This Bay Area Billionaire’s Foundation Is Booming. Here’s What We Know About Crankstart
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This article was originally published on September 21, 2022.
For a lot of billionaires, especially those hailing from or invested in the tech industry, the pandemic brought with it a financial windfall. That surge has led to more than a few new mega-donors crossing our radar, but it’s been hard to tell just how much new money has been making its way to the philanthropic sector thus far.
Newly released IRS filings, however, are starting to shed some light on how much foundation assets swelled during this period, and there’s at least one philanthropy that looks to have grown from a big fish to a whale: the San Francisco-based Crankstart Foundation.
Started just over two decades ago by venture capitalist Michael Moritz and his wife, writer-turned-sculptor Harriet Heyman, the grantmaker’s assets nearly doubled to $4.2 billion in 2020, vaulting it into the company of storied institutions like the Kresge Foundation and the Carnegie Corporation of New York. That year, Crankstart joined the nation’s top 25 grantmakers by assets.
Early investments in pandemic-boosted companies like Twilio and (surprise!) Zoom drove those eye-popping profits, creating an incredibly profitable year for Sequoia Capital, the fund where Moritz works and where most of the foundation’s money sits, according to its filing. “They had all these high-octane stocks,” said John Seitz, founder and CEO of FoundationIQ, who reviewed the IRS documents. “It’s purely a matter of the stock market taking off in 2020.”
Granted, this filing may be freshly public, but it is nearly two years old. The recent collapse of tech stocks has likely erased some of those gains (Crankstart provided a brief statement to IP and declined to provide more recent endowment figures). By one account, Sequoia Capital’s public stock holdings fell 42% between late spring and early summer this year. On the other hand, the firm seems to be prepared for the challenges ahead, which may bode well for the foundation’s endowment in the long haul.
Even without those big investment gains, this foundation has been growing in a hurry. Between 2015 and 2020, the couple put more than $800 million into the endowment, much of it in the form of shares of Alphabet. It was Moritz’s early investment in the company, back when it was still Google, that made the Welsh investor wealthier than the late Queen of England. (Fittingly, he was knighted in 2013.)
Bets like that have left the couple with a roughly $6 billion fortune, according to Forbes. So they could easily grow their foundation further, and that appears to be the plan. As Moritz wrote in the couple’s 2012 Giving Pledge letter, “since our wealth — like all fortunes — rests so heavily on the intelligence, work and contributions of others, it seems only right that we voluntarily give most of it” away.
Which causes benefit when two former journalists become billionaires several times over? The foundation’s website outlines its four main priorities, and how the $250 million-plus in giving it reported last year breaks down: education (40%), democracy (14%), environment and basic science (8%), and a portfolio focused on the Bay Area (38%). Crankstart also lists info on some its larger grant recipients in each program, as well as a partial list of its 2021 grantees.
To flesh out what we know about what Crankstart backs and where its largest gifts are headed, I took a closer look at the foundation’s most recent available IRS filings, coupled with the grantees and program information listed on its website.
They show an organization that has transformed itself in recent years. Crankstart once made nearly all of its major grants to its founders’ alma maters, including regular $10 million-plus awards to Oxford University (Moritz) and the University of Chicago (Heyman), along with occasional million-dollar grants to big arts institutions like the San Francisco Museum of Modern Art. While it still sends big checks to those two colleges, the foundation now also supports a wide range of immigrant-focused nonprofits, Bay Area social service organizations, and environmental groups. Some of its largest commitments show a growing focus on climate and environmental justice, as well as collaborative efforts to bolster democracy through BIPOC-led organizing.
“Most of Crankstart’s grants go to the Bay Area — our home. We try to address the building blocks necessary for a stable life, including housing security, economic opportunities and civil rights. We prefer for the spotlights to shine on the community leaders and organizations who work against steep odds to try and make this happen,” said Crankstart CEO Missy Narula in the foundation’s statement.
Like so many funders in the response to the pandemic, Crankstart’s giving accelerated in 2020. That year also saw the addition of the couple’s children to the board of directors, along with two non-family board members. The foundation nearly doubled its grantmaking that same year, an expansion that particularly favored organizations serving the Bay Area’s hungry and unhoused, largely due to a $60 million round of emergency grants. Here’s the skinny on this fast-growing and faster-evolving grantmaker.
Which groups get the big bucks?
Let’s start with education. For years, nearly all the couple’s largest checks went to the universities they attended. One notable exception: Since 2016, the couple has been a stalwart supporter of charter school network KIPP’s Bay Area chapter, sending the group $2 million or more annually. More recently, the duo started giving similar-sized grants to Year Up, a free job-training program. The foundation also supports re-entry programs at universities across the country, but mostly on a small scale.
In 2021, the couple committed $25 million to San Francisco’s Summer Together initiative, which provides free classes to students in the city’s public schools, and was supported by a wide range of city agencies and corporate partners.
The Bay Area’s social safety net has long been a priority, with an early major partner being the San Francisco-based homelessness group Hamilton Families. Yet the foundation only started to cut huge checks to such groups in the past few years: Million-dollar gifts in 2019 and 2020 went to the Unity Council, an all-purpose service organization, as well as a pair of housing-focused efforts, Keep Oakland Housed and the San Francisco Housing Accelerator Fund. Much of this funding came through a $25 million commitment Crankstart made to the accelerator and its partners.
