Calgary Tech Companies and Philanthropy
Calgary Tech Companies and Philanthropy
Introduction
Alberta’s most populous city is known for many things — skyscrapers and energy companies, rodeos and the Canadian Pacific Railroad. But for the many Albertans interested in tech, the fifth-largest city in Canada is taking on a different hue. Over the past decade, Calgary has been slowly but surely adopting the characteristics of a tech hub. Numerous startups are popping up throughout the downtown core, while tech companies with more longevity are settling in comfortably and beginning to expand.
Whether it’s feeding, fueling, healing, or moving, Calgary is solving the world’s greatest challenges through the creation and adoption of transformative technologies. From software to hardware and services, digital transformation (DX) is quickly becoming the largest driver of new solutions and technology investments among Calgary businesses. Calgary companies will lead the $20 billion spend on digital DX in Alberta from 2021 to 2024. Given its concentration of headquarters and industrial sector base, Calgary is at the heart of the industrial digital transformation and home to many made-in-Calgary success stories.
A New Course for the Future
In the two years since the COVID-19 pandemic forced workers out of Calgary's downtown towers and into home offices, the city's core has changed. Many of the changes are subtle. On Fourth Avenue S.W., the 1980s-era Sun Life Plaza building is now The Ampersand — revamped and modernized by commercial landlord Aspen Properties in an effort to attract startups and companies of the future. In the revitalized East Village area, the massive $80-million parkade opened by the city last spring is home not just to car and bike stalls, but to Platform Calgary, a non-profit organization that will offer incubation space for startups and programming for entrepreneurs. On First Street S.E., 79,000 square feet of space in First Tower is now occupied by local software company Symend, which shot to prominence in 2020 after receiving $73 million in a funding round.
But perhaps the most significant change Calgarians will notice if they return to the office in 2022 is the composition of the downtown workforce itself. For the first time in Calgary's history, a city core that was once almost solely the domain of the energy sector and the various companies that service it is home to a growing contingent of technology workers. According to commercial real estate firm CBRE, Calgary has seen its ranks of technology workers grow by 17.9 per cent between 2015 and 2020 — an increase of 46,700 workers. Calgary also moved up six spots last year to number 28 on CBRE's 2021 Scoring Tech Talent report, which ranks 50 North American markets according to their ability to attract and grow tech talent.
Calgary-based financial technology company Neo Financial, which has swelled to 400 employees since its founding in 2019, is one of those placing its bet on a future in the downtown core. The company plans to formally announce in January that it has leased 60,000 square feet of office space (the exact location is yet to be disclosed).
Neo Financial co-founder Andrew Chau (who also co-founded Winnipeg-based food delivery giant Skip the Dishes), said being downtown makes it easier for talent-hungry tech companies to attract young workers who want to live in an urban environment and have access to transit and amenities. At the same time, Calgary's tech sector wants to play a role in helping to bring life back to downtown and solving the city's economic challenges by creating jobs and filling vacant real estate.
A number of recent significant investments are primed to support budding entrepreneurs and future-thinking problem solvers in Calgary.
The Southern Alberta Institute of Technology (SAIT) received a $30 million donation to help establish a new school that will provide the latest in digital education for students, enabling the institution to advance change through technology. The new school will set a new course for the future positioning of SAIT as a leader in digital transformation and education.
Suncor announced a multi-year strategic alliance with Microsoft Canada, tapping into the full range of Microsoft’s cloud solutions to empower a connected and collaborative workforce, upgrade data centres, and increase analytics capabilities.
Cisco announced a $15 million investment to support three initiatives in Western Canada, focusing on job creation and skills development. Cisco has doubled its R&D cybersecurity resources since 2017 and established a new cybersecurity office. As part of the announcement Cisco is also supporting NPower and YYC Net Lab to provide training and development support to underrepresented populations.
