The Wealth And Avarice Of The Cyberrich

They've made their millions--sometimes overnight--in computer chips and code rather than oil and autos. But when it comes to philanthropy, does America's current generation of the very, very rich measure up to their predecessors?

Harry Saal got rich in the tried-and-true fashion of Silicon Valley: he came up with the right idea at the right time. In 1986 Saal started Network General Corp., a Menlo Park company that makes diagnostic tools for computer networks; when the company went public three years later, Saal's personal wealth soared to $20 million. ""Suddenly I found myself with more money than I could spend in my lifetime,'' says the 52-year-old entrepreneur. Then he did something very unusual: he began a quiet, persistent campaign to give a sizable chunk of his wealth to charity. As his fortune has continued to grow, so has his giving. Since 1989, Saal has given away more than 20 percent of his net worth.

People with wealth like Harry Saal's are as commonplace in Silicon Valley as BMWs on Highway 101. But when it comes to philanthropic endeavors, Saal is a conspicuous exception. The computer business may well reflect the largest concentration of new wealth in the nation. But for an industry whose moguls have become household names, there is no one to rival the 19th century's Andrew Carnegie or John D. Rockefeller Sr., men who may have made fortunes off the backs of low-paid workers but who redefined philanthropy in their day.

Take it from Daniel Ben-Horin, who runs CompuMentor, a successful San Francisco group that sends volunteers into schools and nonprofit organizations to help them use computers. He says his first glimpse of stinginess among the cyber rich came a few years ago, when a brochure about CompuMentor was included in a newsletter for the industry's elite. ""We were thrilled,'' Ben-Horin recalls. ""We thought, "What better way to reach the new jillionaires?' '' In response to the appeal, CompuMentor received a not-so-hefty $560--almost all of it from one person, Mitch Kapor, a cofounder of Lotus Corp. who already had a reputation for giving. Ben-Horin knows well the frozen expression that passes over the faces of potential donors. ""There's a special kind of high-tech glazed look that says, "Go away. It's not my problem','' he says.

Saal, who gives because he feels a moral obligation to do so, isn't completely alone. John Gilmore, who provided some of the initial funds for the Electronic Frontier Foundation, a nonprofit civil-liberties organization, first learned about computers as a teenager growing up in rural Pennsylvania. After picking up a math book in a Carnegie Library in Bradford, Pa., Gilmore worked his way through its tutorial on programming. Nearly two decades later he made a fortune after helping start Sun Microsystems Inc. Funding EFF gives Gilmore a sense that he is giving back to an industry that gave to him. Apple Computer cofounder Steve Wozniak is also known for his generosity. He has donated so much private money to the Children's Discovery Museum in San Jose that the street running alongside it has been named Woz Way.

THE LATTER-DAY MODEL OF GENEROSITY IN THE high-tech arena is the late David Packard, the Hewlett-Packard Co. cofounder. In 1997 the 33-year-old Packard Foundation will grow to $7.2 billion in assets, putting it among the nation's top three grant-making foundations. Packard and his wife, Lucile, imbued their children with a sense of obligation, putting all three on the foundation's board when they turned 21, more than 20 years ago. ""There may be a perception that being philanthropic isn't very interesting, and not much fun,'' says Packard's daughter Susan Packard Orr. ""But you get so much satisfaction knowing you can make a difference. You can get hooked on it.''

Getting the current generation of technology tycoons hooked on giving isn't likely, at least not any time soon. Social responsibility has never been a strong part of the industry's culture, and some scoff at the very notion. Sun Microsystems has a community volunteer program and a corporate foundation. But ask multimillionaire chairman Scott McNealy about his personal philanthropy, and this is his response: ""If you want to redistribute wealth, you liberals, why don't you go out and earn it and give it away. Redistribute your own wealth.'' He prefers not to disclose any details on his private giving: ""The people who need to know, know,'' he says flatly.

The libertarian streak that runs through much of Silicon Valley prevents many techno-millionaires from seeing themselves as their brother's keeper. ""Most people in the valley think folks should fend for themselves,'' says David Bunnell, CEO of Upside Magazine. Perhaps the problem lies in the fact that the computer industry is still in its infancy and it could be years before a culture of noblesse oblige takes root. ""They need to get older, and have their children get older,'' says Peter Hero, executive director of the Community Foundation of Santa Clara County, where most high-tech wealth is concentrated. And the volatility of the computer business breeds insecurity. People worry that their wealth--much of which is on paper--could vanish tomorrow, with the next tumble of the stock market. Moreover, many of the new rich say they're too busy trying to survive the pressure cooker of Silicon Valley to give away money. Who has time for extracurricular activities like philanthropy when there's always some new guy looking over your shoulder, eager to steal your competitive edge?

