Silicon Valley Community Foundation Hires 2nd Law Firm to Investigate ‘Toxic’ Workplace

UPDATE: April 26, 2018 >>> SVCF President Emmett Carson has been placed on leave, but will continue to receive his $892,689 yearly salary. Founding board member Greg Avis, a managing partner at Bangtail Partners investment firm, will take his place in the interim, leading the biggest community foundation in the U.S.

“The board of directors voted to place Emmett D. Carson on paid administrative leave from his role as CEO, president and board member until further notice while the investigation being led by independent counsel continues,” board officials noted in a statement posted on the foundation's website late this morning. “That investigation will be thorough, and the board remains committed to taking all necessary actions once it has concluded to ensure that the Silicon Valley Community Foundation thrives today and for many years into the future.”

Marc Gunther, who broke the story for the Chronicle of Philanthropy last week, called the move an example of a nonprofit board fulfilling its duty of oversight. 

“As I’ve written before, foundations are the least accountable institutions of American society,” he wrote in a blog post this afternoon. “I hope the events at the SVCF  will encourage others to take a close look at what foundations do and how they do it. They are too important to be left alone.”

An investigation into sexual harassment by one executive at the Silicon Valley Community Foundation has expanded to address what the nonprofit called “a larger culture issue.” The donor-advised fund juggernaut on Tuesday said that it hired a second prominent law firm to probe claims of a toxic work environment that surfaced in a scathing exposé published last week in the Chronicle of Philanthropy.

The announcement from the foundation’s board of directors came after its founding president, Emmett Carson, publicly acknowledged a sexual harassment investigation of his second-in-command, Mari Ellen Loijens, who stepped down last week amid backlash from donors. Observers say the review by Boies, Schiller & Flexner may spell the end for Carson, who’s being blamed for overlooking and enabling Loijens’ alleged harassment because she was a star fundraiser.

Carson, who initially denied knowledge of sexual harassment claims against Loijens, took to Twitter in the wake of the Chronicle investigation to say that the foundation investigates all claims of misconduct. A former employee immediately called him out, suggesting he was feigning ignorance.

Mari Ellen Loijens resigned last week. (Photo via Silicon Valley Community Foundation)

On Wednesday, Marc Gunther, who broke the story about Loijens, tweeted out a letter purportedly signed by 65 current staffers who say the foundation’s leadership team knew full well about the bullying and chose to do nothing about it.

“And, through their inaction, senior leadership and HR has (sic) created and reinforced a toxic culture of fear, blame and intimidation,” the anonymously penned letter reads.

The letter’s anonymous authors accuse executives of wildly misconstruing an employee satisfaction survey, by making it seem like a response about a fire safety indicated that people felt safe from harassment at work.

“The statistic they've shared—94 percent of staff feel safe in the workplace —was the result of a question about physical safety, namely fire sprinklers and emergency exits,” they wrote. “We do not feel safe at work. Please allow us to share another statistic from this survey ­only 33 percent of staff feel that they can express honest opinions without fear of negative consequences.”

The letter also asked the board to place Carson on immediate leave and to extend the review to include the foundation’s Vice President of Talent, Recruitment and Culture Daiva Natochy and Chief Financial Officer Paul Velaski.

The two third-party law firms hired to review the allegations will scrutinize Carson and his leadership team’s role in perpetuating the culture of bullying and harassment, foundation officials indicated.

“While [the] investigation was first launched following allegations of sexual harassment by one individual, it has since become clear that we may have a larger culture issue that needs to be addressed,” board chair Samuel Johnson Jr. wrote in Tuesday’s statement. “This includes evaluating how teams are managed, what type of working environment is being fostered and confirming that we are the type of organization where reports of misconduct are met with swift and just action. To that end, we remain committed to taking whatever actions will be required based on that investigation’s findings.”

In the Chronicle of Philanthropy’s initial report published on April 18, the reporter describes how actress Rose McGowan—who became a leading voice in the #MeToo movement last year after saying she’d been raped by Hollywood mogul Harvey Weinstein—changed her mind about starting a fund with the $13.5 billion foundation upon seeing the abysmal online reviews left by ex- employees.

The 140-employee community foundation admits that it grapples with high turnover—73 percent of its staffers have left since the start of 2016. But it called that rate typical of the nonprofit sector.

Despite the turnover, Loijens and Carson presided over a period of enormous growth, with the organization’s assets soaring from $8 billion to $13.5 billion in the past five years as it tapped into Silicon Valley’s unrivaled wealth. Even Loijen’s critics acknowledged her fundraising prowess, but said she made life miserable for those around her, berating some, making sexually inappropriate comments to others and even attempting to kiss a female subordinate.

As details of the organization’s culture and ethics come to light, so has criticism of its mission. The foundation awarded $1.3 billion to nonprofits in 2017, according to IRS filings, and granted $5.6 billion since it launched more than a decade ago.

But many of those contributions from some of the biggest names in Silicon Valley went to donor-advised funds at financial institutions, which the community foundation can legally call charitable even though the money didn’t serve any charitable cause.

Here's the letter reportedly signed by 65 former staffers.

To: SVCF Board of Directors
From: SVCFStaff
Cc: Thompson Hine; Boies Schiller Flexner

The SVCF senior leadership team has an average tenure of 9 years and 8 months. They have worked with Mari Ellen Loijens throughout their employment and, without a doubt, they knew about her behavior. And, through their inaction, senior leadership and HR has created and reinforced a toxic culture of fear, blame and intimidation.

