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Google.org, a For-Profit Charity 355

Google has set up a subsidiary, Google.org, a for-profit philanthropy with initial capital of a billion dollars. Not being organized on a tax-free basis carries both advantages and drawbacks. From the article: "Unlike most charities, this one will be for-profit, allowing it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes." One of Google.org's first projects is the development of a plug-in hybrid vehicle that achieves a mileage rating equivalent to 100 MPG.
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Google.org, a For-Profit Charity

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  • Odd. (Score:2, Insightful)

    by Tavor ( 845700 ) on Monday September 18, 2006 @12:16AM (#16127847)
    Odd that Google would take a for-profit route, considering how many "non-profits" lobby congress. (I use that term loosely, because of certian Telco and Music NPOs.) Granted, I would LOVE to see Google.org create a better Hybrid, counter the Telcos at their own game, and hopefully devolop a Nationwide Broadband/Fiber Initiative.
  • by spoco2 ( 322835 ) on Monday September 18, 2006 @12:29AM (#16127900)
    "And the largest disadvantage to a "for-profit charity?" Your donations are NOT tax deductible.

    They've slit their own throats on this one."

    Yeah, the people behind Google, the most successful web venture in the world, didn't give any thought at all as to the consequences of making it a for profit charity.

    Have you perhaps thought that they are targetting other methods of funding that don't rely as much on the tax deduction angle? How about that they are planning on making products that can make money and therefore self fund the charity?

    I highly applaud them, and I think the lack of needing to be non profit could be very liberating and free them up to do many things they otherwise may have not been able to.

    Very excited to watch this one!
  • Re:Odd. (Score:5, Insightful)

    by BacOs ( 33082 ) on Monday September 18, 2006 @12:32AM (#16127912) Homepage
    Odd that Google would take a for-profit route

    I don't find it odd at all. I'm involved with several FLOSS projects and one of them recently researched starting its own foundation (non-profit) or corporation (for profit). Everyone I talked to (including people associated with the Mozilla Foundation and the Python and Apache Software Foundations) recommended starting a for profit corporation. The restrictions placed on federally tax exempt (501(c)(3)) organizations was too great in their opinion. With a for profit corporation, you have much fewer restrictions.
  • Re:Innovating (Score:5, Insightful)

    by Jah-Wren Ryel ( 80510 ) on Monday September 18, 2006 @12:57AM (#16127997)
    I don't always agree with Google tactics but at least they are innovative. Certainly changing the internet, computers and now looks like cars and beyond.

    On the other hand, one could easily make the criticism that Google has lost focus and are all over the map, doing a lot of things and most them not anywhere near as well as they do web-searching. Perhaps this is a downside of having too much cash - they just don't have enough good ideas and talented people to make efficient use of all that money.
  • Re:equivelent MPG (Score:4, Insightful)

    by Mr Z ( 6791 ) on Monday September 18, 2006 @01:01AM (#16128007) Homepage Journal

    So far, I've seen two main methods of computing the fuel economy of a hybrid. The silliest one is the EPA method, which simply measures emissions and plugs them into a government mandated formula. This works for most traditional cars, but for hybrids it tends to overstate the fuel economy. The other accounts for the amount of gasoline and electricity from the grid used to power the vehicle. If you never plug your vehicle into an outlet, this is equivalent to dividing travel distance by number of gallons of gasoline. If you do plug your car in at night, it gets harder to calculate, since we don't typically burn gasoline to create electricity on the grid.

    About the best you can do is compare emissions equivalence. Electric motors are zero-emissions at the point of use, but the coal plant on the edge of town will belch a little more if you're drawing from the grid. To find a useful ratio, you have to make assumptions about the particular mix of energy sources providing electricity to your home: Coal, natural gas, wind, solar, nuclear, geothermal, etc. For specific regions that's doable, but for a nationwide scale you have to work with averages.

    Given how cheap electricity is compared to many things, I suppose most people will just look at what they're paying at the pump, though.

  • by atomicstrawberry ( 955148 ) on Monday September 18, 2006 @01:03AM (#16128011)
    Ever tried to listen to Ogg Vorbis on your iPod?
  • by anti-drew ( 72068 ) on Monday September 18, 2006 @01:14AM (#16128055) Homepage
    presumably their profit margin expectations will not be as high as they might otherwise be?