Apple cofounder Steve Jobs started a foundation briefly in the 1980s but folded it when he thought it was demanding too much of his time. ""The gold-rush mentality here says don't focus on anything but your business,'' says Kirk Hanson, a senior lecturer at Stanford University who studies philanthropic practices. ""If you get distracted, you're missing out on once-in-a-lifetime opportunities. And if you make money today, there will be time in the future to be a good citizen.''

That's what Microsoft chairman Bill Gates says. To be sure, the world's wealthiest private individual has given $70 million in personal gifts (about 0.35 percent of his net worth of $20 billion) to charity over the past decade. He's also earmarked $200 million for a private foundation established to fund charitable projects, and more donations are on the way. Gates has even said he plans to give away most of his wealth, but not until ""much later'' in his life. ""I've decided that over 95 percent of the resources I've been lucky enough to have, which is mainly my ownership of Microsoft, those are going to charitable causes,'' he says.

Some critics argue that society's needs are too great to wait. ""My biggest complaint about the wealthy middle-aged white boys of the computer industry is the world cannot wait until they grow old,'' says Paul Saffo, a director of the Institute for the Future in Menlo Park. ""Bill goes out and collects Nobel Prize laureates. I've no doubt he could find the most creative charitable-giving person in the country to help him give his money away.'' John D. Rockefeller, for instance, began giving away money when he was 16 years old.

The good news is that attitudes may be changing. In 1996 Gates and Steve Ballmer, his lieutenant at Microsoft, gave $25 million to Harvard to fund a new building. Gates also gave $19 million to the University of Washington. Netscape Communications Corp. CEO Jim Barksdale gave $5.4 million to his alma mater, the University of Mississippi. Others are giving more, but doing it quietly.

But charitable giving shouldn't be confined to educational institutions, or such self-referential gestures as funding a school's new science building. ""It's very nice to give money to Harvard and your prep school, but it takes more than that,'' says Peter Dobkin Hall, a research scientist and philanthropy expert at Yale University. Hall says it's important not to just give money away but to do so strategically, as Carnegie did when he endowed public libraries across the country nearly a century ago. Hungarian-born billionaire George Soros, who made his money in the currency and other financial markets, is perhaps the most imaginative philanthro- pist alive--he has given to less obvious causes like immigrants' rights. Says Hall: ""Soros is probably closest to understanding what needs to be done, but he doesn't have the kind of money Bill Gates does.''

This obsession with Gates in philanthropic circles is understandable. If he gave a mere 1 percent of his net worth every year (an informal rule of thumb for charitable giving), his annual commitment would be about $200 million. That's enough to provide full yearly support to the New York Public Library and its 84 branches, serving 12.5 million New Yorkers. And it would amount to little more than a rounding error in his overall portfolio. But why should society expect Gates--or any other nouveau billionaire, for that matter--to give? ""It's the old Dillinger line,'' says Saal. ""Because that's where the money is.''

What's needed at the end of the 20th century, critics say, is a concerted redefinition of charitable giving much as it was redefined at the turn of the century. ""It wasn't that John D. Rockefeller woke up one day and said, "Aw, gee, I made all this money and I can't buy enough private railroad cars and fur coats','' says Yale's Hall. Instead, a handful of wealthy people began to persuade other wealthy people to use their money well, creating a philanthropic climate. Saal and some others in Silicon Valley are doing precisely that; Saal spends much of his time trying to pull other wealthy entrepreneurs into the philanthropic fold. His success so far has been limited, particularly in recruiting the industry's richest. But once the dam breaks, it could break wide open. ""The moment we can get one of the top dogs to start demonstrating that they really care about charity, others will follow,'' says Saffo. ""And if I were Bill Gates, I'd rather be a leader than a follower.''

Giving gifts totaling $27 million in 1996, Bill Gates may feel like Santa, but he isn't in the same league as U.S. history's biggest philanthropist. What some prominent Americans gave and what it's worth today: