Politics

Beyond the megadonors, Silicon Valley is still stingy about donating to politicians

The tech industry has minted some of the wealthiest people in the world in record time. But many of them are still reluctant to get in the arena.

Beyond the megadonors, Silicon Valley is still stingy about donating to politicians

Despite the industry's enormous wealth, Big Tech is still giving relatively small amounts to politicians, compared to other industries.

Image: Getty Images

Silicon Valley has minted some of the world's wealthiest people in record time. But compared to other industries, a new analysis by Protocol shows, a relatively small slice of that wealth is being spent on the 2020 election. While the past decade has made millionaires and billionaires of loads of tech founders and Big Tech leaders, most of them remain deeply reluctant to donate to politicians.

"My read, as a member of the tech community, is that we have significantly large percentages of our community who have the ability to give to campaigns who just aren't," former Pete Buttigieg national investment chair Swati Mylavarapu told Protocol this spring. Mylavarapu and her husband, Matt Rogers, the co-founder of Nest, committed to giving $2 million to political campaigns before July 2020. "If you look at the subset of people who are actually hosting fundraisers and making contributions, it's a surprisingly small percentage," she said.

Sure, Big Tech's political megadonors have spent lavishly on Democratic campaigns this election cycle. According to a recent count by Recode, the top 15 donors who have made their money from tech have given a whopping $120 million in federal campaign contributions over the last two years. And contributions across the industry are growing substantially compared to elections past. But look beyond the shortlist of megadonors — beyond the Karla Jurvetsons and Dustin Moskovitzes and Reid Hoffmans — and Silicon Valley's contributions to politicians, particularly the ones running for president, begin to look stingy compared to other industries.

A recent Forbes analysis of U.S. billionaire contributions to Trump and Biden found that tech billionaires are both outnumbered and outspent by billionaires from the financial sector. That's despite the fact that eight of the top 10 richest people in America made their money from tech.

According to data from the Center for Responsive Politics, among the top 20 donors to all federal campaigns and committees this cycle, only two — Jurvetson and Moskovitz — made their money from the tech industry. (Three if you count Michael Bloomberg, which we are not.)

These figures don't include contributions to dark money groups, but are telling nonetheless. And remember that when tech founders got rich, from Facebook or Google or Microsoft or PayPal, they weren't alone: In lots of cases, a swath of early investors and employees got rich, too. But according to data from The Center for Responsive Politics on total donations to the 2020 presidential race by sector, donors from the tech industry don't even make it into the top 10.

Those numbers don't include contributions to down-ballot races and can, of course, be skewed by a single individual like Sheldon Adelson, the casino magnate and Republican megadonor who consistently puts the casino industry on the map.

Tech companies are similarly scant when the data is sliced to show top donors by organization. The Center for Responsive Politics tracks donations both from corporate PACs and from individuals who work at those companies, which means it would include not just the megarich CEOs and founders of big tech companies, but all of their employees, too. Even so, according to the figures, the only tech company among the top 20 organizational donors this cycle was Alphabet, which clocked in at No. 14. Only two others — Microsoft and Amazon — even make it into the top 50.

Protocol also recently analyzed the biggest donors at Amazon, Apple, Facebook, Google and Microsoft, and found that not only had none of the companies' CEOs made large donations to candidates this cycle, but the average size of the top donors' biggest checks was just over $183,000 — sizable, but far short of the seven-figure checks that the largest donors are writing.

"There are a large number of uber-wealthy people who just don't want to get hit," said one top Democratic fundraiser who asked to remain anonymous. "For them to have such large checks under their name would put their companies needlessly in harm's way by the Republicans. There's no point."

Silicon Valley wealth extends far beyond the big five companies, of course. The past decade has made billionaires of dozens of founders whose companies either sold or went public, but many of them are also hesitant to donate to politicians. Protocol compared Federal Election Commission records to data on the top 20 U.S. venture-backed tech exits of the last decade provided by PitchBook and found stark differences between founder-CEOs and founders who have moved on or taken on less public roles within their companies.

Case in point: While Mark Zuckerberg has focused his political giving on ballot measures and election preparedness this year, his Facebook co-founders Moskovitz, Chris Hughes and Andrew McCollum have spent big supporting Biden and other Democrats. Moskovitz, in particular, has spent some $24 million up and down the ballot this cycle.

