South-Western - Management  
Google Outlines Philanthropic Plan
Topic Ethics and Social Responsibility
Key Words Corporate philanthropy, charitable giving
News Story 

Google, Inc.'s corporate philosophy reads "Don't be evil." In accordance with this quirky philosophy, the company has committed itself to the goal of doing good works. It has committed more than $900 million in stock and a share of its profit toward good works. Google.org will focus on global poverty, energy, and the environment. Contributions are funded with 1% of their stock and 1% of annual profits. Google earned $390 million in 2004.

Google.org's activities will be organized around three areas: a charitable giving foundation that is giving grants to non-profit organizations that address global poverty, free advertising for nonprofit organizations, and funds for nonprofit and other socially-minded businesses. The foundation has already made about $6 million in grants, invested $2 million in the One Laptop program that is dedicated to getting cheap laptops to children around the world. They have also provided about $33 million in free advertising for nonprofits.

Questions
1.

Define discretionary responsibilities. How is Google exercising its discretionary responsibilities? In your opinion, will their philanthropic plan help or hurt their stock value?

2.

How important is a company's charitable contributions to its shareholders today? Do some research on the Internet about large American companies' philanthropic activities and come to class with one or two good examples to share.

3.

One of the charities that Google is supporting is called One Laptop per Child which aims to distribute cheap computers to children in developing countries. Give at least two reasons why Google may have chosen this charity to support. How important is it for a company's philanthropic activities to be aligned with their business activities?

Source "Google Outlines Philanthropic Plan" The Wall Street Journal, Oct. 12, 2005, p B5.
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