    Their profit margin expectations may well be nil. It's merely that they are *allowed* to make a profit, not that they necessarily *will*.
  • Re:Odd. (Score:5, Insightful)

    by argoff ( 142580 ) * on Monday September 18, 2006 @01:25AM (#16128081)
    The truth is that most people need is the power to help themselves, not aid. For example, if a person in LA went down to the store, bought and cooked up some hot-dogs, and then sold them on the street corner - he would likely be in jail, taxed, and fined over 40K before the night was out - and then be forced to get permits and inspections at great expense to himself. I'm sorry, no argument about government protecting people can justify that kind of behavior.

    In Africa, a large amount of US aid was used to build a milk plant. But it was not near any cows or roads, and ended up shutting down. Those kinds of mistakes are much more rare in the private sector, because there is accountabillity and control. Many aid loans were blown by corrupt leaders, who then left it to the citizens to pay back.

    In many countries, investors are more than happy to build factories, roads, mines, infrastructure, and the jobs that go with them. But not if government officials demand bribes, permits, taxes, and high fees at every step of the process, and not if they demand high fees on everything imported and exported, and not if the judiciary is so corrupt or slow that they have no recource if land or other items are taken from them. If you had 100 million dollars, would you put it in Venesuela or North Korea right now? People who have paid a bitter price. That's a lot of money, and then they wonder why they have employment problems.

    In China, millions of people died from hunger until the farmers were able to have property rights, then the problem disapeared and the economy started to boom. Really, who would slave away on a farm where they own none of the take and none of the land. Once again, the people in China didn't need charity nor help from the government, what they needed was property rights. Charity would have prolonged the problem and made it worse. What they needed was the power to help themselves, once they got it then the poverty problems took care of themselves naturally.
  • by bishiraver ( 707931 ) on Monday September 18, 2006 @01:25AM (#16128086) Homepage
    Google.org does not blowback money to google.com, the search engine company.

    The government should do a few main things:

    -make sure other people don't take my stuff, my life, or impose upon my life in a negative way.
    -protect my life and the sovereignty of my country.
    -make sure its populace is well-educated and healthy
    -deal with the people who cross the above two in a just manner.

    In doing the above in a farsighted manner, it will maintain a good quality of life through protecting our nature reserves (if we don't have nature reserves, then arguably a future generation may indeed have a lower quality of life, lack of knowledge, and a higher death rate. Education and health may well be an extrapolation of 'protect my life.'

    Of course, to do all of that a huge network of laws is written, several branches of government are created, and everything gets bogged down in beaurocracy - especially if morals are the key focus of politicians.

    Google's involvement with the chinese government is actually a far cry better than any other search engine - when pages are censored, it tells the user that there were results that were censored. In a devious way, it does more to increase the knowledge of government censorship in China better than showing everything.

    Google is doing things with google.org that a government shouldn't have to do. And you've seen what kind of bumbling the beaurocracy does when this kind of thing is involved.

    Because google's company is knowledge based, it is not beholden to the same types of shareholders as, say, an oil company. This is well shown by their work on a hybrid-electric car. And because it has shareholders, instead of throwing money at problems like poor food and water quality in developing countries, it will work to fix the causitive issues. And with the brilliant minds they have there, I have no doubt this will be extremely successful.
  • by catbutt ( 469582 ) on Monday September 18, 2006 @01:37AM (#16128123)
    I have a hard time seeing how a corporation doing things with the intent of making a positive change is likely to cause more harm than a corporation doing things only for the purpose of enriching its shareholders.
  • by wysiwia ( 932559 ) on Monday September 18, 2006 @01:38AM (#16128126) Homepage
    Can you imagine what one billion dollars would achieve if spent for FOSS? Can you imagine a world where any standard software is free of charge for any kind of computer. Can you imagine a world where even specialised software doesn't cost more a $100? Can you picture how one billion dollars could change the world if spent for FOSS?

    O. Wyss
  • by Anonymous Coward on Monday September 18, 2006 @02:05AM (#16128208)
    Can you imagine what one billion dollars would achieve if spent for FOSS?