With help from $3.5 million from the Opportunity Calgary Investment Fund, Finger Food Advanced Technology Group opened an Advanced Technology Centre in Calgary in 2020. The Advanced Technology Centre is a facility for global innovation; a state-of-the-art space dedicated to disrupting traditional thinking, fostering user-centric and innovative ideas and learning opportunities. The Centre is set to provide 200 full time jobs in Calgary by 2023 for highly skilled design, software development, and management professionals.
The Opportunity Calgary Investment Fund (OCIF) will boost support for Calgary-based tech startups ready for rapid commercialization through its participation in the Creative Destruction Lab Rockies (CDL-Rockies). CDL-Rockies can receive up to $3 million from OCIF over five years to support its unique program for startups commercializing transformational technologies across industries. CDL-Rockies, which is based at the University of Calgary's Haskayne School of Business, brings together experienced entrepreneurs, investors, and subject matter experts to expedite the growth of early-stage science and tech-focused companies. Over the next five years, CDL-Rockies forecasts it will support 120 ventures through its program, 200 ventures through the Nurture Program, and generate an estimated $157.5 million of capital investment and create 315 jobs in Calgary through the growth of supported ventures.
Province Wide Growth
Alberta is now home to more than 3,000 technology companies, a 233 per cent increase since 2012, according to a new report. The report — conducted by Alberta Enterprise Corp. in partnership with PwC — also shows that Alberta’s tech sector, once made up largely of early-stage startups, is showing signs of maturity. According to the report, almost 40 per cent of tech companies in the province now have annual revenues of more than $1 million, a 66 per cent increase since 2018. Over the past two years, the number of tech companies with 25 or more employees has increased by 12 percentage points to 25 per cent.
According to the report, the majority (58 per cent) of tech firms in the province are in Calgary, with 30 per cent in Edmonton and almost 13 per cent in other regions of the province. In Calgary alone over the past two years, there has been a flurry of high-profile activity in the tech sector — from Benevity Inc. landing a $1.1-billion deal with international investors that vaulted the local company to coveted “unicorn” status, to startup fintech company NeoFinancial’s $50-million funding raise.
Post-Secondary Support
A significant pool of local talent for Calgary’s growing tech companies is available through the University of Calgary, Mount Royal University, SAIT’s School for Advanced Digital Technology, and Bow Valley College. This pipeline of talent from Calgary post-secondary institutions is evident in two of the largest deals in 2020, Symend and Neo Financial. Thirty-seven percent of Symend and 24 percent of Neo Financial employees have graduated or taken courses from Calgary post-secondary institutions. While a significant portion of employees are from Calgary post-secondary institutions, there are currently more than 2,400 technology sector job openings posted on LinkedIn, another indicator of the technology ecosystem's continued growth. Given the tech growth in the region, micro-credential programs like EDGE UP, Lighthouse, and NPower are also helping with the increased demand for tech talent. ViTreo Group Inc., 2021 vitreogroup.ca Page 4 of 12
Ecosystem Partners
In addition to healthtech, fintech, robotics, and cleantech, the Calgary tech ecosystem continues to grow with more than 35 ecosystem support organizations, including coworking spaces, incubators, and accelerator programs. These highly connected ecosystem support organizations help startups in early to middle stages of growth. These support organizations include:
321 Growth Academy
A100
Alberta Innovates
Creative Destruction Lab
District Ventures and IBM Innovation Space
Foresight
Founder Institute
Harvest
Innovate Calgary
Platform Calgary
Rainforest Alberta
Startup Calgary
TELUS Accelerator Technology
The Accelerator
Thin Air Labs
Trade Accelerator Program (Calgary Economic Development)
Tundra Ace Program
Zone Startups
Tech Companies and Philanthropy
Generally speaking, tech isn’t known as the most philanthropic sector. When people hear these huge valuations and what companies are raising, they wonder why it’s not translating to donations. But the tech industry is booming in Canada, and with industry growth comes new injection of philanthropic capital.