It's similar across the sector. While Twitter's Jack Dorsey contributed small amounts during the Democratic primary, his Twitter co-founder, Evan Williams, who now heads up Medium, has written a $250,000 check to the Biden Victory Fund. At Palantir, CEO Alex Karp has contributed $2,800 to Biden's campaign. His co-founder, Republican megadonor Peter Thiel, meanwhile gave $850,000 to a committee supporting Kris Kobach's Kansas senate primary race.

Two notable exceptions: Lyft President John Zimmer and CEO Logan Green together contributed $100,000 to the Senate Majority PAC, a Democratic group, and wrote smaller checks to dozens of other campaigns.

Concerns about appearing overly partisan at a moment when the president himself claims to be running against Big Tech are definitely standing in the way of some tech execs. But beyond the impact that donating can have on their reputations, tech donors often also prefer to have more control over how their money gets spent, according to the Democratic fundraiser. That can sometimes lead them to make bigger bets on, say, political tech companies, like Alloy, a Democratic data firm that LinkedIn founder Reid Hoffman and former U.S. Chief Technology Officer Todd Park funded to the tune of $35 million. Former Google CEO Eric Schmidt has also reportedly funded 20 political startups through an outfit called OneOne Ventures.

Raffi Krikorian, a former Uber and Twitter exec and current managing director of The Emerson Collective, a philanthropic group funded by Laurene Powell Jobs, says an equally big barrier to political donating in Silicon Valley is a lack of education. Newly wealthy techies, he says, often don't want to align themselves with one candidate or another and prefer to donate to causes that are either nonpartisan or that don't have to disclose their donors. "I've had to get on the phone with people this cycle to say […] 'You don't just have to give money to candidates. There's other places you can give your money to make a difference this cycle,'" Krikorian said. "They just didn't know this is the case."

Krikorian added: "Then you've got the Coinbases of the world, who are asshats."

While the pool of political donors in tech is still relatively small, there are clear signs it is growing. As Recode noted, the top 15 tech donors this year had given only $7 million in collective federal political contributions prior to 2016. But that election changed everything. "Trump is as anti-Silicon Valley thinking as there could ever be a politician," the Democratic fundraiser said. "There was a visceral negative response to Trump once he won."

Silicon Valley is beginning to catch up on the political money race, in other words. But it's still got a long way to go.

Fintech

Apple's new payments tech won't kill Square

It could be used in place of the Square dongle, but it's far short of a full-fledged payments service.

The Apple system would reportedly only handle contactless payments.

Photo: Nathan Dumlao/Unsplash

Apple is preparing a product to enable merchants to accept contactless payments via iPhones without additional hardware, according to Bloomberg.

While this may seem like a move to compete with Block and its Square merchant unit in point-of-sale payments, that’s unlikely. The Apple service is using technology from its acquisition of Mobeewave in 2020 that enables contactless payments using NFC technology.

Keep Reading Show less
Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

Sponsored Content

A CCO’s viewpoint on top enterprise priorities in 2022

The 2022 non-predictions guide to what your enterprise is working on starting this week

As Honeywell’s global chief commercial officer, I am privileged to have the vantage point of seeing the demands, challenges and dynamics that customers across the many sectors we cater to are experiencing and sharing.

This past year has brought upon all businesses and enterprises an unparalleled change and challenge. This was the case at Honeywell, for example, a company with a legacy in innovation and technology for over a century. When I joined the company just months before the pandemic hit we were already in the midst of an intense transformation under the leadership of CEO Darius Adamczyk. This transformation spanned our portfolio and business units. We were already actively working on products and solutions in advanced phases of rollouts that the world has shown a need and demand for pre-pandemic. Those included solutions in edge intelligence, remote operations, quantum computing, warehouse automation, building technologies, safety and health monitoring and of course ESG and climate tech which was based on our exceptional success over the previous decade.

Keep Reading Show less
Jeff Kimbell
Jeff Kimbell is Senior Vice President and Chief Commercial Officer at Honeywell. In this role, he has broad responsibilities to drive organic growth by enhancing global sales and marketing capabilities. Jeff has nearly three decades of leadership experience. Prior to joining Honeywell in 2019, Jeff served as a Partner in the Transformation Practice at McKinsey & Company, where he worked with companies facing operational and financial challenges and undergoing “good to great” transformations. Before that, he was an Operating Partner at Silver Lake Partners, a global leader in technology and held a similar position at Cerberus Capital LP. Jeff started his career as a Manufacturing Team Manager and Engineering Project Manager at Procter & Gamble before becoming a strategy consultant at Bain & Company and holding executive roles at Dell EMC and Transamerica Corporation. Jeff earned a B.S. in electrical engineering at Kansas State University and an M.B.A. at Dartmouth College.
China

Why does China's '996' overtime culture persist?

