Google.org, self-referred to as the philanthropic arm of Google, was featured in the September 13, 2006 issue of The New York Times. The interesting aspect of Google.org, which will focus on on several areas including global poverty, energy and the environment, is that the organization has been established as a for-profit corporation not exempt from paying federal income taxes.
While Google.org will be taxed on its earnings and its donors will not receive a charitable deduction for their contributions, the organization will have greater flexibility to operate than a nonprofit corporation exempt as an organization described by Section 501(c)(3) of the Internal Revenue Code and classified as a private foundation. For example, Google.org may operate substantial commercial businesses and lobby without limitation on the expenditure of its resources.
On the other hand, critics point out that how Google.org expends its resources is ultimately up to its board of directors and shareholders. Accordingly, money contributed to the corporation ultimately may not be used for charitable purposes. Moreover, the public may never see how the money is spent if the tax returns are kept private as part of the tax filings of its parent, Google Inc.
Despite the criticism, the operation of a social enterprise as a for-profit is neither new or prohibited. It is another vehicle through which many individuals and entities can do good work and some will no doubt abuse.
On Google.org’s home page is the following quote from founders Sergey Brin and Larry Page:
We hope that someday this institution will eclipse Google itself in overall world impact by ambitiously applying innovation and significant resources to the largest of the world’s problems.