Today, much of the world’s wealth belongs to global technology companies and their founders, with technological breakthroughs happening at an exponential pace. The top ten wealthiest people in the world are tech founders, including Jeff Bezos (Amazon), Bill Gates (Microsoft), Mark Zuckerberg (Facebook), and Larry Page (Alphabet/Google). As for Canadians, wealthy tech founders include Garrett Camp (Uber), Tobias Lutke (Shopify), and Peter Szulczewski (Wish).
The need for philanthropy remains ever-present with rising global challenges. At the same time, the collective wealth of the world’s billionaires increases by $2.5 billion every day, and there are 143 tech billionaires in the world. The number of Canadian millionaires is growing fast, too, with the 1.3 million Canadian millionaires in 2018 expected to grow to two million millionaires by 2023. On top of that, the average CEO of a billion-dollar startup in North America is 39 years old, and the average employee working for them is 29.
With these sorts of numbers, it’s not surprising that the tech sector contributes significantly to Canada’s GDP. According to the Government of Canada, the software and computer services sub-sector alone grew by 7.7% in 2018, outpacing the Canadian economy growth of 2.3%.
History shows that with industry growth comes philanthropy — and the next tech era is no different. Philanthropy is experiencing a seismic shift in wealth due to the growing influence of a new generation of tech founders and CEOs. This shift started at the turn of the millennium, during a period associated with the rise of Silicon Valley, high-tech clusters, and the infamous dot-com crash which began on April 17, 2000.
So how exactly is tech philanthropy different to traditional philanthropy? Some of key markers include the tech sector’s heavy emphasis on a global outlook and data-driven decisions — as well as providing huge donations with the ambition to transform entire fields.
There are several Canadian companies who are putting their energy into addressing global challenges, and who count data and intellectual capital as part of their philanthropic giving. The new WealthSimple Foundation aims to support children in reaching their full potential by addressing the education gap by providing access to education savings grants and investments.
Another example of this is Shopify’s new Sustainability Fund, which sees the e-commerce platform committing a minimum of $5 million annually to address climate change through carbon sequestration and carbon-neutral operations. Shopify recently went public and WealthSimple is named as one of the hottest companies to consider an initial public offering (IPO) along with companies such as Wattpad, Vidyard, and Hootsuite.
Canadian tech companies are positioning themselves to tackle climate change, education, and other challenges. Meanwhile, corporations who have been around since the 90s have also incorporated new social impact practices. Salesforce adopted a ‘1/1/1 Model’ of charitable giving: donating 1% of employee time, product resources, and profits to charitable causes. In the 16 years they have been using this model, Salesforce has donated $96 million.
Will the tech bubble burst again as it did in the early 2000s? The signs are pointing to ‘no’ — tech companies are projected to keep growing exponentially over the next 20 years, and according to one study, will be four percent of the world GDP by 2026, and 8 percent by 2038. There’s no denying it: technology-influenced social impact is part of a new wave.
The Future of Tech Philanthropy
Tech companies are not built the same way that traditional companies are built. They generally take a long time to get to profitability because they’re focused on scale. In addition, giving is not what it used to be. Demographics, figures, motivations, and means of giving all have changed drastically. How we respond to these shifts and how we engage the next generation of donors matters for the future of our communities and causes.
It is still a truism that the majority of philanthropists are older, white males. But we need to ask, who else is out there? We need new tools to embrace and engage a new generation of donors.
Generations X and Y are not content with being told how or what to do. As philanthropists, they want to lead with — not be led by — non-profits. One possibility that the Toronto Foundation has embraced is a program designed to teach new philanthropists, many of whom are below age 35, about the opportunities and challenges in their communities and responsible grant-making. A program that connects them to the neighbourhood champions leading the way to positive change. A program that provides the structure, tools, and research for young people with smaller foundations to give as thoughtfully as those with larger amounts of capital, allowing them to focus on building a better city, not just giving charitably when solicited.
