I went to school at a suburb of Chicago where two friends died by being shot by gang members (Latin Kings), a kid that sat in front of me in Spanish murdered his girlfriend and went to prison, and drug deals were common in the hallways. But standing up to bullies was still better than backing down.
That said, the gang members were rarely if ever the bullies; not unless they suspected you were in a rival gang. The bullies were the kids that wanted a power trip, mainly the Seniors and mainly the sports guys.
If you give in you're doomed to be giving up your money or whatever again and again and again. You fight back, and that's usually going to be the end of it. People that fight back aren't fun; the weak ones that cry and give you stuff, that's where the fun is. The bullies want a reward with little effort. The gangs usually have a personal vendetta against you, your family, your different gang, your race, or something else. That's a whole different issue and one that's not dealt with in the same simple way.
Don't confuse gangs and bullies, they're two very different beasts.