforce. But despite the heartening number of assents, he received a fair share of polite refusals.
For Lurie, some of them are understandable: “There have been a couple of companies that said, at this stage, $500,000 is a lot,” he explains. “They haven’t turned a profit, and they have to protect their shareholders. Some of these are really young companies that we’ve approached. I get that.”
But other leaders had something else stopping them, something that Lurie is hesitant to discuss, but that Benioff explored at length during a recent conversation in his executive suite at Salesforce headquarters. That something, he told San Francisco editor-in-chief Jon Steinberg, is ideology. A pervasive and pernicious culture of selfishness, he asserts, still hovers over his industry. And he has made it one of his life’s many missions to expunge it.
Let’s talk about the genesis of SF Gives: Did it come to you in a dream, or was it something you studied and beta tested?
I just felt it. It started in December, when I got a call from Chris O’Brien and Jessica Guynn, two reporters at the L.A. Times. They were working on this story about unrest in S.F.—the buses in our neighborhoods, the Ellis Act, people getting thrown out of their homes, broad gentrification across the city—all because of the tech boom. I talked to them on the phone for quite a long time, and they did a really good job of researching and writing their story, which then inspired a lot of other stories: USA Today wrote about it, the Wall Street Journal wrote about it, Bloomberg picked it up, and on and on. More and more, there was this conversation bubbling up nationally, with people asking, what’s going on with tech in this city?
Was this conversation giving you a sense of frustration or embarrassment about how your industry was being represented?
No. My opinion is that S.F. has a history of innovation and change. New industries and movements come out of S.F. on a regular basis. Everybody knows about the Gold Rush, the Summer of Love, gay rights—but it’s also where Bank of America was headquartered, Wells Fargo, Levi Strauss. It’s a city of innovation, of flamboyance, of transformation, and during boom times, S.F. always changes and evolves. But tied into that has always been generosity: the Haas family, the Hellmans, the Fishers, the Shorensteins. During every one of these boom times, the people who benefited the most were also giving back the most. But this time around, we haven’t been able to talk about a broad philanthropic effort to couple with the growth. So this seemed like a great opportunity.
I find it interesting that this campaign you’ve come up with isn’t just about philanthropy. It’s also a really bold stunt. You’re basically calling out tech CEOs to put up or shut up.
Well, for 15 years, my company has been doing 1/1/1. It has been a great program, and many other companies have followed us. But not everyone wants to adopt 1/1/1. CEOs look at it like a religion: You either believe in it or you don’t. I wanted to make it a little bit easier for CEOs to say yes. The first person I called was Ron Conway. I said, “Ron, what we’re going to do is get companies to give $500,000, and I’m going to raise $10 million, and we are going to give back to S.F. en masse with money from organizations, not just individuals.” He said, “This is never gonna work. I run sf.citi [a political advocacy group for 500 local tech companies], and people won’t even pay their dues. You’re not going to raise millions of dollars.” I was actually standing by Rincon Center on the street corner with cars rushing by in front of me, and I said, “Ron, this is definitely going to happen, I can feel this coming through me.”
So why is it that Ron Conway can’t collect nominal dues from his members, but Marc Benioff can collect tens of millions of dollars from the same folks?
Because this is not about any political agenda. It’s not. It’s about pure-play philanthropy: giving back to nonprofits and NGOs that can make a difference in S.F. That’s why. Tech leaders want to give, but they need a good vehicle, and they need to trust that it’ll be done with quality and integrity. That’s what Daniel Lurie and Tipping Point offer.
And you were confident of its success because...
I spend a lot of time with these other CEOs—we do dinners, lunches. They’re all very generous individually, and they want to do more, but they need vehicles. I think that they could be more generous collectively, and that was the premise. So far it’s playing out: We’re well on our way to our first $10 million of commitments. Daniel Lurie is surprised.
Yeah, I'll bet he’s giddy.
I’ll tell you why: We make three calls, we’re getting two yeses and one no. So we just keep calling. There are 2,000 tech companies within two miles of this building [1 Market Street on the Embarcadero]. We have a lot of calls and emails still to make. It’s been super easy to do. We have maybe sent a total of 25 emails, and we’ve gotten 14 yeses.
That brings us to the most obvious question: Why would any tech leader say no to this?
You get CEOs who don’t believe that organizations or individuals should give back. There’s a very famous CEO—I won’t give you his name—who told me, “Our office is not in S.F., our factory is not in S.F., and we’re not going to do this.” I said, “Don’t you think you should give back anyway?” And he said, “What have we been given?”
Yeah, so I said, “Can I use this quote in my press release?” He said, “No, I don’t want the media attention.” I told him I respect that.
But do you really respect that? it seems like you don’t.
I respect everybody’s ability to have their own view, and in my view, the people who are happiest are the people who do things for others. If you choose not to do something for others, that’s fine, but ultimately, just having success or being an innovator is not enough. I have a lot of friends who are innovators who are not happy, and they’re not happy because they don’t give. The ones who give are the happiest.
I don’t know—it seems like there are a lot of stingy, happy CEOs out there.
When I was at Oracle, I’d have this debate all the time with Larry Ellison, who has been a huge influence on my career. He’d always say, “Who do you think has done more for the world: the Ford Foundation or the Ford corporation?” Larry is very much my teacher of Zen in many ways, and that is kind of a Zen koan. It took me a few years until I came back to him and said, “I’ll tell you the answer to that question. Both. You can add value by having great employees and building great products, but you can also add value though philanthropy.” “Both” is the answer. There’s not a choice to be made. This is too easy.