The Silicon Valley Experience
Silicon Valley has been globally recognized as a hub of technological innovation since the 1970s. Between the mid-1990s and 2001, Silicon Valley, alongside several high-tech industries, went through rapid growth before a sudden economic downturn. However, by 2008, Silicon Valley’s high-tech companies had generated $57.7 billion in wages — nearly 14% higher than the total wages earned in those same industries in 2001.
With this sort of boom came the injection of philanthropic capital; in 2017, the 50 largest individual donors in the U.S. gave away a combined $15 billion, and 60% of those came from tech giants.
One example is Canadian Jeff Skoll, the first president of eBay, who later founded the Skoll Foundation. The foundation aims to drive large-scale change by investing in, connecting, and celebrating social entrepreneurs solving the world’s most critical issues, from education to human rights to the environment. In total, the foundation gives out $40 million in grants every year.
Clearly, technology is driving a new era in philanthropy. At the same time, we are seeing a shift in how we think about the purpose of capital; in August 2019, 181 CEOs in the United States signed the Business Roundtable’s landmark statement redefining the purpose of a corporation to ‘meet the needs of all stakeholders’.
Business and technology expert Don Tapscott calls this whole period of change the ‘New Economy’, with the ‘Internet at its heart’. Klaus Schwab, founder of the World Economic Forum, described the borderless promise of the Fourth Industrial Revolution as: “The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things [etc.].”
Silicon Valley and Support for the Arts: A Case Study
Source: “The Truism that the Silicon Valley Doesn’t Support the Arts Might Not be True Anymore”.
The San Francisco Gay Men’s Chorus became a beneficiary of software company Zendesk after an out-of-the-blue $10,000 donation via text message. Salesforce sponsored American Conservatory Theater’s forthcoming production of “Freestyle Love Supreme” after one of the theater’s board members happened to see CEO Marc Benioff tweet about liking the show. And Amazon made a $50,000 donation to Theatre Bay Area after the small non-profit’s new programs officer, Melissa Hillman, started Googling “corporate giving” along with various tech companies’ names.
For many big tech companies, these kinds of gifts are equivalent to rounding errors; Amazon, for instance, reported $386 billion in revenue in 2020. Still, these episodes of philanthropy call into question a long-standing truism in the Bay Area arts world: that Silicon Valley doesn’t support theater, opera, museums, or symphonies — at least not to the same degree as previous generations of benefactors did.
Conventional explanations for tech’s philanthropic reticence include the Bay Area’s high cost of living and tech workers’ scant leisure time to get involved with the arts. A 2016 report from the Silicon Valley philanthropy consulting firm Open/Impact notes that much of tech charity goes to national and international organizations because tech workers are a multinational population and their companies see their customer base as global. Arts organizations, by contrast, are usually local by definition. What’s more, the thinking goes, arts and tech just don’t speak the same language. Arts presenters look like stodgy institutions, while techies prefer the ground floor and disruption. The impact of the arts isn’t easily quantifiable, while tech philanthropists often like to see the granular metrics of success for each dollar they give.
“It’s a sector that thrives on efficiency and speed, and it exists to solve problems,” Carey Perloff said of tech in 2017, when she was still artistic director at San Francisco theater company ACT. “And the reason theater is so hard for them to wrap their head around is, we are the problem. We’re not going to be solved.” Yet recent charitable giving from Zendesk, Salesforce, Amazon and many other businesses suggests it might be time to rethink some of that prevailing wisdom about tech’s support of the arts.
Comprehensive data on tech gifts to the arts is hard to come by; many donors seek privacy. A 2018 report from Grantmakers in the Arts shows declining corporate support for the arts since 2000 but does not break out tech companies’ giving from corporations overall.
Open/Impact’s report notes that individual giving from Silicon Valley to all causes increased from $1.9 billion to $4.8 billion from 2008 to 2013, even if arts-specific giving didn’t grow significantly. It said that “more companies are now focusing on a few designated issue areas or programs aligned with their core business objectives, such as STEM (Science, Technology, Engineering and Math).” Using 2015 data, it reported that Silicon Valley non-profits dedicated to “arts, culture and humanities” got a minuscule fraction of overall revenue among the region’s non-profits.