    25 clones of Tetris
    24 C standard libraries
    23 stupid desktop widgets
    22 pointless window managers
    21 HTTP servers
    20 Wiki web applications
    19 useless shells
    18 password crackers
    17... Eh, you get the point: Take Freshmeat's frontpage and extrapolate, and that's at best! What you'd probably get is a bunch of people demanding 55 grand a year to work on utterly useless crap.
  • by Christianfreak ( 100697 ) on Monday September 18, 2006 @02:13AM (#16128229) Homepage Journal
    I certainly hope that specialized software doesn't cost just $100 because then there would be no reason for people like me to develop it (since that's what my company does). I love FOSS but face it, there simply isn't a FOSS solution for everything. FOSS is great for commodity software like operating systems and office suites but not so great for specialized things. FOSS is about scratching an itch or becoming popular. Developing specialized software HAS to be about listening to the (few) "customers". As a business owner, I'm certainly not going to waste time with a half solution for anything because in the long run it costs me more money than if I had just developed (or paid to have developed) the real solution I need. That's almost always going to cost me more than $100. I think most businesses are going to be pretty similar in that regard.

    Fortunately I don't think any huge influx of money is going to cause masses of people to switch. There is likely more than $1bn collectively in FOSS already and it hasn't really made much difference.

  • by LunarCrisis ( 966179 ) on Monday September 18, 2006 @02:22AM (#16128253)
    Barring the possibility of failed sarcasm. . .

    That's why they would be careful with exactly who they accept, just like they do with their Summer of Code.
  • by Shihar ( 153932 ) on Monday September 18, 2006 @02:28AM (#16128269)
    Basically, if you declare yourself a non-profit company you get your ball shackled by the federal government in return for them not taking taxes. A non-prof has a dramatically restricted ability invest in other companies and needs follow a pile of regulations. They also are limited in whose money they can take, where they can put that money, and how much of it they can move and how much of it they can save.

    By declaring themselves a for-profit charity the regulatory burden is dramatically reduced. So, when they declare themselves a 'for profit' charity, they are basically declaring they would rather taxed then live by the regulations that federal government imposes on non-profit charities.

    This move does not really surprise me. Google has made itself by being more agile and quicker to adapt then its competitors. If they are going to try something innovative in the world of philanthropy, they are probably going to go for a unique model that doesn't conform well to current non-prof charity regulations.
  • by MadUndergrad ( 950779 ) on Monday September 18, 2006 @02:36AM (#16128282)
    The hybrid still gets all its power from the gasoline. When you start plugging it into the wall (as is the case with these "100MPG hybrids") it stops being entirely a question of efficiency and starts becoming one of battery capacity. That's why the definition in this case is goofy.
  • by Shihar ( 153932 ) on Monday September 18, 2006 @02:42AM (#16128290)
    I have founded and run non-profit entities, and guess what - it is hard, even when you have money. Oversight, restrictions, tax headaches, reporting, etc. You have to actually do things that really help the public and not the owners.

    You answer your own objections. If you declare yourself a non-prof you run into (by your own words) "oversight, restrictions, tax headaches, reporting, etc." That is clearly what they are trying to avoid. Non-profit is a tax classification. They don't want to be under that classification. They don't want to be forced to spend X% of their donations and be prevented from investing X% into other things. That is what being a non-profit does. The non-profit classification works great for some things and it does make sure that people who declare this tax-exempt status really are doing something. Google has said that they want to try something that doesn't pigeon hole into what the IRS and government regulators think a charity should be spending and investing. If Google wants to avoid following government regulations, then they MUST declare their charity a for-profit charity and pay taxes.

    Besides, what is the worst that can happen? Google makes some investments that you disagree with? If that keeps you from sleeping at night don't take a walk down Wall Street or else your head will explode. Even if it is an utter failure it just means that there is one more investment firm investing in things I disagree with. At best, Google breaks out of the mold of charities, does something innovative, and brings something good to all of our lives. So at worst it is more of the same old, and at best peoples' lives are changed for the better.

    Maybe half the reason why corporations can be so tight fisted with giving their money to charity is because every time they try and do something good with it hoping to get an ounce of good will, some jack ass gets up on a soap box and starts screaming into the wind about the evil corporations donating to fight hunger so that they have more orphan babies to eat. Maybe you should save your soap box for when they actually do something wrong.
  • Re:Odd. (Score:5, Insightful)

    by xappax ( 876447 ) on Monday September 18, 2006 @03:00AM (#16128343)
    it was not near any cows or roads, and ended up shutting down. Those kinds of mistakes are much more rare in the private sector, because there is accountabillity and control.