You make it all sound very simple, but when you’re a CEO, you’re worried about a lot more than your own happiness, especially in tech, where so many companies go belly-up. Isn’t some of the stinginess just about survival?
As a CEO, you have a lot of ability to do amazing things: You can be an innovator and a leader, you can create shareholder value, and you can give back. It’s part of what you do. And the employees want to do it. If I weren’t doing this, I’d be holding back the desires of my employees. This is not hard. This is easy, easy, easy to do.
So why haven’t more companies signed up? not to minimize the commitment of the companies that have promised money to SF Gives, but a lot of big, public companies are MIA—Yahoo, Yelp, Twitter, Facebook—plus others like Square and Airbnb and Uber that are still private but are making enormous sums.
Well, Yelp is doing 1/1/1, and they have $50 million in their foundation. Jeremy [Stoppelman, Yelp’s chief executive officer] is awesome and a good friend of mine. He and I have had that conversation, and I’m sure he will eventually get on board, but not yet.
What is the sticking point for the others? What kind of resistance do you hear from them?
Mostly that this is not what companies do. You know, Milton Friedman said that the business of business is business. Your job as a company is not to give back. It’s to make profits.
And what do you say to that?
I say, if you want to be in this city and take advantage of all this great infrastructure—our mass transit, our schools, our hospitals, the safety and stability that we have—then also give back. These are the table stakes for doing business here. This is not a new idea. This place has a generous spirit, an innovative spirit, and it’s a beautiful spirit, a loving spirit—those are the things that mark what S.F. is really all about.
It’s also, as you’ve said, a city of civil disobedience. You’ve said before that you welcome and embrace the type of rhetoric and protests that we’ve been witnessing the last few years. But i can’t help feeling that this effort, SF Gives, is almost a counteroffensive against the protests. Do you see it as that?
I hope so, definitely. I think that it is something that needs to be part of the narrative. But we also need to take care of these other things: Regulate the buses, reform the Ellis Act, make sure we don’t have broad gentrification. And then we need to make sure that the tech industry is giving back and supporting these efforts.
The irony is pretty apparent, though. the gentrification and the evictions don’t happen without the successes of companies like yours. Is SF Gives your way of making amends?
Well, if you go to the great cities in the world—Tokyo, New York, Paris, London—they have all these same issues. If you want to buy an apartment near the Eiffel Tower, it’s going to be expensive! And you don’t have to be a rocket scientist to know that. S.F. is always going to be expensive because it’s a great city, and people want to live here: I mean, look at this [gesturing out the window at a sweeping view of the Ferry Building and the Bay Bridge]—this is unbelievable, where we are every day. But because of that, the mayor and the leaders of this city need to work hard to regulate the changes.
Here’s an annoying question: Why only 500 grand per company? That seems like a drop in the bucket for many of the companies we’re talking about.
I thought a million would be too hard to sell; $500,000 was more salable. But several companies have come in with a million.
So the strategy is working.
It’s going well, and I think it will continue to go well. We have 14 companies [as of press time in early April, only 12 had been officially announced]—blue-chip, marquee companies—and if you can get 14, you can get 100, and if you can get 100, you can get 1,000. I don’t know the time frame, but I know that it’s captured a lot of attention. When we went out to do Salesforce’s 15-year anniversary party [a free public concert, starring Janelle Monáe, on March 7 at Justin Herman Plaza], I didn’t think there would be 10 TV cameras shooting it. When we host Dreamforce, one of the world’s biggest technology conferences, it’s a phenomenon, but hardly any journalists come. We didn’t have one TV camera this year—OK, Jim Cramer came, but that was it. But right now, all anyone wants to talk about is SF Gives.
Do you worry about putting all your chips on Daniel Lurie and Tipping Point? His is a pretty small, young organization.
Well, they’re backed up by all the resources we can provide, and they know that they can fall back on us. Their job is to distribute the money, not to administer it. There are very worthwhile NGOs out there doing phenomenal work, but I think that Daniel is the best and most honest broker.
There are also more established entities like the Silicon Valley Community Foundation, to which Mark Zuckerberg donated a billion dollars last year. Why not channel money to them?
Silicon Valley Community Foundation is a bunch of DAFs: donor-advised funds. You give your money to SVCF and you get your tax write-off for the year, but [the foundation] has no obligation to administer that money.
So you see Zuckerberg’s gift as more of a write-off than a donation?
Where’s it gone? What good is it doing now? I’m sure his intentions are positive, but we need to see that money get distributed. What are his targets? What are his philanthropic interests? We know that he has a political interest with his 501(c)(4) [Fwd.us, a lobbying group pushing for tech-friendly federal policies], but what are his philanthropic interests?
So what are your philanthropic targets when it comes to SF Gives?
I want to see outcomes. That’s what I’m most interested in when I give. When we open that building [the Mission Bay campus of UCSF Benioff Children’s Hospital] in January of next year, that’s an outcome. Hope SF has provided jobs for kids and gotten them off the streets of tough neighborhoods— that’s an outcome. Year Up is providing job training for high school kids and putting them in these high-tech companies—that’s an outcome. Star Community Home is bringing homeless women with young kids and babies into high-quality shelters—that’s an outcome. We want to have clear, tangible examples of our money being put to use.
So here’s a philosophical question to conclude with: We know that tech has the power to change S.F., as we’ve seen over the last few years. But is the reverse possible? Can San Francisco values ever change tech?
I think so.
Some of your peers might disagree.
Yeah, but we’re right. We have the truth on our side. This is gonna happen. The door is open, and people are walking through it.
Originally published in the May issue of San Francisco