Our employee survey results have been terribly misconstrued by SVCF's HR department and spokesperson. The statistic they've shared ­ 94% of staff feel safe in the workplace ­ was the result of a question about physical safety, namely fire sprinklers and emergency exits. We do not feel safe at work. Please allow us to share another statistic from this survey ­ only 33% of staff feel that they can express honest opinions without fear of negative consequences.

For this reason, we have chosen to sign this statement anonymously – we all fear retaliation for this simple act. And, as nonprofit employees, we won’t have the means to “just walk away” if we’re faced with the retaliatory behavior and intimidation we have come to expect.

So today, we come to you, our Board of Directors, with a united voice so that there can be no doubts about staff sentiment. To truly change our culture and restore integrity to this organization, you must remove those individuals responsible for this toxicity at SVCF. We request the following:

● Emmett Carson and Daiva Natochy be put on immediate leave, pending the results of the legal investigation

● The SVCF Board of Directors immediately expands the scope of our current legal investigation to include Emmett Carson, Daiva Natochy and Paul Velaski.

We firmly believe that their continued presence on the leadership team will only worsen the culture we need to rebuild.

We are grateful for your volunteer service and commitment to lead our organization and serve this community. We believe that our senior leadership has not represented your vision or values and have not fairly communicated with you about the realities of our workplace. We hope that you are shocked to learn about them and motivated to change our working conditions.

We also must honor the courage of our former colleagues who have bravely come forward after enduring months and years of harassment. Because of them, we now have this opportunity to speak up and be heard ­ we are immeasurably grateful.

And below is the statement the foundation sent to donors earlier this week. 

Dear Donors,

Thanks to many of you for your outreach to us. We appreciate your concern for SVCF, in particular for the staff.  We value your input and are grateful for your partnership. In an effort to keep you updated on the action being taken by the Board of Directors following the events last week, the Board would like to share the progress being made to fulfill commitments we’ve made to you and our community.

The Board of Directors has been in constant communication. Our focus has been to determine how we can best move forward to address any potential issues in our workplace, to ensure a positive work culture, and to decide how the Board can best catalyze that process while continuing to make a positive impact in communities. We believe that addressing these issues is consistent with the strong reputation that SVCF has built over the years in support of the communities we serve, including you, our donors.

First, the Board has appointed a Special Committee of the Board to lead these efforts, working closely with the Chair of our Board, Sam Johnson, and our incoming Chair Dan’l Lewin. This committee includes Julie Kwon, Wade Loo, Kate Mitchell, Thurman White and Rebecca Guerra who will work with the SVCF team and our outside experts as we move forward.

Second, the Board has retained an additional third-party law firm, Boies Schiller Flexner, with partners Ann O’Leary and Robyn Crowther leading the work, to report directly to the Board and provide further strategic guidance for our organization in investigating and addressing the claims that have come to light over the past week. They have expertise in providing strategic counseling and conducting deep investigations and we’re grateful for their added counsel and support during this difficult time.

Third, with the team from Boies Schiller Flexner, we are expanding the reach of the investigation currently being undertaken by Thompson Hine. While that investigation was first launched following allegations of sexual harassment by one individual, it has since become clear that we may have a larger culture issue that needs to be addressed. This includes evaluating how teams are managed, what type of working environment is being fostered and confirming that we are the type of organization where reports of misconduct are met with swift and just action. To that end, we remain committed to taking whatever actions will be required based on that investigation’s findings. It’s important to the members of the Board, as we know it is to all of you, that SVCF is a place where people are proud to work, and where people feel heard, valued and look forward to coming in each day.

We have affirmed to our employees that we value their commitment to SVCF’s mission, and we pledge to pursue a full investigation and take all appropriate resulting steps. Please be reassured that our 120+ SVCF employees continue their oversight of assets you have entrusted to SVCF and pursuing our collective aim to improve the lives of those in our community. We recognize our responsibility to the entire community and thank you for your patience as we endeavor to complete our investigation in the most prudent and timely manner possible.

An update from the Board is also posted on the SVCF blog, where we will continue to share updates publicly as the situation progresses. Please know that we are committed to communicating to our donor community as quickly as possible when decisions are made on this matter.

We are honored to be part of your philanthropic journey. Your trust in our institution is top priority to us. You are important partners. It is our job as Board members to ensure SVCF is a safe and inclusive place for our employees.

If you have any concerns about this issue, please reach out to me at [email protected]. If you have received any external inquiries from the media or other stakeholders, please forward those to me at [email protected] and to Misti Sangani, our chief donor engagement and services officer, at [email protected].

Thank you, as always, for your continued support of Silicon Valley Community Foundation.  We are working hard to retain your confidence in our stewardship of your assets and the fulfillment of our your philanthropic goals.

Appreciatively,

Samuel Johnson Jr, Chair
SVCF Board of Directors

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

2 Comments

  1. Paid administrative leave is nothing more than a paid vacation. Such a deal.

  2. > but will continue to receive his $892,689 yearly salary.

    ARE YOU EFFING KIDDING ME!!!!!

    It’s a FOUNDATION!!!!

    Can’t they found some big-hearted do-gooder to run the stupid foundation for $25,000 per year!

    That would leave another $867,689 for doing good. That’s a hell of a lot of bake sales and used clothing donations.

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