Category Archives: Philanthropy

Google announced today that Google.org will be launching soon, following through on their promise to launch and philanthropic arm of the company. Clearly, this is good news and the Google Foundation will help (and already has helped) millions of people. But I have a few concerns:

• Timing – Where was this a few years ago? It’s important for integrated corporate philanthropy to be woven into a company’s mission from the start. The status quo cannot be "once we have our IPO and make billions, we’ll start donating to charity."
• Focus – So far they are giving a few million here and a few million there. From the Make a Wish Foundation to Doctors Without Borders. A total of 850 different nonprofit organizations have already received grants. Will they be able to monitor the social impact across all these different areas? Will there be a guiding social mission of the Foundation? In many ways this mirrors the for-profit business….
• Staffing – They’ve already given away millions of dollars, but they say "We are working on staffing as well as defining the goals, priorities, and principles of Google.org." Wait – don’t you do that BEFORE giving away the money? Who’s overseeing the follow-through of the grants?

Again, this is fundamentally a *great* thing, but I also think we want to hold non-profits to a higher standard than simple applause for doing good. Particularly when it’s a philanthropic arm of a for-profit corporation, there is no excuse to not run a tight, results-oriented organization. This means getting the right people on the bus before driving it and making sure each dollar is accounted for.

Link: Reason: Rethinking the Social Responsibility of Business: A Reason debate featuring Milton Friedman, Whole Foods’ John Mackey, and Cypress Semiconductor’s T.J. Rodgers.

This is a thought provoking back and forth between the Whole Foods CEO, Milton Friedman, and the Cypress Semiconductor CEO. It’s long so print it out if you’re interested in corporate philanthropy; is maximizing profits the means or the end itself?

I’ve talked some in the past about corporate philanthropy. In the aftermath of Hurricane Katrina, I’ve seen many companies donate money, portions of revenue, or resources to the victims. At my company Comcate, we are in a unique situation since local governments are our clients and over the past few years we’ve trained thousands of employees on effective customer service and case management.

As announced on the Comcate blog, we are donating our CRM software to agencies in the Gulf Coast directly or indirectly affected by the Hurricane. For agencies in that area that have computers, they will reap significant benefits from our case management, code enforcement, GIS, and wireless functionalities. We are encouraging affected agencies to contact us to receive either eFeedbackManager or Code Enforcement Manager free for 12 months including off-site hosting, training, and support. We hope to do our part in responding to this disaster and I tip my hat to all companies contributing as they can to the relief effort.

In previous posts I have professed my support for integrated corporate philanthropy and the model of devoting 1% of employee time, profits, and pre-IPO equity to a charitable cause. I believed at the time – and still do – that corporations can do good by doing well and that there are a number of unquantifiable morale benefits in the workplace when employees feel like they are part of a bigger cause above and beyond profits. That being said, I admit to drifting right in my support for free markets and minimal government interference. (In general, I find some liking in some neoconservative tenets.) So, I found Richard Posner’s recent posts (part one, part two) on the social responsibilities of corporations provocative to say the least. As you can imagine, Posner, given his propensity to link everything to markets and economics, thinks corporations provide maximum social benefits by maximizing return to shareholders. There is a lot to be said for this viewpoint. Both he and Becker venture into other areas of corporate law and economics on which I do not have sufficient understanding to comment intelligently. I will, though, excerpt this quote from Posner where he veers off course:

One comment that I am quite sympathetic to is that the social return to profit-maximizing activities may actually be higher than the social return to corporate philanthropy, when “corporate philanthropy” isn’t just a fancy name for public relations. As I argued in an earlier post, philanthropy directed at poor countries may actually reduce the welfare of those countries, and the same is probably true to an extent of purely domestic charity. The general effect of charity is to postpone the making of difficult decisions. For example, philanthropic gifts, private or public, to the arts retard serious efforts by artists and artistic organizations to create work for which there is a genuine interest on the part of the public, and philanthropic gifts to universities help to shield them from competitive pressures.

A commenter has smartly replied: “Who decided that popularity was the purpose and overarching goal of art? Did I miss a meeting? The primary rationale for supporting arts with philanthropy is the desire to encourage art that is potentially unpopular but hopefully mind-expanding.”

There’s been a lot in the news about the G-8 Summit and increased aid to Africa. I will use this as an excuse to talk about 1) Governmental aid to poor countries like those in Africa, 2) Individual philanthropy to non-critical causes.

I am not of the belief that blindly doubling or tripling aid to Africa is a smart thing to do. Although I haven’t yet read Jeffrey Sach’s new book The End of Poverty I am generally skeptical of the argument that if we only gave a billion more dollars to Africa all their problems would be solved. Instead, I believe greed, corruption, and poor governance cannot be overcome by a bigger check. Smart fellows like Clive Crook in the National Journal articulate why smart aid is so much more important than more aid. I applaud the Open Society Initiative’s work on governance in Africa and elsewhere. Indeed, as Crook points out, everyone agrees that aid should go to states that are well-governed. The problem is nearly all African countries are not, and this is not a problem that more money can solve.

Now that we’ve all been exposed to the travesties in Africa and other poor countries, it made me reflect on individual philanthropy. I believe that EVERYONE should be a philanthropist in one way or another – get active in causes you believe in. Most people I know – including me! – are active in causes that are in some way local or relevant to us. That is, it makes us feel better when we support a local school because we can see (and reap?) the fruits of our efforts. I am involved in efforts to teach entrepreneurship education to youth. All of this is fantastic. But compared to millions of children dying of hunger or thousands of women raped due to corrupt police…….It is so easy to give and be active in causes that touch you. It is so much harder – and admirable? – to be active in causes that do not.