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 organizations that call on us all of the time,” he explains. “I got frustrated by having to say no a lot.” He too says that watching Dell give away so much money inspired him to act.

Bock arrived at the concept of equity donation on his own, even though the Silicon Valley Entrepreneurs’ Foundation had already been founded on the same principle. In October 1997 he set aside some Dazel stock so that it could be donated later, in a liquid form, once his company realized its potential. Last June, Dazel was acquired by Hewlett-Packard for more than $100 million. By then, the stock that Bock had set aside was worth ten times its fair market price when he donated it. Vanderveldt had also discovered that normal philanthropic vehicles didn’t work for her, as she had no time to volunteer and little money to give away. Independently, she came to the realization that she had something—a stake in her company—that might be worth a lot in the future. Wanting to avoid the hassle of setting up a trust, she decided to distribute some of her personal stock to worthy charities.

Once Vanderveldt and Bock started proselytizing about their way of giving, they soon found each other, and the idea for the Austin Entrepreneurs Foundation was born (a gift of $50,000 from Dazel’s charitable fund provided the money to start it). “The concept is very powerful when you extend it beyond one company,” Bock says. “When many companies participate, you increase the odds that there will be a significant payoff. In effect, you get the portfolio theory working on behalf of the community.”

Still, the project didn’t really get off the ground until John Thornton became involved. Thornton is a general partner at Austin Ventures, the country’s third-largest venture capital firm, and therefore able to appreciate just how much new wealth is being created in Austin. “The thing that was alarming to me was the lack of urgency about making this happen now,” recalls Thornton. “What made me nervous was how much money was being left on the table.” To illustrate his point, Thornton mentioned Vignette, a portfolio company of his firm’s. “Had we started this foundation when we first talked about it, the contribution that we could have gotten from Vignette would already be worth several million dollars.” Thornton himself raised $650,000 in additional start-up capital for the Austin Entrepreneurs Foundation. “This is a watershed moment,” he says. “It’s getting very big, very fast. It seemed almost criminal that some of that wealth would not be invested in our community.”

In September Bock, Vanderveldt, and the others recruited Paula Fracasso to be the foundation’s executive director. Fracasso, who formerly ran the Austin Parks Foundation, has been soliciting gifts of stock from start-ups that will be held in trust until the companies decide where the money should go. In December Fracasso traveled to California to meet with executives of the San Francisco Entrepreneurs’ Foundation, which in just three years has amassed a $4 million endowment.

All this high-minded activity may be just in time. The downside of a high-tech boom is heavy traffic, high rents, and other complications that irritate longtime locals; civic-minded generosity can ease some of the pain. “We started down this path before a lot of those stresses started to appear,” says Dell’s Tom Green. “We started doing this for all the right reasons. The fact that it may have good consequences, like preventing a backlash, is just gravy. If this economy holds, I think we’re at the outset of a significant transformation. We’ve only scratched the surface so far.”