Some Question Structure of Giving, Which Allows Company More Flexibility
By David A. Vise, Washington Post Staff Writer, Wednesday, October 12, 2005; Page D04
Google Inc. is launching an unusual corporate philanthropy campaign
that will focus on fighting poverty and disease in Africa, addressing
energy and environmental issues, and assisting nonprofit groups by
giving away free online advertising. Rather than doing all of that through a traditional corporate
foundation, which has certain tax advantages, Google is setting aside
the equivalent of 3 million shares of stock, worth more than $900
million, to fund an entity called Google.org. It is separately putting
about $90 million into a newly created Google Foundation, officials
said.
By using Google.org for the bulk of its charitable giving, the company
will have greater flexibility in how it deploys the funds since the
affiliate will not be subject to the restrictions imposed on
foundations by the Internal Revenue Service. For example, Google.org
will be able to invest in projects promoting entrepreneurship in Africa
that are off limits for foundations because the programs turn a profit.
It will also support charitable initiatives that spread the use of
technology and could be viewed as questionable for a foundation since
they are closely related to Google’s business.
Shareholder activists said Google’s charitable commitment raises
questions about whether this is an appropriate use of company cash or
whether company founders Sergey Brin and Larry Page ought to make
donations to their favorite causes personally. …