Virgin and Google: But Is It Philanthropy?

Richard Branson looked over the commitment document, looked up at President Bill Clinton, and held his pen in the air with just a short, dramatic pause.

"That's an awful lot of noughts," he quipped.

Then he bent to the task, scratching his name on an agreement that will commit all profits from his transportation empire toward the development of alternative and renewable fuels and technologies - a commitment valued at $3 billion.

  Clinton and Branson 
  Originally uploaded by onPhilanthropy.

But it's not charity, and it's certainly not philanthropy as it's commonly defined. For the second time in a week, a major international brand has made news with its "philanthropy" but reserved the for-profit status of its commitment of funds. Virgin and Google may well be changing the rules of corporate philanthropy, certainly with the perceived sizes of their commitments - these aren't basic social corporate responsibility program; they're large outlays with even larger goals.

And yet to Branson, the reasons for this commitment (which amounts to his company investing its profits in other companies or startups in the alternative fuel sector), seemed explicitly personal. First, he said, he believes in President Clinton's leadership and the network of NGOs, companies, and governments that he has assembled. Then he added in a hallway interview:

"I've got children and I hope to have grandchildren one day. At the moment everything hear about what's happening in the world is very worrying and somebody has got to do something about it."

At Google, at Virgin, and with the foundations of the billionaire eBay founders the motive is personal and concentrated at the top. Indeed, eBay's Jeff Skoll included a desire to do good as part of eBay's founding DNA as a company.

"When Pierre Omidyar started eBay, he had a vision from the beginning that eBay could be a real across-border platform. So when we built the company it was from a very, very democratic viewpoint ... we believed that when people trade with each other, they get to know each other."

Earlier this week, my colleague Dr. Susan Raymond analyzed the hub-bub over Google's "for-profit philanthropy" and, I think, really captured the quandary facing those of us who work in the philanthropic sector:

When (if) Google.org’s investments in technology pay off, Google.org will reap the financial rewards.  It may not distribute these to shareholders.  It may retain them for the next round of social investments, but the same may not always be said about its partners.  Also gaining will be the venture capitalists (all of whom, one assumes, got where they are not with bleeding hearts but with cold hard analytics) who have joined in capitalizing the investments.  Everyone will make money.  Jobs will be created.  Value will be added to the economy.  Taxes will be paid.  AND the environment will be cleaner, and global warming will take one more left jab to its chin.

How is this “philanthropy?”  The end is socially driven, but the means are the beauty of capitalism carried out largely in the marketplace.

Clearly, The End of Definitions is upon us.

This appears to be the case. Speaking on a panel with Bill Gates, President Clinton introduced about risk and reward as factors that have been lacking in what we in the west have regarded as the developing world.

"You know, Bill Gates and I try to do this in different ways but I think we agree on two things. One, you must have a measurable impact. Secondly, there has historically been a total absence of the capacity to reward talent and effort in the developing world. There is just a broken connection between effort and reward and that leads to a sense of hopelessness."

So perhaps the traditional investors' metrics of risk and reward will not be applied to "philanthropy" - if that's what we call it at all.

Comments

[Skylab]

Sorry folks, but if your definitions are eroding, then they were based on an untrue premise in the first place. Truth is durable. Philanthropy has always been about the wealthy investing in their vision of a better future. Can you not see that the Carnage Endowment and the Nobel Institute are profit making organizations with a binding mandate for external investment of their profit? One's tax status is merely the whim of one's current government. The wealthy have long known that giving away money will not assuage the guilt with which they are indicted by some bleeding hearts. A wise investment, however can change history. Over the years they have just gotten better at expanding the time horizon of their investments. Durable change can only come through cold hard analytics, so if your heart does bleed, give up on wishing you were rich so you could do something about it. Go do something about it and if your vision is true you may very well get rich!