Democrats haven’t lost the House yet, but San Francisco is already positioning for the likelihood that the city’s 81-year-old congresswoman, Nancy Pelosi, won’t finish her term if she’s forced to give up the Speaker’s gavel next year. Pelosi made some “news” last month when she announced that she is indeed running for reelection—duh—but the smart money says Republicans are very likely to take the majority, and the expectation is that Pelosi would then ultimately step down after getting her caucus organized for a new session of Congress.
Both the progs and the mods, in San Francisco parlance, have been jockeying for this moment forever. If Pelosi steps down early next year, her replacement could very well be decided in a special election that spring, and so it behooves aspirants to begin cultivating support ahead of a possible snap race. And trust me, they already have been. In a city crawling with stifled ambition, the race is likely to be hella savage.
Most of the chatter in political circles has centered on Christine Pelosi, the Democratic National Committeewoman and the daughter of the woman who has represented the city for the last 30 years. Christine, a lawyer, has a lengthy political resume of her own, but her greatest asset is certainly her last name and her mother, a feared political force who would be expected to help whip the local donors and endorsements that Christine needs. The Pelosi family name I.D. alone is enough to make her the perceived frontrunner among Democratic insiders I talk to, even those that don’t love her. Still, orchestrating a hand-off like that, with all of the accusations of nepotism it would trigger, is easier said than done: “Pelosi is a legend and a political goddess,” said one Democratic insider paying close attention to the race-in-progress. “But I don’t think her power extends to king- or queen-making in her own [congressional district].” When I reached out to ask if she was interested in the seat, Christine offered the usual Pelosi team line that Nancy isn’t going anywhere early next year. “I have zero indication of that and would question the judgment of anyone who does,” she told me. “She has declared for the job and intends to perform it.”
Christine Pelosi would not necessarily be the only frontrunner, for what it’s worth. Well positioned to consolidate the moderate faction is Scott Wiener, the gay, six-foot-seven housing advocate who already reps San Francisco as a State Senator. (A Wiener spokesperson didn’t return a query.) But the race is going to draw a crowd, especially if it’s a special election, wherein you don’t have to give up your existing seat to run. Other notable names for the John’s Grill crowd includes lefty perma-candidate Jane Kim; Supervisor Matt Haney, if he loses his bid for the State Assembly; and former Democratic county chair Dave Campos, if he loses his race against Haney. Another name people like to float as a potential Pelosi successor is San Francisco Mayor London Breed, although I don’t buy that.
One of the most important requirements, of course, is money, and who can raise it. Wiener is particularly credible in this regard because of his warm relationships with YIMBY tech figures like Patrick Collison or Nat Friedman, who could easily drop some six-figure checks into a super PAC or two. The younger Pelosi would likely lean on her family war chest and fundraising powerhouse of a mom, who is friendly with everyone from Ron Conway to Laurene Powell Jobs. Might one of these wealthy tech figures cut out the middleman and just run themself? Count me as a skeptic: It is telling that no major business leaders made a play for outgoing Rep. Jackie Speier’s open seat in Silicon Valley—or against Gavin Newsom last year when there was, similarly, nothing to lose.
Mark Zuckerberg Loses Peter Thiel
Shortly after 4 p.m. Eastern yesterday, the embargo broke on the news that Peter Thiel would finally—finally!—step down from the board of directors at Meta (or, as it’s known by normal people, Facebook) after 16 years. What was most surprising is how long this took. Thiel, despite being one of the earliest investors in Facebook and a longtime friend and mentor to Mark Zuckerberg, clearly has issues with Big Tech censorship, and he has been a source of controversy with employees since he endorsed Donald Trump at the 2016 Republican National Convention.
Most of the stories about his departure included dutiful reportage (via a “person familiar with the matter”) that Thiel wanted to focus more of his energy on politics and didn’t want to be a “distraction” for Zuckerberg. But that’s only half the story. Thiel was a longtime heat shield against accusations of conservative bias at Facebook, serving as an emissary to the far-right and to Trump. He was also personally close with Zuckerberg, who issued a gushing statement thanking Thiel for “teaching me so many lessons about business, economics and the world.” From Zuckerberg’s point of view, I’m guessing Thiel remained more of an “asset” than a “distraction.”
So my read is that this is worse for Zuckerberg than it is for P.T. Thiel, after all, was “focusing on politics” quite well before—now he can just be more brazen about it. No longer will he have to avoid signing anti-Zuckerberg op-eds, like the one in the New York Post last fall that was authored by the two populist-conservative Senate candidates he is backing, J.D. Vance and Blake Masters. Vance and Masters may still face tough questions from reporters and critics about their patron’s Facebook fortune, but at least now there’s an arm’s-length between them and Big Tech. (Although, c’mon, board seat or no board seat, the $10 million that each of their super PACs received from Thiel are still financed by his Facebook fortune and other tech investments.) I’d bet the super PACs behind both candidates will, combined, receive tens of millions more from Thiel before Republican primary voters decide their fate later this year.
