It probably feels like it was a century ago, but we’re only several decades removed from a time when ambitious young entrepreneurs like Pierre Omidyar, Jeff Skoll and Tim Gill, flush with riches from the dot-com boom, kicked off the second generational wave of tech giving.
This group also included Yahoo! cofounder David Filo, who established the San Francisco-based Yellow Chair Foundation in 2000 with his wife Angela. The Filos may not be a household name, but their foundation, which was renamed the Skyline Foundation last year and has four program areas — Climate Solutions, Just Democracy, Equity in Education and Birth Justice — has disbursed $350 million in grants since its inception.
Another defining characteristic of second-wave tech donors is that their wealth and charitable ambitions have broadened substantially over time. David, who has a net worth just south of $7 billion, and Angela, made a combined $269 million in contributions to the foundation from the fiscal years ending December 2018 to 2022. As of December 31, 2023, the foundation had $964 million in net assets and disbursed $65 million during the year. These figures were up approximately 55% and 196%, respectively, over the fiscal year ending December 2020.
The foundation is also an instructive case study in how megadonors can embrace trust-based grantmaking practices. About 90% of the $65 million the foundation awarded in 2023 came in the form of multi-year, unrestricted support, which can empower organizations to think less about paying the bills and more about strategically tackling complex and interconnected challenges.
“Our core mission is to move money to organizations that address problems at their roots,” said executive director Angie Chen in a July conversation. “If we’re acknowledging that organizations are working on complicated systems change issues, we want to give them space for risk and creativity.”
“We’re not setting budget caps”
In 1994, David Filo founded Yahoo! with fellow Stanford engineering student and future megadonor Jerry Yang. Six years later, David and Angela, the latter of whom is a photographer, educator and Stanford alumnus (she also serves on the school’s board of trustees) established the Yellow Chair Foundation. “Their motivation,” Chen said, “was a sense of responsibility to return the wealth that David and Jerry had created through Yahoo! back to society.”
The Filos started out making small grants on their own, but over time, they needed assistance. And so, beginning in 2008, the foundation engaged a partnership with San Francisco-based philanthropic consultancy firm Pacific Foundation Services, whose staff advised the Filos on their grantmaking and provided back-office support.
The couple’s partnership with Pacific Foundation Services may seem like a perfectly reasonable development, but it speaks to a key challenge facing living donors looking to oversee a foundation while maintaining all-consuming day jobs.
After crunching Form 990 data from the 40 largest U.S. foundations by total assets, FoundationMark’s John Seitz recently determined that 17 of the 36 foundations for which information was available for the last five years failed to hit an average 5% payout during that time frame. Seitz theorized that some foundation program officers, unable to effectively disburse the enormous wave of funding generated by a flush stock market, basically kicked the grantmaking can down the road. Better to keep that money in the endowment where it could grow, they reasoned, than irresponsibly move it out the door.
In contrast, the Filos’ partnership with Pacific Foundation Services illustrates that there are other ways foundations can get money into the hands of working nonprofits – that is, by using the growing array of philanthropic consultants and intermediaries on hand to help donors give. Again, this isn’t a particularly revelatory takeaway, but the numbers in Seitz’s analysis don’t lie. If his hypothesis is at least partly correct, then foundations don’t hit the 5% figure because some leaders may opt against tapping third-party expertise to help them allocate their grantmaking dollars.
Fast forward to 2023. What was still known as the Yellow Chair Foundation had significantly grown its grantmaking and as a result, the Filos, who comprised the board, decided to directly hire the foundation’s staff, including Chen, who had the distinction of being the first executive director of the Yellow Chair and Skyline Foundation. Pacific Foundation Services continues to provide the foundation with back-end services like accounting and HR support.
Chen took the reins last April and the foundation changed its name to the Skyline Foundation in June. Previously, Chen had served as the director of programs at the Libra Foundation. “What drew me to the Skyline Foundation is how the board has a common orientation to the one we had at Libra, where they’re centered around the expertise and leadership of grantee partners,” Chen said. “I appreciated how the board articulated a sense of urgency. We’re not setting budget caps; instead, we’re setting a grantmaking floor each year, so I was excited to be a part of that.”
