Google has launched its charitable organizations with funding starting just shy of a billion dollars.
As the Washington Post explains, the organization will be atypical, with a $900 million Google.org and a $90 million Google Foundation.
While the Foundation looks to be more of a regular charity organization, Google.org will be financed through 3 million shares of Google stock, which means the value will likely rise as the company grows (the pledge is a twenty-year commitment). Because of the arrangement of Google.org, they will be free to invest the money as they see fit, including ways not allowed under nonprofit charity tax law.
This means Google can fund entrepreneurs in poor countries, even if they make money off the deal, and they can provide MIT’s $100 laptops to poor children, which can be seen as helping Google’s core business.
Google Vice President Sheryl Sandberg said initial projects include funding research to examine the best ways to supply clean water and reduce infant mortality in Kenya; training and financing budding entrepreneurs in Ghana who would establish new local businesses there; investing in the socially responsible, New York-based Acumen Fund; and supporting an initiative to supply laptop computers to children who do not have them.
The Google Blog says that they want Google’s philanthropic efforts to have more of an impact than Google itself. Given how much Bill Gates has given (and will still give), and that none of it will ever have the impact Microsoft has had, if Google is as successful as Microsoft has been that will be a tough goal. Google’s must figure they can do more by investing smarter, not harder.
We established the Google Foundation, funded it with $90 million and have made a few initial commitments. We’ve contributed $5 million to support Acumen Fund, a non-profit venture fund that invests in market-based solutions to global poverty. Acumen Fund supports entrepreneurial approaches to delivering affordable goods and services for the 4 billion people in the world who live on less than $4 a day.
We’re also working with TechnoServe to build small businesses that create jobs and promote economic growth in the developing world. With TechnoServe, we are funding an entrepreneurship development program in Ghana that includes a business plan competition and seed capital for the winners to build their businesses.
In addition, we are working with Alix Zwane and Edward Miguel of UC Berkeley and Michael Kremer of Harvard University to support research in western Kenya to identify ways to prevent child deaths caused by poor water quality.
We’ll follow through on the other commitment – one percent of profit – by taking one percent of each year’s profits and donating and investing that too. Our first step in meeting these commitments includes a $90 million cash donation to the Google Foundation and a commitment of up to $175 million over three years across our other Google.org efforts. We don’t expect to make further donations to the Foundation for the foreseeable future.
(Hat-tip: Atul)
Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search engines.
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