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Charity pays

It remains to be seen whether Google, having shown the world that ?you can make money without doing evil?, can prove that ?you can do charity while making profit?.

india Updated: Sep 18, 2006 03:31 IST
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Almost $ 60 billion flows from developed to developing countries as financial aid each year. Relatively speaking, this is not a significant figure — it makes up only 0.5 per cent of the $ 12 trillion GDP of all low and middle-income countries (excluding India and China). On top of that, a large part of it does not reach its beneficiaries, largely due to corruption and inefficiency. This is why the increasing ‘corporatisation’ of aid seems a positive trend.

Now Google, the leader among search engines, has launched a ‘charity for profit’ with an initial investment of $ 1 billion. A ‘profitable charity’ might sound like an oxymoron, and it is already inviting criticism from aid puritans who prefer to stick to the no-profit-no-loss moral high ground. However, there is much going for this project. First and foremost among these is the infusion of a strong corporate ethic and the efficiency that can come only with a profit motive. Take, for instance, Google.org’s plans to develop a highly fuel-efficient hybrid car engine that could run on electricity, ethanol and petrol. As a for-profit corporation, Google.org can adopt corporate methods to sell these cars and perhaps even lobby Congress to encourage their use. Moreover, since Google.org will pay taxes, its finances will be open to scrutiny and, hopefully, rule out corruption.

However, critics like economist Milton Friedman argue that companies should stick to making money and leave charity to their enriched shareholders. Images of money — and power-hungry MNCs — fattening their wallets at the expense of the gullible poor in developing countries are easy enough to visualise and are not entirely untrue. However, it is the ‘corporatisation’ of aid that has made aid work ‘competitive’. For instance, aid and development professionals from the developed world are skilled professionals with extensive education and hands-on experience. This is a positive trend worthy of emulation. Meanwhile, it remains to be seen whether Google, having shown the world that ‘you can make money without doing evil’, can prove that ‘you can do charity while making profit’.

First Published: Sep 18, 2006 03:31 IST