South-Western - Management  
Philanthropy Google’s Way: Not the Usual
Topic Ethics and Social Responsibility
Key Words Philanthropy, for-profit status
InfoTrac Reference A151362462
If your textbook came with an InfoTrac passcode, click here to login on InfoTrac.
News Story

Google’s founders have set up a new kind of philanthropy and given it $1 billion in seed money. Unlike most charities, Google’s venture will be for-profit, and will be allowed to fund start-up companies, form partnerships with venture capitalists and even lobby congress. Its mission will be to tackle poverty, global warming, and disease.

One of Google.org’s first projects will be an ultra-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline. The goal of the project is to reduce dependence on oil while alleviating the effects of global warming.

Google.org is drawing criticism for its structure and its goals. By choosing for-profit status, Google will have to pay taxes if company shares are sold at a profit, or if corporate earnings are used to finance Google.org. Google’s founders like the flexibility that the for-profit status gives their new organization. For example, the company could form a company to sell its newly converted cars, finance the company with venture capitalists, and hire a lobbyist to pressure Congress to pass legislation to grant a tax credit to consumers who buy the cars.

Google.org’s new executive director, Dr. Brilliant, agrees, saying that it would be great if the new company’s ideas made a profit, but the true emphasis is on social and not economic returns.

Skeptics say that making the ultra-high-mileage car Google.org envisions is not so hard, but finding the fuel for it presents a real challenge. They also note that the money allotted to the foundation might be needed by the company in the event of a corporate downturn. And they bring up the question of how effective a single entity can be in the fight against global problems.

Dr. Brilliant also hopes to develop an “early detection, rapid response” system for disease outbreaks.

Questions
1.

Read about the history of corporate philanthropy in your textbook. How has corporate philanthropy changed in the last century?

2.

What is unique about the way that Google.org has set up their corporate philanthropy?

3.

What are the drawbacks and the positive elements of the way that Google ahs chosen to structure its new charitable enterprise?

4.

The article quotes skeptics who feel that the venture will not be successful for various reasons. What is your opinion? Be prepared to discuss your thoughts in class.

Source “Philanthropy Google’s Way: Not the Usual,” The New York Times, September 14, 2006, pNA.
Instructor Discussion Notes Discussion Notes
These notes are restricted to qualified instructors only. Register for free!

Return to the Ethics and Social Responsibility Index

©2006  South-Western.  All Rights Reserved     |