A commitment to trust-based grantmaking practices
The foundation’s grantmaking reflects the Filos’ belief that unrestricted, multi-year support can empower grantees to change systems. “We want to demonstrate our respect for the grantees and their expertise and that we’re willing to learn from them slowly, give them the time and flexibility to achieve their visions,” Chen said.
The foundation also subscribes to the idea that when it comes to grant size, sometimes bigger is better. Its two largest program areas, Climate Solutions and Just Democracy, support organizations operating in “areas that are in crisis,” Chen said. A scan of the foundation’s 2024 grants shows big commitments to the electrification nonprofit Rewiring America ($4.5 million over three years), New Energy Nexus ($2.25 million over three years) and news organization the Marshall Project ($1.2 million over three years).
Making large gifts may sound intuitive, but funders often worry that organizations — there’s no way to put this delicately — can’t be trusted to responsibly handle a massive windfall. The good news is that the Center for Effective Philanthopy’s research on MacKenzie Scott’s unrestricted mega-giving has shown that, despite some cases of mismanagement and malfeasance that suck up media attention, these fears are mostly overblown. The bad news is that the elephant in the room isn’t nonprofit leaders’ lack of managerial acumen. It’s the issue of perpetuity.
Funding leaders recognize that dramatically increasing grant amounts without a concomitant rise in incoming contributions can threaten a foundation’s perpetual status. But charitable vehicles helmed by living donors like the Filos, who are willing to replenish the coffers, can support substantial grantmaking without worrying as much — if at all — about putting the foundation on a path to spending down.
Journalism is “essential to a thriving democracy”
Throughout our conversation, Chen stressed the Filos’ belief that the foundation views itself as a partner, rather than a box-checker imposing its perspective on recipient nonprofits. This philosophy informs how Chen and her team assess impact. “Our definition of effectiveness is if we are effectively supporting the grantees,” she said, “because they’re the ones holding the strategy and vision.”
The foundation’s program officers also collaborate with their funding peers. For example, Jenny Montoya Tansey, the senior program officer for the foundation’s Just Democracy program, serves on the management committee for Press Forward, the collaborative effort led by the MacArthur Foundation that aims to move $1 billion for local news. The Skyline Foundation was one of Press Forward’s initial partners, and its commitment underscores the Filos’ “vision around journalism as being essential to a thriving democracy,” Chen said.
This year, the foundation announced multi-year grants to journalism nonprofits Deep South Today, Futuro Media Group and Type Media Center, while in 2023, it made a five-year, $5 million commitment to ProPublica, where Angela Filo, who holds a master’s degree in journalism from the University of California, Berkeley, sits on the board. “Just like our involvement in Press Forward,” Chen said, “we’re supporting organizations that are ensuring communities across the United States are receiving news in ways that work for them.”
One last point. While it’s clearly useful to pull numbers from a private foundation’s Form 990s, the exercise rarely captures the totality of a donor’s giving. As the Skyline Foundation’s site notes, the foundation and the Filos’ “coordinated donor advised fund” distributed a combined $392 million from 2000 to 2023 — recall that the foundation’s grantmaking since inception sits at around $350 million. This is a valuable data point since individuals moving money through donor-advised funds are not required to publicly disclose grant amounts or recipients.
In March, the Filos were in the news when Angela’s alma mater, the UC Berkeley Graduate School of Journalism, announced that the couple made a $10 million pledge to kickstart the five-year $54.4 million Campaign for Berkeley Journalism. According to the foundation, the gift, which builds on the Filos’ extensive support for the school, was made through their donor-advised fund in alignment with their charitable vehicle’s programmatic priorities. So with the Filos, we know where some of their DAF money is headed. But that’s far from universally the case where living billionaires are concerned.
