Googling for Charity


When Google (GOOG) founders Larry Page and Sergey Brin took the company public more than a year ago, they promised in a letter to shareholders to use 1% of the company's equity and profits for philanthropy. The hope: giving by Google would eventually "eclipse Google itself in terms of overall world impact," the executives wrote.

Until last week, just how they planned to act on that pledge remained a mystery. But on Oct. 11, Sheryl Sandberg, Google's vice-president of global online sales and operations, unveiled plans for Google's philanthropic empire in a posting on the company's blog.

With an initial endowment of $90 million, the new foundation puts Google on track to rank alongside the biggest U.S. corporate givers, many of which have been around a lot longer. Wells Fargo (WFC) reported gifts of $93 million last year, and Target (TGT) cited gifts of $107.8 million in BusinessWeek's 2005 Survey of Top Corporate Givers.

Google's philanthropic giving will fall under the umbrella of a network called Google.org, which will include other forms of social investing. Ultimately, the outfit will spend money equivalent to about 1% of the number of shares it had when it went public -- roughly 3 million -- on Google.org. Based on the current stock price, that implies spending of more than $900 million.

And while many corporate philanthropists pursue traditional causes such as education, Google is focusing its philanthropic efforts on alleviating world poverty and addressing environmental problems. In another unusual move, it will fund for-profit endeavors through Google.org.

BusinessWeek Staff Editor Jessi Hempel recently spoke with Sandberg about Google's plans. Edited excerpts of the conversation follow:

Can you explain how Google.org works?

When you think about our goals in philanthropy, they are to make a difference in the areas of poverty, and energy and the environment as well. Google.org is the umbrella name we are giving our efforts, which will be composed of a lot of different parts.

The foundation will be one part. We expect to do some investing in social entrepreneurs, either with for-profit companies or nonprofit companies. We plan on doing things that Google runs itself, and all of these things will be under the broad umbrella of Google.org.

The reason that umbrella is so broad is so we can maintain the flexibility to do whatever we can to make things better. There are individual entrepreneurs doing great work. There are social-venture funds, for-profit venture funds -- all of these things are having an impact. We're giving ourselves the flexibility to follow any of these approaches.

How closely are founders Sergey Brin and Larry Page involved?

They are leading the effort for the company. The whole idea behind this was their vision. They laid it out in their original founder's letter prior to our public offering, and they are the driving forces behind this for the company.

Some shareholders have criticized Google because they say it isn't the role of a public company to give away shareholders' dollars. How do you respond?

The important thing for our shareholders is that before any of them became shareholders, this was announced as part of what we filed to the public and before the IPO.

When we were raising funds and giving people the opportunity to become shareholders, Larry and Sergey said very clearly to the world, we are going to take 1% of our equity and profits, and we are going to do philanthropic work with it. This is part of the DNA of Google, and it's part of what you are investing in.

So shareholders should have known they were investing partially in philanthropy?

They did know they were investing in this. We think it's important not just for the world, but for our company. Efforts like this and thinking out of the box are part of what make Google special and what drives us to have the innovation, which is what shareholders are buying when they purchase our stock.

How philanthropic are individuals within Google?

Anecdotally, I have set up a number of outreach programs within the company. There has been a lot of demand in the company for people to explore ways to do their own philanthropic giving or be part of Google.org efforts. We have had philanthropy people come in and speak about all kinds of topics, and there is a strong demand for more of that and for people to continue to be involved in any of our philanthropic work.

Are Google employees involved in Google's philanthropic work?

I can give you one example. We run something called Google Grants. It's a good example of a project Google might run itself for Google.org. We give free advertising to nonprofits. We have over 850 nonprofits in the program right now, and we've given $33 million in free advertising.

It's a program run entirely by Google and largely we use a volunteer workforce within the company. It's people who volunteer their evening and weekend time to help us work with these nonprofits to run (their companies). That's a good example of community involvement within our own community.

How will you staff Google.org?

We have a small internal staff right now, as well as some other people working on it. And we are looking for an executive director for the effort as well.

I noticed Google is contributing $2 million to the One Laptop Per Child program being spearheaded by Nicholas Negroponte of the Massachusetts Institute of Technology, which aims to make $100 laptops available to students (see BW Online, 10/04/05, "Help for Info Age Have-Nots"). Do you worry that Google's funding of tech initiatives might be considered self-interest? Is that part of the reason why you would want for-profit funding sources -- so you could fund that without appearing to use your philanthropy for self-interest?

That's exactly right. We want to fund what's best for the world. We do not approach Google.org as furthering our own corporate interests at all. We approach it as doing whatever is best for the world.

We are a technology company, so it's obvious there are technology-related things we think can make a big difference and we want the legal flexibility to invest in developing those ideas.

How do you figure out what's best for the world? That's a big question.

It's a broad statement to make, sure, and we certainly don't think we're going to figure out what's best for the world alone. We are talking to everyone. Larry and Sergey have reached out to people all over the world.

We're interested in fighting poverty in the real global sense of the word, the 4 billion people living on less than $4 a day. We're interested in anything that will help us make a difference over time. We've announced partnerships with the Acumen Fund, Technoserv, and a group of professors coming out of Harvard and Berkeley. We're especially open to any partnerships that will help us make a difference.

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