    Ever heard of the Bhopal disaster [wikipedia.org]? It was one of the most deadly industrial accidents ever, and it was due to the negligence of Union Carbide employees (a US corporation). How about the Exxon Valdez [wikipedia.org]? Yet another vast catastrophe caused by irresponsible employees of a US corporation. Or hey, a little closer to geek-home - how about when MasterCard allowed 40 million credit card numbers [msn.com] to be stolen (the largest such leak ever reported) due to poor software design?

    The funny thing about these incidents of corporate irresponsibility is that not only did these companies have totally stupid policies that were very likely to result in danger, once disaster struck they were totally unaccountable for the damage they caused.

    It would be moronic to claim that the government knows best, or that massive bureaucracy is an effective way to make decisions, but this song and dance about how profit-driven instutitions magically become the most efficient and responsible is absurd.

    In many countries, investors are more than happy to build factories, roads, mines, infrastructure, and the jobs that go with them.

    Yes, those factories are often sweatshops. Those roads often damage delicate environment which is needed for eco-tourism, scientific research, or agriculture. Those mines can be unregulated death-traps for miners in addition to causing toxic runoff pollution of local water supplies. None of these problems concern the investor, just the local population. In short, the "infrastructure" eagerly pushed by foriegn investors really isn't infrastructure for the improvement of the country or it's people so much as infrastructure for the improvement of the investor's bottom line. Sure, some officials are just corrupt fucks, but has it ever occured to you that there might be good reasons to try to restrict, regulate, and/or tax foreign companies trying to exploit your sovereign nation?

    I agree with the sentiment that people need to be given the freedom to take care of themselves, but I don't think that empowering and depending on exploitive investors and multinational conglomerates is the way to give people that freedom.
  • by Anonymous Coward on Monday September 18, 2006 @03:08AM (#16128364)
    "...this development, along with the Bill and Melinda foundation, means we now have extremely large, extremely rich companies doing what our governments should be doing."

    Actually, you have it completely backwards. This is exactly what private groups should do and the government should not.

    But I believe we have a first principal mismatch. You want the government to do everything and do not trust the individual. I on the other hand don't want to the government doing anything and I trust the individual.

    It reminds me of a conversation with a friend. He was going on and on about how he wished the government would tax him more so that the government could do good and give his money to those in need. Sadly, it never crossed his mind to give to private cherity. He, like you, worships government.

    See, by having the freedom to choose which charities to give money to you can give to causes that you support. You are not forced to give to causes that the government forces you to give to under threat of imprisonment. Maybe you don't like the military, abortion, or perhaps welfare. The government doesn't give you a choice.

    Why don't people know what true liberty is?

    "Put it this way - if Google's board turned rabid tomorrow, how much damage could it do?"

    Ask that about government. Government has a military and secret police forces.
  • Re:Innovating (Score:5, Insightful)

    by cgenman ( 325138 ) on Monday September 18, 2006 @04:04AM (#16128477) Homepage
    Remember, Google requires their employees to spend one day a week on a pet project. A lot of things like Google Earth and Picasa come from these. Some of these have tremendous data value, like Orkut and Google Desktop. Some, like Picasa, may someday have tremendous data value but don't currently. But they're only hitting 1/5th of the engineer's time.

    Valuable Google Assets: Alerts, Blogger, Desktop, Directory (DMOZ), Images, Maps, News, Toolbar, Web Search, Gmail, Mobile, SMS
    Could be Valuable: Book Search, Catalogs, Checkout, Finance, Froogle, Local, Scholar, Video, Calendar, Groups, Talk, Translate
    Silly, fun, useless to them: Earth, Picasa, SketchUp,

    In the labs: Google Trends, Music Trends, Visually Impaired Search, Notebook, Mars, Page Creator, Public Transportation Maps, RSS Reader, Web Accelerator, Taxi Finder, Suggest, Froogle Mobile, Sets.

    With the possible exception of Mars, that seems pretty interconnected. Some of the silliest ideas, like Google Maps, gMail, the Google Toolbar, etc have become standard usage now. Even the silly ones, like Google Earth, were part of their push to create 3D maps of all major US cities, which would have been a valuable resource if they could have pulled it off.