Still, some recent major gifts appear to be changing that picture:
In June, MacKenzie Scott, novelist and ex-wife of Amazon’s Jeff Bezos, announced a $2.8 billion gift, much of which went to arts organizations. Many of those were in the Bay Area, including Alonzo King Lines Ballet, Yerba Buena Center for the Arts, the East Bay Fund for Artists and Women’s Audio Mission.
Since 2020, Amazon has supported not just Theatre Bay Area, but the Haight Street Art Center, Merola Opera Program, and others.
#StartSmall, a philanthropic initiative of Square CEO (and former Twitter CEO) Jack Dorsey, was founded in 2020 with the stated priorities of pandemic relief, girls’ health and education, and universal basic income. Yet many local arts companies have received its aid, including the Asian Pacific Islander Cultural Center and the Community Arts Stabilization Trust.
The new Institute of Contemporary Art San Francisco is a museum whose founding has drawn substantial support from the tech community, including from venture capitalist Sandy Miller, investors Wayee Chu and Ethan Beard, Slack co-founder Cal Henderson, Rsquared Communication CEO Rebecca Reeve Henderson, and Instagram co-founder Mike Krieger.
Salesforce isn’t even the only tech company that’s offered major support to the theater in recent years. While ACT board member Jascha Kaykas-Wolff worked as Mozilla’s chief marketing officer, the software giant sponsored ACT’s New Strands Festival of new plays; its master of fine arts program production of “Clickshare” as well as a companion visual art exhibit; and Happy Hour Drafts, whereby ACT students presented in-process plays at Mozilla offices in an informal happy hour setting. (Mozilla is no longer a corporate sponsor, and ACT announced Monday, Dec. 20, that it is closing its MFA program.)
Yet not everyone is ready to call all these gifts a harbinger of change. “I would say that it’s too early to say it’s a trend,” said Alexandra Urbanowski, the director of strategic initiatives and associate director at SV Creates, Santa Clara County’s arts council. But she noted, among other promising signs, that Silicon Valley Community Foundation — the largest community foundation in the country — started allowing arts organizations to apply for funding for the first time in 2021.
Cynics, meanwhile, might write off any new charitable giving to the arts as PR play or tax strategy. But another factor might be the natural maturing of the sector’s wealthiest. “Tech money is a relatively new form of wealth in our country,” said Alison Gass, director of the Institute of Contemporary Art’s San Francisco museum. “It takes a little while from the time you have that great fortune to figure out how to spend it meaningfully.”
Another possible factor is current events. Chris Verdugo, executive director of the San Francisco Gay Men’s Chorus, said he believes the 2016 presidential election helped spark the company’s first gift from Zendesk. Sally Kay, Amazon’s senior manager of external affairs in Northern California, tied her company’s recent arts giving to a new organization-wide leadership principle instituted in July: “Success and scale bring broad responsibility. That, coupled with the very clear needs that were brought to light by the pandemic, really gave us the go-ahead to engage in more cities all over the U.S.,” she said.
At Theatre Bay Area, Amazon is supporting an arts leadership residency that fosters early career theater leaders who come from historically marginalized backgrounds. Kay said combating inequity has long been an Amazon philanthropic interest, but previous efforts were more focused on headquarter cities.
Still another possible factor: Arts fundraisers are improving their pitches. At the Institute of Contemporary Art, Gass said she believes that her being about the same age as many tech donors helps. “There’s a shared generational experience,” she said. “A lot of these donors and I have kids roughly the same age.”
Rusty Rueff was the ACT board member who saw Benioff tweet about seeing “Freestyle Love Supreme.” The two already had a connection from being on another board. Still, Rueff said, “I almost felt bad about going to him, because so many people go to him. Who knows how many requests he gets a day?” As part of its pitch, ACT got Anthony Veneziale, one of the creators of “Freestyle Love Supreme,” to record a personalized rap video for Benioff.
