San Francisco Chronicle - (Sunday)
John Diaz: Not sold on Benioff ’s pitch for Prop. C on homeless
Salesforce founder Marc Benioff is putting a twist on the conventional CEO claim that nurturing a vibrant business environment through lightened taxes and regulation is the key to giving government the resources to fund social programs.
In pitching for a tax increase measure on Tuesday’s San Francisco ballot, Benioff is arguing for reverse order: that nearly doubling city spending on its most pervasive social ill is essential to preserving the city’s business climate.
The tech titan is applying his checkbook and the full force of his personality on behalf of Proposition C, which would tax 300 to 400 of the city’s largest businesses to raise about $300 million a year for homelessness programs. Benioff has poured about $8 million in personal and company funds into the Yes on C campaign.
His late surge into the campaign goes well beyond the issue at hand. It has become an in-your-face challenge to his fellow CEOs and entrepreneurs to take responsibility for the plight of the city in which they have prospered.
“Is the business of business just business? Or is the business of the business improving the state of the city?” Benioff said during a breakfast meeting Monday with Chronicle Publisher Bill Nagel, Editor in Chief Audrey Cooper and me.
He was neither shy nor coy about his reason for requesting the meeting. He hoped to persuade The Chronicle to withdraw its opposition to Proposition C. He acknowledged the ask was “maybe too crazy” to contemplate. It certainly would be unprecedented to overturn an endorsement, at least in my 22 years as this newspaper’s editorial page editor. (Note: The Chronicle’s news and opinion operations are kept independent of one another; I do not make news section judgments, and Cooper is not involved in endorsement decisions.)
“We need a lot of money, and we need it now,” he said. “If we don’t get Prop. C, where does it come from?”
While it’s not unusual for any endorsement to elicit detractors who call and send emails, I can’t recall a more direct and impassioned pitch than the one made by Benioff.
“I’m not telling you that you should do it ...” he said with a smile near the end of the meeting.
Except he was.
But we won’t. Here is why: While Benioff ’s intervention has changed the political dynamic of Prop. C — elevating its chances of passage — our editorial board’s fundamental concerns about the measure remain. We wholeheartedly agree with Benioff that reduction of homelessness to the extent humanly possible should be the city’s No. 1 priority. Our editorial board also has consistently acknowledged that it will require more money — beyond the $380 million the city now spends on homelessness — to truly make a difference.
However, we also have consistently argued that the city needs to get a better handle on the effectiveness and efficiency of the money it now spends through eight city departments and more than 70 private and nonprofit organizations in 400 contracts. Under Jeff Kositsky, overseer of San Francisco’s homeless programs, the city has been making strides in scrutinizing its spending, but no one would argue that it has yet to root out all duplication and ineffectiveness.
Voters should note that Prop. C requires the city to maintain its $380 million baseline spending. Is there any doubt that the infusion of an extra $300 million would ease any pressure on the city to hold those existing programs accountable?
As our Sept. 30 editorial noted, “Prop. C suggests that money, alone, is the cure-all to homelessness. It is not.”
Our rare front-page editorial on July 3, 2016, “A civic disgrace,” noted many of the elements that would be essential to tackling homelessness. This is not just a San Francisco problem: “It needs to be approached regionally, statewide, even nationally.” Also, in a concept that is painful but necessary to confront, San Francisco “needs to shed any perception that it is a sanctuary for people who are unwilling to participate in programs designed to get them off, and keep them off, a life on the streets.”
Prop. C avoids those tough issues.
It is worth reminding that some of the main architects of Prop. C have opposed everything from Gavin Newsom’s Care Not Cash plan to the implementation of the state Laura’s Law to compel outpatient treatment for mental illness to conservatorships for chronically homeless people who can’t care for themselves. They have condemned laws against aggressive panhandling, tent encampments and defecation and urination in the streets as “criminalizing poverty.”
Thus, the investment from Prop. C is considerable, but the strategy is incomplete.
Benioff is not naive about the inefficiencies in a bureaucracy. He pointed out that any operation, even a business as successful as his, has a certain level of inefficiency. Still, he sees Prop. C as a difference maker — and it frustrates him to no end that his fellow CEOs fail to share his moral indignation or sense of urgency about homelessness.
For philanthropist Benioff, homelessness has long been one of his main causes. He and his company have poured millions into programs such as the nonprofit Hamilton Families, which helps families get into permanent housing. Benioff can quickly rattle off examples of its innovations and results, and suggested that Prop. C would allow the city to offer that and other services at greater scale.
Benioff decided to get involved with Prop. C about a month ago when he started getting calls against it from some of the same business leaders who had not bothered to donate to programs for homeless kids.
“That got my psychic attention,” he said, and he was off and running — and
“We need a lot of money, and we need it now. If we don’t get Prop. C, where will it come from?” Marc Benioff, Salesforce founder
spending — as the unofficial yet undeniable face of Yes on C.
He has scoffed at the notion that the city’s wealthiest companies could not afford the tax. As for the argument that the tax could cost 700 jobs citywide, Benioff said, “That’s how many I hire in 90 days.”
Benioff ’s attempt to jolt the conscience of the tech class enjoyed a godsend in the form of a tweet from his pal Jack Dorsey, the head of Square and Twitter, who wrote that he wanted to help fix the homeless problem but “I don’t believe this is the best way to do it.”
Benioff tweeted back: “Exactly (how) much have his companies & personally given back to our city, our homeless programs, public hospitals and public schools?”
The tweet war was on, and the exchanges between the two billionaires went viral. Proposition C was suddenly getting national attention. Benioff had an opinion piece in the New York Times and has been making the rounds on national television in the past week, as he noted during our breakfast meeting.
For Benioff, all of this is in service of his hometown.
“We’re not the first company like this,” he explained, suggesting that Salesforce was following “part of a lineage” of companies such as Levi Strauss, Wells Fargo and the Gap, or business leaders such as the late Warren Hellman, the Haas family and Donald Fisher, in using their economic and political clout to enrich the city in so many ways.
I may disagree with Benioff on the wisdom of Proposition C, but there is something to admire about an entrepreneur at the top of the San Francisco skyline breaking from his business brethren to stand for what he is convinced is the public good, even at the expense of his own company’s bottom line.
In doing so, Benioff is forcing an overdue reckoning among the rest of the tech billionaires who were under the illusion that their value to San Francisco could be measured solely by the size of their payrolls and height of their office towers.
That worthy conversation is sure to continue no matter what happens on Nov. 6.