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Current Issue : Fall 2009

Google: For-Profit Philanthropy

Google is known for many things: its innovative search methodology, its pricing structure, even its lavish employee benefits (an office complex designed like a college campus and a chef-driven cafeteria), but one recent initiative has little to do with its ability to out-search or out-perk its competition. When this for-profit corporation created the philanthropic division Google.org, it grasped the mantle of philanthropic innovator as well.

The Google.org division stands alongside divisions for engineering, sales and finance, but it is tasked with a very different mission — addressing climate change, poverty, and emerging diseases.1 Google.org makes grants to nonprofits, just like a traditional foundation. But what makes it unique is that it also behaves like a business, making equity investments in for-profit companies. Wherever possible, Google.org also uses Google Inc.’s human resources, technology, and products to pursue its philanthropic goals.

Of course, companies have long blended philanthropic and business objectives. They make contributions, commit to corporate social responsibility, and even form social enterprises. “For-profit philanthropy,” though, differs from these familiar techniques in both structure and scale. Likewise, for-profit philanthropy stands in stark contrast to the nonprofit, tax-exempt form of organization typically used by those pursuing exclusively philanthropic endeavors. This unfamiliar course allows Google.org to pursue philanthropic objectives, while avoiding the legal restrictions applied to philanthropic entities structured along traditional lines. In avoiding these restrictions, and circumventing the enforcement and oversight associated with traditional nonprofits, Google’s new for-profit model raises important questions about how (and if ) for profit philanthropy should be regulated.

1. See Google.org, What We’re Doing, at http://www.google.org.