    They're like the Bell Labs of the 'net. Lot of pure research, some of which is or might be stupidly profitable. But we'll all reap rewards in the end.
  • by Rockgod ( 962796 ) <<kiran.k.varma> <at> <gmail.com>> on Monday September 18, 2006 @04:21AM (#16128515)
    You could do all that or just measure the costs incurred maintaining that vehicle in terms of $/mile or miles/$. This makes details of the fuel used irrelevant. This way most economic car would be the one that gives more miles per buck. And yeah we could keep all the pollution norms in place to make sure that the new type of fuel would be easy on environment.
  • MOD ABUSE? (Score:3, Insightful)

    by GrumpySimon ( 707671 ) <email.simon@net@nz> on Monday September 18, 2006 @06:02AM (#16128680) Homepage
    Does the parent post REALLY need a -1 Troll? You might not agree with him, but there's no obvious trolling above, but a well reasoned and polite response.

  • Re:Odd. (Score:3, Insightful)

    by rs79 ( 71822 ) <hostmaster@open-rsc.org> on Monday September 18, 2006 @06:04AM (#16128683) Homepage
    "Those restrictions are there for a reason. I agree they are sometimes onerous. However, they make it so that the organization actually must do charitable things, and they make impossible to do the "screw everyone and take the money" things."

    A one word rebuttal: ICANN.

  • by Eivind Eklund ( 5161 ) on Monday September 18, 2006 @07:44AM (#16128922) Journal
    Well, I'm from Norway - I think we have the highest gasoline price in the world. I just believe it is STILL underpriced, and that the correct thing to do would be to make the price real - in other words, include the cost of cleaning up after negative sides of the gas. Markets are very very good at optimizing, but they have to have the correct input price. The price of a resource isn't the cost of getting it out of the ground - it's the cost of getting it out of the ground plus the cost of cleaning up afterwards.
  • by Anonymous Brave Guy ( 457657 ) on Monday September 18, 2006 @07:52AM (#16128941)

    And even with our absurdly high tax rates on fuel, some political parties are still talking about adding mega-taxes on "highly polluting vehicles" (as in, extra thousands of pounds per year for having one).

    The thing is, I used to drive a little 1.2-litre Vauxhall Corsa (1995 model) to work. Now I drive a 2-litre turbo Subaru Impreza WRX (2003 model). The former was significantly more fuel efficient (though as an interesting anecdote, far less fuel efficient than the newer model) and would be in one of the lowest bands for these new "environmental taxes". The latter is deemed a monster, and would be in the highest or second-highest band. And yet in reality, the WRX's emissions aren't much higher than a typical family saloon.

    What's really telling is that when I drove the Corsa, I commuted around a 70 mile round-trip per day to get to work. Now I work in the city where I live, and do maybe 1/10 of that. I generate vastly less pollution now than I used to, and most of what I do generate is sitting in artificially generated traffic queues designed by our local bus-mad council to make car driving unappealing and promote bus use. And yet, these proposed "environmental taxes" would penalise me far more today.

    If you insist on using the tax system to make some behaviours unpopular (I question the ethicality of this approach in any context, but that's a different matter) and you want to make pollution from cars unpopular, then taxing fuel rather than the type of vehicle makes far more sense.

  • Overstatement (Score:3, Insightful)

    by anomaly ( 15035 ) <tom.cooper3NO@SPAMgmail.com> on Monday September 18, 2006 @08:18AM (#16129063)
    not only did these companies have totally stupid policies that were very likely to result in danger, once disaster struck they were totally unaccountable for the damage they caused.

    With all due respect,I believe that you're overstating or over simplifying your case.

    The Bhopal disaster was a combination of UCC, Indian government failures and cultural issues. High population density because UCC provided JOBS that paid well, challenges due to differences between American and Indian culture, no infrastructure to support the people (hospitals, sewage treatment, 10K phone lines for 1M+ people, water only a few hours per day, no public transport, so people lived adjacent to the plant) The Indian government turned down offers from UCC to pay for the disaster - because they had an agenda in how the political implications were to be presented and managed.

    UCC ponied up $470M for relief for the victims and families. Half a BILLION dollars seems like more than "totally unaccountable."

    Exxon paid more than $2.5B to clean up after the oil spill. They paid $1.1B in settlements, and they were fined $5B. On top of that, their image was tarnished to the point that people today still avoid buying gas from them.

    Look, I'm no apologist for corporate entities (or government for that matter) but your argument is weakened by your overstatement.

If graphics hackers are so smart, why can't they get the bugs out of fresh paint?