Rueff emphasized that his story is not a blueprint for how to reach the Salesforce leader, but some of his tactics can apply more broadly. He knew Benioff’s charitable interests generally lay elsewhere, so he phrased his pitch as “not only a gift to the city coming out of COVID and making us feel good, but also the need to take down the barriers for people to go back into the theater.” The show, scheduled to open in late January, will be ACT’s first in-person production since the pandemic began.
“You wouldn’t go to someone like Marc or anybody who’s in the innovation economy and say, ‘Hey, would you support our version of ‘Oklahoma!’?’ — unless it was really innovative, on the cutting edge and just screamed of creativity,” Rueff continued. Never ask, “Will you support something that’s kind of the way we used to do it before?” he added. And with extremely high-net-worth individuals: “Don’t go ask them to do something that somebody else could actually do.”
When Kaykas-Wolff worked for Mozilla, from 2015 to 2020, he found he could get his company to support the theater by highlighting how Mozilla benefited from seeing ACT at work. New play development, he said, is a lot like software engineering. They’re both iterative and modular, requiring constant testing as new versions of new pieces get added. They’re both always asking, “Does this module that creates this part of the user experience work well in concert with this other module?” he said.
“Being able to bring MFA students and a playwright who’s talking about the objective that they have … telling the people who happen to be in our office, ‘This is what we’re testing today, and we want to get your feedback in real time’ — that to me was an inspiration for our engineering and product teams.”
Indeed, tech and the arts might always have had more in common than conventional wisdom would have it. “Many successful tech entrepreneurs went to art school and continue to practice as musicians, dancers, calligraphers, photographers, and world-builders,” said Caroline Woolard, author of the 2021 report “Solidarity Not Charity: Arts & Culture Grantmaking in the Solidarity Economy.” Woolard, an assistant professor at Pratt Institute and the director of research and programs at Open Collective Foundation, added: “Today, there is less of a divide between entrepreneurship, design, technology and the arts and culture sector.”
Conclusion
Until about a decade ago, giving was largely a regular activity through few intermediary channels, including faith-based and workplace campaigns. But now, due to demographic shifts, changing nature of work, social media, crowd technologies, data rights, and recasting of trust and relevancy, new alternatives have emerged. Workplace giving models such as Benevity, practices such as Mastercard’s data philanthropy, data trusts such as #GivingTuesday Data Collaborative, and decentralized Blockchain applications such as Alice are not only reimagining the act of giving, but also its purpose and sense of accountability.
Unless the regularity, purpose, and stability of work magically revert back to how it used to be a generation ago, giving in Canada will need to be reimagined from the ground up. The time is now for a different type of giving conversation — and not just because of the changing nature of work. The nature of purpose is changing. Current engagement and business models in fundraising will continue to be challenged in their relevance, transparency, power-sharing, and accountability. It is becoming clearer that financial capital alone cannot solve our deepest community problems. Multi-capital frameworks, like the Thread Fund and Heron Foundation that are at the fringes today, will increasingly demonstrate that data capital, social capital, human capital, and financial capital are equally important in determining overall fundraising success.
Modern philanthropy is grounded in the confluence of technological advancement, the rise of the billionaire philanthropist, and the limitations of public sector funding. As well as this, technological connectivity is reshaping the way that social and environmental issues are being addressed and the ways that philanthropy is expressed.
Calgary is an opportunity rich city. It is home to innovators, dreamers, and problem solvers whose signature entrepreneurial spirit allow them to see opportunity where others may not. These visionaries are turning heads across all sectors every day. They embody the vision for the city and are helping put Calgary and its innovative ecosystem on the global map as a place where people come to solve some of the world’s greatest challenges. And one of those challenges is how they choose to impact the communities where they operate through their philanthropy.
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