Benioff bets big to back Prop. C
Salesforce CEO opposes Breed on aid to homeless
Billionaire Salesforce chief Marc Benioff is going all in on supporting Proposition C, the November ballot measure that would tax the biggest businesses in San Francisco to raise as much as $300 million for homeless programs, pledging what amounts to at least $2 million to help pass the measure.
The entrance of the cloud software mogul into the campaign — his strongest purely political action to date, and one that could cost his company millions of dollars in new taxes — forcefully highlights the split between the two philosophies surrounding the measure.
One side, led by the city Chamber of Commerce, says suddenly infusing hundreds of millions of dollars into indigence programs would be fiscally
irresponsible and would mostly just attract more homeless people to the city. And the other, led by the San Francisco Coalition on Homelessness and communitybased organizations, says a surge of funding toward compassionate programs would dramatically clear the streets.
Benioff, who in recent years has donated millions of dollars to house homeless families and vigorously advocated for more street programs, said the only way to significantly reduce the crisis of 7,500 individuals and 1,200 families languishing in the streets, and to get ahead of the inflow, is to scale up government spending. In the case of Prop. C, that means an amount of funding that essentially doubles what San Francisco already spends to assist homeless people and keep them housed.
Given that homelessness has for years been commonly listed as the city’s No. 1 problem, “We need to be super aggressive about this,” he said.
There is risk involved in taking such a huge leap, he admitted. But the economy is booming and the public’s frustration with the street problem is as high as its desire to have the crisis solved. So it’s a risk well worth taking, Benioff said.
“I’m excited about Prop. C,” he said. “It’s exciting because it’s a program we can get going now.”
Benioff told The Chronicle Monday that he and his company will give a collective $1 million — $500,000 from himself, $500,000 from Salesforce — to the Prop. C campaign and then spend about $1 million or more on his own advertising campaign supporting the proposition. The ads are expected to go out over radio, television, print and digital media sometime next week, and include at least one pitch by a celebrity as well as pictures humanizing homeless people and their needs.
Prop. C would impose an average of about 0.5 percent in gross receipts tax on corporate revenue above $50 million. A report by the city’s Office of Economic Analysis last month concluded the economic impact would be “small,” and that the funding would probably reduce the homeless population. The money would, among other things, provide housing for 5,000 people, pump as much as $75 million into mental health programs and create 1,000 new shelter beds.
Opposition to Prop. C picked up momentum last week when Mayor London Breed and two state legislators all said in statements that there wasn’t enough accountability in the measure to ensure funding would be properly spent. But Benioff, whose Salesforce is one of the biggest businesses in town with $13 billion in expected revenue this year, says he thinks he can turn the tide and pull other big business leaders out of the shadows.
Salesforce would have to pony up about $10 million more a year in taxes if Prop. C passes, Benioff said — “but it would be well worth it.” He said recent federal tax cuts saved the company more than that.
Reps. Nancy Pelosi, D-San Francisco, and Jackie Speier, D-San Mateo, and some city supervisors, including Hilary Ronen, are other high-profile proponents of Prop. C.
Breed said she appreciated Benioff ’s sentiments, but they did not change her mind about the proposition.
“Marc and I have talked a lot about homelessness, and I respect and appreciate his passion and what he does with his company,” she said in a statement to The Chronicle on Monday. “But with respect to Prop C, as the leader of the city, who is responsible for our budget and our economy and addressing all of our City’s challenges, I have to make decisions with my head, not just my heart.
“I do not believe doubling what we spend on homelessness without new accountability, when we don’t even spend what we have now efficiently, is good government. I have to think about how this will affect our entire economy, including retail businesses, like grocery stores, auto dealers, and department stores, and manufacturing jobs.”
“I absolutely do agree business can pay more to address our homeless crisis, which is why I will lead the effort to do this the right way as mayor, and I look forward to continuing to work in partnership with Marc and others to do that,” she said.
Benioff said he, in turn, respected Breed’s position, but believes that he has more freedom to back the measure since he is not an elected official.
“I can understand this is not a risk that she can take,” he said. “But as a private businessman, as a private entrepreneur, and as a fourth-generation San Franciscan, this is a risk that I can take.”
Benioff and other backers of the measure are aiming for a two-thirds vote in favor of Prop. C, saying the margin of passage would help avoid legal challenges from those who say just over 50 percent would not be enough under state law.
Jess Montejano, a spokesman for those opposed to Prop. C, said he doubts the tech leader’s entrance into the political debate will change the tide. Businesses do want the street problem solved humanely, he said, but Prop. C raises the fear that higher taxes will drive firms out of the city, while at the same time attracting homeless people for programs paid for by Prop. C that may or may not work.
“Voters citywide understand that the homeless budget has tripled over the past decade but homelessness has still increased,” he said. “They understand that more money with no plan is not a serious approach to addressing our city’s most pressing issue.”
The anti-Prop. C campaign has so far raised about $100,000, but Montejano said he is confident hundreds of thousands of additional dollars will come in, and “we will have enough resources to effectively communicate our message to voters citywide. There’s no doubt about that.”
Before Benioff ’s pledge, the pro-Prop. C campaign had raised about $400,000, and its main spokesperson said she was thrilled with the new backing. “We have seen the real-life impact of Benioff ’s contributions in housing homeless families,” said Jennifer Friedenbach, head of the Coalition on Homelessness. “He is leading with the values San Franciscans share. We look forward to winning this campaign and tackling homelessness together.”
Benioff said simple math is one reason he supports the measure. The $37 million, twoyear-old Heading Home Initiative he helped start with the city for housing homeless families — he donated $11.5 million — has housed nearly 400 families through rent subsidies. He said the success of that leads him to believe that spending not much more than $35,000 apiece on stabilizing every homeless person could practically clear the streets.
That comes to a bit more than $250 million for all 7,500 individuals in the street — about what would be raised by Proposition C.
“At the end of the day, it’s going to be — are you for the homeless or not for the homeless? For me, it’s binary,” he said. “I’m for the homeless.”