Melinda Goes Rogue, or Not
Speaking of my dissents from the media narrative, is Melinda French Gates really going rogue? Some insiders are buzzing about a recent Journal piece that Gates is no longer, technically, specifically pledging to give away the bulk of her wealth to the family foundation she co-founded with her ex-husband, Bill Gates. The drama came to the fore with an unusual correction I flagged to you all last week, wherein the Gates Foundation had to come out and tweak an earlier edition of a much-scrutinized press release announcing the new members of their board of trustees. Gone was a throwaway line about the “pledges by Gates, French Gates and [Warren] Buffett to devote the bulk of their remaining resources to the foundation”; in its place was vaguer language about “expectations of future pledges.” It was a curious edit on a high-profile, highly-sensitive news announcement, and, of course, it attracted some gossiping.
These are high stakes for the world’s most important philanthropy, no doubt. But to some extent, it struck me as old news. Of course some of Melinda’s money will go to her own causes, now that the divorce is finalized. We’ve known since Melinda updated her Giving Pledge letter last fall that Pivotal Ventures, her organization focused on the empowerment of women, is one of the philanthropic priorities she will continue to support. And I’d argue it’s been a rather obvious conclusion that one that could have reached even earlier, when Seattle’s favorite couple divorced in May of 2021. So until we know whether she leaves the board of the Gates Foundation next year, I think people are over-reading the headlines.
Silicon Valley’s Favorite Charity Tax Shelter
Last summer, I wrote about the ascendant effort in Washington to regulate donor-advised funds, the wildly popular, heavily tax-advantaged charitable accounts of the upper-middle class and outrageously wealthy. The advocacy effort is the brainchild of unlikely bedfellows: an ivory tower academic who has made reforming this niche vehicle her life’s calling, Ray Madoff; and former hedge fund manager John Arnold, a billionaire who wants to reform D.A.F.s despite using them himself. The two helped draft a bipartisan Senate bill last summer co-sponsored by Angus King and Chuck Grassley.
Well, now that Senate bill has a House companion—something that was by no means guaranteed, and which suggests real momentum behind the initiative. For the tech community: Ro Khanna, the congressman repping much of Silicon Valley, is one of its first co-sponsors; the Silicon Valley Community Foundation, which houses many D.A.Fs (and which I recently wrote about), opposes it. I still don’t know whether this will pass, but the House bill is a reminder that over the long term, it’s clear that the D.A.F. industry is on the back foot. Some reforms will pass, eventually.
All that was on my mind when I received a note in my inbox last week from Adam Nash, a Silicon Valley vet who I’ve known for a while. Nash comes from the world of fintech—one of his recent gigs was as the C.E.O. of Wealthfront—and is now trying to bring his product design expertise to the world of D.A.F.s at his new company, Daffy, which today said it raised $17 million. In some ways, Nash and the motley crew in Washington are tackling the same problem: how to unlock more charitable giving. So I asked him what he thought of the current D.A.F. push in Congress.
Nash said he agreed with the reform bills, but worries that legislation alone wouldn’t change the business model that delivers big paydays to D.A.F. sponsors like Fidelity and Schwab, which are Daffy competitors. “The current business model of the industry, which is based on charging a fee based on a percentage of assets, is flawed,” Nash argued to me. “Every time a donation is made to a charity, their revenue goes down.” The current bills ask D.A.F.s to disburse 5 percent of their assets under management each year, whereas Nash thinks it should be higher—he is targeting 10 percent for Daffy clients. Nash’s company essentially sees innovation, not legislation alone, as the superior solution.
“I’ve Never Seen Anything Like This”
Lastly, another email arrived over the weekend that I thought would be worth sharing, especially this month. The note came from Steve Phillips, a donor-advisor in San Francisco who I’ve known for a bit as a clairvoyantly early backer of Stacey Abrams, a close ally of Cory Booker since their years at Stanford, and the son-in-law of the late Herb Sandler, a giant in Democratic donor world. Phillips, who is Black, has spent the last few decades trying to push the political and philanthropic worlds—be it the Democracy Alliance or local Bay Area foundations—to stop being so… white.
Phillips is, if you haven’t paid attention, correct. Even in the world of progressive philanthropy, where white billionaires wax poetic about the problems of racial inequality, you’d be hard-pressed to find a Black donor-adviser or foundation head. Well, maybe that’s slowly beginning to change. Phillips pointed me to three significant recent hires of women of color in the Bay Area: There’s Katherine Wheatle at the Packard Foundation, with a $70 million racial-justice budget; Rosa Maria Castañeda at the Hewlett Foundation, who has $150 million at her disposal; and one person I’ll be watching particularly closely, Lateefah Simon, who last month was named the head of the Meadow Fund, the now staffed-up D.A.F. of Patty Quillin, the wife of Netflix co-C.E.O. Reed Hastings.
Those moves suggest actual, real change after the racial justice protests of 2020. “Usually in philanthropy … when people of color are brought on board, it’s as window dressing with little power and authority. It looks like these are hires with real budgets and/or real decision-making authority,” Phillips told me. “I’ve been in this donor and philanthropic game for a minute, and I can safely say I’ve never seen anything like this.”