Google creates philanthropic arm
SAN FRANCISCO — Google Inc. is financing its promise to make the world a better place with an initial commitment of nearly $1 billion to a philanthropic arm devoted to causes that mesh with the online search engine leader’s crusade.
The altruistic effort, formally announced late Tuesday under the umbrella of Google.org, follows through on a pledge that the Mountain View, Calif.-based company made last year as it prepared its ballyhooed initial public offering of stock.
At the time, Google co-founders Larry Page and Sergey Brin vowed to create a company “that does good things for the world even if we forgo short-term gains.” Toward that end, the pair said they would earmark 1 percent of Google’s stock and future profit for a charitable foundation.
But Brin and Page have since decided their company’s ambition extended beyond the limitations of a traditional foundation, prompting them to pool all the company’s philanthropy under Google.org.
“We hope someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the largest of the world’s problems,” Brin wrote in the company’s most recent annual report, echoing sentiments that Page first spelled out last year.
With more than a year of rapid financial growth behind it, Google has finalized the formula for calculating how much money will be devoted to philanthropy during the next 20 years.
To start, the company is endowing the Google Foundation with $90 million and budgeting another $175 million to invest outside the foundation, said Sheryl Sandberg, Google’s vice president of global online sales and operations. Google is investing outside the foundation because it plans to put some money into “socially progressive” companies striving to turn a profit.
“It’s not a lot of money in the face of all the world’s problems, so we want to make sure to get the most out of it,” Sandberg said.
Google is pegging its total philanthropic commitment to the value of 3 million company shares — slightly more than 1 percent of the stock outstanding at the time of its IPO 14 months ago.