Google's For Profit Foundation
Continuing our discussion of tax exemptions...
On 9/14/06 the New York Times posted this article about Google.org, which is Google's for profit philanthropy. To quote the article, its for profit structure allows "it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes."
Only time can tell whether this type of philanthropy can actually last, but it seems that they are off to a good start. Instead of throwing tax-deductable dollars at organizations working on the global warming issue (one of Google.org's mandates), the for profit philanthropy is using it funds to "develop an ultra-fuel-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline." A traditional nonprofit organization would never be able to invest the capital needed in such a venture. And although traditional nonprofits may have contributed much to the reseaerch needed to build our collective understanding of global warming and its causes and effects, these organizations are limited in their ability to catalyze change. For profit organizations are also limited in their ability to find a solution because the must be conscious of the bottom line. Google.org has neither of these limitations; rather it is able to invest as much money as necessary and does not depend on financial success, but it can profit from any financial returns. Not to mention, if it succeeds, a portion of those returns go back to the government.
In response to one of Paul's earlier comments, there is no impetus here to desert the mission in the interest of money. In fact, Google.org was created with the intention to spend its funds in the next 20 years or sooner.
I've never heard of this before today, but I'm interested to see where it goes...
On 9/14/06 the New York Times posted this article about Google.org, which is Google's for profit philanthropy. To quote the article, its for profit structure allows "it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes."
Only time can tell whether this type of philanthropy can actually last, but it seems that they are off to a good start. Instead of throwing tax-deductable dollars at organizations working on the global warming issue (one of Google.org's mandates), the for profit philanthropy is using it funds to "develop an ultra-fuel-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline." A traditional nonprofit organization would never be able to invest the capital needed in such a venture. And although traditional nonprofits may have contributed much to the reseaerch needed to build our collective understanding of global warming and its causes and effects, these organizations are limited in their ability to catalyze change. For profit organizations are also limited in their ability to find a solution because the must be conscious of the bottom line. Google.org has neither of these limitations; rather it is able to invest as much money as necessary and does not depend on financial success, but it can profit from any financial returns. Not to mention, if it succeeds, a portion of those returns go back to the government.
In response to one of Paul's earlier comments, there is no impetus here to desert the mission in the interest of money. In fact, Google.org was created with the intention to spend its funds in the next 20 years or sooner.
I've never heard of this before today, but I'm interested to see where it goes...
posted by Anonymous @ 10:32 PM
3 Comments:
At 6:20 PM, September 17, 2006,
Giselle said…
I heard a story about this on NPR on Thursday morning, and there was a great quote from a google.org rep that was along the lines of "traditional non-profits can only play one note on the piano: we can use the whole keyboard", referencing their for-profit status and resources.
So is this the changing face of philanthropy? If more companies and organizations choose to go the for-profit route with their philanthropic endeavors, what will happen to the non-profits without the arsenal of tools at their disposal? Can the two really share the playing field fairly? I'm interested to hear what y'all think about this, as I'm torn as to whether I'm in favor of or against it.
Here's the link to the NPR story, if you're interested:
http://www.npr.org/templates/story/story.php?storyId=6073436
At 6:29 PM, September 17, 2006,
Paul Jonas said…
First of all, the article goes on to those skeptics (of which I am one) about what will happen if Google Inc. ever faces economic downturn. Ultimately google.org's board of directors have the final say of where the funds go.
I hate to be a member in the skeptics group. I also realize that Google is not your average company. They have an amazing track record as far as putting people first and doing it with great success. Google has been extremely faithful to its promises before and to the people that support it (remember their refusal to cooperate with the DoJ?).
To me, it seems like this venture will allow google to completely side-step the non-profit "middle-man" and, because of its size, it will be able to take on causes directly. They have the size, the clout and the funds to support every step of the way. They can monopolize an issue and attempt to solve it with their own thus-far successful methods of problem-solving.
This may be a sign of the way that things are going. One more signpost on the road to privatization. Schooling has begun to go that way as we know, and now philanthropy is going for-profit. The things we used to look to the government for and nonprofits for are no longer being covered or they are simply not working. Google, which has always been deviant from the usual way of doing things can now take any problem and go at it the Google way.
I really wish I could get my hands on their business plan with this venture. Has the term "venture philanthropy" been coined yet? Let me google it.
Dang.
At 11:30 PM, September 17, 2006,
Paul Jonas said…
ACK! I'm turning into a softie! ;-)
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