Ingrid Vanderveldt scanned the list of people waiting for tables at Kerbey Lane Cafe. There were eleven names before ours. “Would you mind if we went somewhere else?” she asked, flashing a conciliatory grin. It was a Saturday in Austin, and most of the city’s residents were probably trying to decide which park to spend the day in. But Vanderveldt is the president of Dryken, a nearly two-year-old high-tech start-up, so her weekend was booked up with appointments. She jumped back into her red convertible, clapped a phone to her ear, and peeled off with her fancy hubcaps twirling. It would have been easy to mistake Vanderveldt for someone motivated exclusively by hustling self-interest, but the opposite is true; she represents the high-tech industry’s desire to contribute. Over lunch at another restaurant, she explained how she helped start the Austin Entrepreneurs Foundation, an organization that promotes the concept of equity philanthropy: the donating of stock during the early stages of a company’s growth, in the hope that an eventual public offering will give the gift real value. With the involvement of people like Vander-veldt—entrepreneurs who are short on time and cash but long on potential—high-tech giving is finally coming of age.
Some would say it’s long overdue. For many years Texas techies were viewed as selfish, the kind of people who cared more about the value of their stock options than the health of the community around them. All that changed, thanks to a certain somebody who, back when he was a student at the University of Texas, started Austin’s first major high-tech success. Michael Dell’s personal fortune was estimated last October to be a staggering $20 billion, and as he’s gotten older and started a family, he’s been eager to give significant portions of that money away to causes he newly appreciates. In 1999 he and his wife, Susan, donated $6.9 million to various charities; most recently, they pledged $1.9 million to encourage parents in Travis and Williamson counties to enroll their children in the state’s health insurance program. In 1998 the Dells, along with four other Dell executives and their wives, gave a total of $13 million to the Austin Museum of Art—the largest cash gift to the arts in Central Texas, according to the Austin American-Statesman . Meanwhile, the Dell Foundation gives away hundreds of thousands of dollars every year, primarily to benefit children’s causes in Central Texas.
And that’s not all Dell is doing. In the past three years his company has run an online “direct giving” campaign that encourages employees to contribute; they have, to the tune of $4.1 million in 1999. “Stock options have created so much wealth that there’s been a wave of employee and executive giving,” says Tom Green, the chairman of the Dell Foundation. “The foundation’s giving has increased four-fold since it was started in 1996, but employee and executive giving has gone up twenty-five-fold over the past two years. Employees can log on in real time to check how the campaign is going and which teams have given the most.”
The Dell model, in turn, has inspired the creation of two foundations that hope to revolutionize high-tech giving. David Lunsford worked full-time for Dell for fifteen years—when he started at the company, there were only fifty employees—most recently overseeing its strategic investments. During that time, he began searching for a way to give something back. “Austin has great character, and we need to maintain it,” he says. “With all the growth, we need to be careful that we don’t divide the community.” Lunsford started his own foundation to boost the fortunes of struggling non-profits, but he quickly got discouraged. “I found that some non-profits were not always very wise in how they used their assets,” he recalls. “They had great passion, but they didn’t have a lot of experience with the bottom-line approach. It was difficult for me to give away some of my hard-earned assets to these loosely organized situations. Also, I’m an entrepreneur, so I was interested in the concept of leverage. I didn’t want to put in one dollar and get one dollar’s worth back. I wanted to put in one dollar and get ten dollars’ worth back.”
Getting that kind of return on his investments required more than simply writing a check—it required personal involvement. Last April, Lunsford went part-time, with Dell’s blessing, to devote more time to charity work. With seed money from his own foundation, he started Austin Social Venture Partnership. Patterned after a Seattle organization with a similar name, it operates along the lines of a venture capital firm. Partners commit a minimum of $5,000 to join, and many work closely with the groups that receive grants: They may fill seats on the boards of the non-profits, help develop their Web sites, or assist in writing business plans. “Even more than grant money, these organizations find our experience priceless,” says Lunsford. “Often they are struggling to raise money because they can’t explain what they are doing to the business community. Or they want to ramp up too quickly or too slowly. They face a lot of issues that involve business management.”
In his first year of operation, Lunsford hoped to attract ten partners, but he found thirty. The first grants were distributed in September. Lunsford would like to attract at least two hundred partners over the next couple of years, and he wouldn’t mind attracting imitators as well. He recently traveled to Dallas to speak to a group that was curious about his foundation. After hearing his talk, several listeners decided to start a similar organization in that city.
The Austin Entrepreneurs Foundation also operates on the principle of leverage, but it is aimed at recruiting donors before they get rich enough to contribute in cash. Several people played key roles in creating it, Vanderveldt among them, but perhaps the most influential is industry veteran Bill Bock, the CEO of Dazel Corpo-ration. “It’s very hard for this type of company to support the