A Tencent worker’s open criticism shows why this work schedule is hard to change in Chinese tech.

Excessive overtime is one of the plights Chinese workers are grappling with across sectors.

Photo: VCG/VCG via Getty Images

Workers were skeptical when Chinese Big Tech called off its notorious and prevalent overtime policy: “996,” a 12-hour, six-day work schedule. They were right to be: A recent incident at gaming and social media giant Tencent proves that a deep-rooted overtime culture is hard to change, new policy or not.

Defiant Tencent worker Zhang Yifei, who openly challenged the company’s overtime culture, reignited wide discussion of the touchy topic this week. What triggered Zhang's criticism, according to his own account, was his team’s positive attitude toward overtime. His team, which falls under WeCom — a business communication and office collaboration tool similar to Slack — announced its in-house Breakthrough Awards. The judges’ comments to one winner highly praised them for logging “over 20 hours of intense work nonstop,” to help meet the deadline for launching a marketing page.

Keep Reading Show less
Shen Lu

Shen Lu covers China's tech industry.

Boost 2

Can Matt Mullenweg save the internet?

He's turning Automattic into a different kind of tech giant. But can he take on the trillion-dollar walled gardens and give the internet back to the people?

Matt Mullenweg, CEO of Automattic and founder of WordPress, poses for Protocol at his home in Houston, Texas.
Photo: Arturo Olmos for Protocol

In the early days of the pandemic, Matt Mullenweg didn't move to a compound in Hawaii, bug out to a bunker in New Zealand or head to Miami and start shilling for crypto. No, in the early days of the pandemic, Mullenweg bought an RV. He drove it all over the country, bouncing between Houston and San Francisco and Jackson Hole with plenty of stops in national parks. In between, he started doing some tinkering.

The tinkering is a part-time gig: Most of Mullenweg’s time is spent as CEO of Automattic, one of the web’s largest platforms. It’s best known as the company that runs WordPress.com, the hosted version of the blogging platform that powers about 43% of the websites on the internet. Since WordPress is open-source software, no company technically owns it, but Automattic provides tools and services and oversees most of the WordPress-powered internet. It’s also the owner of the booming ecommerce platform WooCommerce, Day One, the analytics tool Parse.ly and the podcast app Pocket Casts. Oh, and Tumblr. And Simplenote. And many others. That makes Mullenweg one of the most powerful CEOs in tech, and one of the most important voices in the debate over the future of the internet.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Entertainment

Spoiler alert: We’re already in the beta-metaverse

300 million people use metaverse-like platforms — Fortnite, Roblox and Minecraft — every month. That equals the total user base of the internet in 1999.

A lot of us are using platforms that can be considered metaverse prototypes.

Illustration: Christopher T. Fong/Protocol

What does it take to build the metaverse? What building blocks do we need, how can companies ensure that the metaverse is going to be inclusive, and how do we know that we have arrived in the 'verse?

This week, we convened a panel of experts for Protocol Entertainment’s first virtual live event, including Epic Games Unreal Engine VP and GM Marc Petit, Oasis Consortium co-founder and President Tiffany Xingyu Wang and Emerge co-founder and CEO Sly Lee.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Enterprise

Lyin’ AI: OpenAI launches new language model despite toxic tendencies

Research company OpenAI says this year’s language model is less toxic than GPT-3. But the new default, InstructGPT, still has tendencies to make discriminatory comments and generate false information.

The new default, called InstructGPT, still has tendencies to make discriminatory comments and generate false information.

Illustration: Pixabay; Protocol

OpenAI knows its text generators have had their fair share of problems. Now the research company has shifted to a new deep-learning model it says works better to produce “fewer toxic outputs” than GPT-3, its flawed but widely-used system.

Starting Thursday, a new model called InstructGPT will be the default technology served up through OpenAI’s API, which delivers foundational AI into all sorts of chatbots, automatic writing tools and other text-based applications. Consider the new system, which has been in beta testing for the past year, to be a work in progress toward an automatic text generator that OpenAI hopes is closer to what humans actually want.

Keep Reading Show less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins