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A Wave of the Future? For-Profit Non-Profits
Does the phrase "for-profit nonprofit" sound like an oxymoron? As the founders of the world's most visited site - Google - Larry Page and Sergey Brin don't think so.
In 2004, six years into the founding of Google, Page and Brin established the Google Foundation with $90 million. The foundation began supporting and promoting ventures for economic development and poverty eradication in developing countries. The foundation attached particular importance to market-based, entrepreneurial, microfinance and technological solutions. Google also dedicated funds to health research and relief, supporting the work of such organizations as the Make-a-Wish Foundation and Doctors Without Borders. By 2006, the foundation has donated $33 million to 850 nonprofits in 10 countries for free advertising, helping them bring their missions to public attention.
Recently, Google made the next step and established a philanthropic organization named Google.org, endowed it with $1 billion to combat poverty, disease and global warming. This organization, however, will not be a charity in the traditional sense of the word. Unlike the majority of existing philanthropic foundations, Google.org will be a for-profit non-for-profit.
What is the rationale for this unusual structure?
Google founders believe that the organization's for-profit status will allow Google.org to do something that traditional nonprofits cannot: make profits, fund start-up companies, partner with venture capitalists and lobby Congress. It will also have to do something that other nonprofits do not - pay taxes.
Page and Brin also believe that the for-profit status will
give Google.org additional flexibility and
Dr. Brilliant, the new executive director at the helm of Google.org, draws a parallel between the traditional structures of corporate foundations to a musician limited to playing only the high register of the piano. "Google.org can play on the entire keyboard. It can start companies, build industries, pay consultants, lobby, give money to individuals and make profit." Quite importantly, if Google.org returns a profit, the profit will stay with Google.org and will not be used to fund other Google activities.
A novel move, isn't it? Page and Brin hope that "someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the world's problems."
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