Google.org Takes an Alternative Approach to Philanthropy

Google.org Takes an Alternative Approach to Philanthropy

The founders of Google have set up a philanthropic entity with about $1 billion in seed money and the mandate to tackle poverty, disease, and global warming, but unlike most charities, Google.org is for-profit and will pay taxes, the New York Times reports.

The unique approach enables the organization, established roughly a year ago, to tackle projects with greater flexibility, such as fund start-up companies, form partnerships with venture capitalists, and lobby Congress. The only conventional part of Google.org is the Google Foundation, a nonprofit with an endowment of $90 million. One of the organization's first projects will be to develop a fuel-efficient, plug-in hybrid car engine that runs on ethanol, electricity, and gasoline. Google.org has been consulting with scientists and automakers and has arranged to purchase a small fleet of cars with plans to convert their engines so their gas mileage exceeds 100 miles per gallon.

However, Google will have to pay taxes if company shares are sold at a profit — or if corporate earnings are used — to finance the organization. Plus, any resulting venture that shows a profit will also have to pay taxes. According to executive director Larry Brilliant, all of the organization's spending will be in keeping with its mission, and if Google.org makes a profit with one of its ventures, the funds will stay within the organization and not flow to the search engine company. Still, skeptics are concerned Google's directors might be tempted to take some of the money back during an economic downturn. And shareholders may grumble because tax forms of Google.org will be kept private as part of the tax filings of the parent.

Brilliant, who admitted to being skeptical initially about the for-profit structure of the organization, said he has no desire to work on projects others are already involved in, and Google.org will not necessarily be pushing for high-tech solutions to problems. "Why would we put Wi-Fi in a place where what they need is food and clean water?" he said.

Katie Hafner. "Philanthropy Google's Way: Not the Usual." New York Times 09/14/2006.