It’s an area of grantmaking that apparently keeps expanding. The foundation’s 2020 portfolio includes several Bay Area social service agencies receiving million-dollar-plus grants from Crankstart for the first time. And in 2021, the foundation pledged multiyear funding to the 3rd Street Youth Center and Clinic to help shelter homeless youth, though it’s unclear whether such support was at a similar scale. Other 2021 grantees across its various community buckets included Larkin Street Youth Services, Enterprise Community Partners, Center for Employment Opportunities, Center on Budget and Policy Priorities, Code for America, and MegaBlack SF. The foundation did not indicate how much these organizations received.
Environmental causes were an afterthought for the foundation just a few years ago, with only a scattering of minor awards. But starting in 2019, the money started to flow, and the foundation appears to have a growing interest in climate and environmental justice work. Million-dollar grants have gone to Earthjustice, which has received support since 2019. The foundation made a $7.5 million pledge to the Climate and Clean Energy Equity Fund, an intermediary that supports climate justice work in several key states. Crankstart’s also been a major past supporter of the Bolinas Community Land Trust, the famously development-averse North Bay coastal town where the couple has a home.
While we don’t know how much the grants are for, the foundation’s website lists some interesting new 2021 recipients, including California Environmental Justice Alliance and the Greenlining Institute.
Democracy is another current priority that received virtually no significant grants until the foundation ramped up a few years ago. The couple made a one-off $15 million award to the ACLU back in 2018, but their grantmaking really picked up the following year. Since then, Crankstart has thrown substantial support behind collaborative efforts supporting democracy and grassroots power-building, with a focus on BIPOC-led groups. The California Black Freedom Fund received $5 million from the foundation, and the Democracy Frontlines Fund — a collaboration of several major foundations spearheaded by the Libra Foundation — counts Crankstart as one of its 14 backers. (For more information on how these racial justice collaboratives and other similar funding efforts are unfolding, see IP’s recent special report on the topic.) The foundation has also placed a focus on immigrant-serving organizations, like Centro Legal de la Raza and Immigrant Legal Resource Center ($7.5 million).
The couple do not name it as a standalone priority, but the arts are clearly another passion. In one their most public acts as philanthropists, in 2019, they agreed to sponsor the Booker Prize for five years. Heyman, notably, published a novel in 1989. That year, they also gave $3.3 million to the Courtauld Institute of Art, a research institution at the College of London. The foundation has also sent a lot of five- and six-figure checks to Bay Area arts institutions in recent years. Some of their only major gifts in earlier years also went to such organizations, like their $1-million-plus grants in 2013 to SF Jazz, SF MOMA and the Miami-based New World Symphony. Such groups continue to get support under their community grant program.
As in life, these categories also intersect. For instance, Crankstart committed $50 million last year to establish a permanent endowment at The Juilliard School in support of students underrepresented in classical music.
Who calls the shots?
Before 2019, the couple served for many years as the only members of Crankstart’s board of directors. But that year they added their sons, William and Jake, as trustees. Two others, including Judi Powell, now an executive vice president at the Silicon Valley Community Foundation, also came on officers.
The foundation’s current CEO, Missy Narula, is a former entrepreneur and private equity veteran, while other top staff hail from major grantmakers like the Bill and Melinda Gates Foundation and Chan Zuckerberg Initiative. Most junior staffers come from Bay Area institutions like the San Francisco Foundation, East Bay Community Law Center, and the anti-poverty group Tipping Point Community.
Many in the organization also have education experience, often at current or former grantees, including service at national nonprofits like Teach for America and KIPP, newer groups like #YesWeCode Fund and NewSchools Venture Fund, or public education positions.
A growing footprint
For all its size, Crankstart is not the only foundation to benefit from Moritz and Heyman’s billions. But those other philanthropies have much lower profiles, with none of them maintaining websites.
First of all, the couple are trustees of the $95 million UCSF Discovery Fellows Fund, whose past grants have supported Ph.D. programs in the basic sciences at the San Francisco medical center and university. Crankstart has also sent at least one big award to the fund.
Their sons, William and Jake, also have their own outfits. William controls the Loud Hound Foundation, with his father serving in a non-voting role as secretary and treasurer. Just six years old, it, too, has grown in a hurry, nearly tripling in size from the year before to reach $111 million in assets in 2020. Grants have mostly been five- and six-figure gifts to Bay Area and New York-based nonprofits.
Jake’s operation is the $115 million Kelson Foundation, which was established at the same time and is growing at the same trajectory as his brother’s. Like at Loud Hound, Jake is Kelson's only director and he has appointed his dad as secretary and treasurer. A designer and researcher who works for VotingWorks, Jake sends mostly smaller checks to a wider variety of groups, including many cycling and wilderness organizations.
This family is really just getting started as a huge philanthropic force, and even Crankstart still has a fairly limited public profile. As one of the largest philanthropic institutions in the country, it’ll be fascinating to see where it heads next, and it’d be good to see much more shared about where its money is headed.
After all, if most of the foundation’s pandemic gains hold, Crankstart will be obliged to give away a minimum of about $210 million each year. That’s six times what Gavin Newsom, the governor of the family’s home state of California, spent getting elected in 2018. That’s a lot of power.
Correction: An earlier version of this story incorrectly listed Judi Powell as a Crankstart board member. She chaired the foundation's audit committee in 2020. It has also been updated to clarify Michael Moritz’s responsibilities at the Kelson and Loud Hound foundations.