Google.org Plans Major Focus on Plug-In Hybrids
- The New York Times report below somewhat
unexpectedly breaks the story that Google.org,
the philanthropic arm of Google (able to both
give grants and invest in for-profit enterprises)
is planning to take a leading role in helping to
commercialize plug-in hybrids. The staff of the
new organization has been in touch with the
principal "players" in the PHEV world, and we
expect they will make a range of announcements in the coming months.
Philanthropy Googles Way: Not the Usual
The New York Times, September 14, 2006
By KATIE HAFNER
CAPTION: Dr. Larry Brilliant, the executive
director of Google.org., used to have concerns
about the new foundations for-profit status.
SAN FRANCISCO, Sept. 13 The ambitious founders
of Google, the popular search engine company,
have set up a philanthropy, giving it seed money
of about $1 billion and a mandate to tackle
poverty, disease and global warming.
But unlike most charities, this one will be
for-profit, allowing it to fund start-up
companies, form partnerships with venture
capitalists and even lobby Congress. It will also pay taxes.
One of its maiden projects reflects the
philanthropys nontraditional approach. According
to people briefed on the program, the
organization, called Google.org, plans to develop
an ultra-fuel-efficient plug-in hybrid car engine
that runs on ethanol, electricity and gasoline.
The philanthropy is consulting with hybrid-engine
scientists and automakers, and has arranged for
the purchase of a small fleet of cars with plans
to convert the engines so that their gas mileage
exceeds 100 miles per gallon. The goal of the
project is to reduce dependence on oil while
alleviating the effects of global warming.
Google.org is drawing skeptics for both its
structure and its ambitions. It is a slingshot
compared with the artillery of charities
established by older captains of industry. Its
financing pales next to the tens of billions that
the Bill and Melinda Gates Foundation will have
at its disposal, especially with the coming
infusion of some $3 billion a year from Warren E.
Buffett, the founder of Berkshire Hathaway.
But Googles philanthropic work is coming early
in the companys lifetime. Microsoft was 25 years
old before Bill Gates set up his foundation,
which is a tax-exempt organization and separate from Microsoft.
By choosing for-profit status, Google will have
to pay taxes if company shares are sold at a
profit or if corporate earnings are used to
finance Google.org. Any resulting venture that
shows a profit will also have to pay taxes.
Shareholders may not like the fact that the
Google.org tax forms will not be made public, but
kept private as part of the tax filings of the parent, Google Inc.
Googles founders, Larry Page and Sergey Brin,
believe for-profit status will greatly increase
their philanthropys range and flexibility. It
could, for example, form a company to sell the
converted cars, finance that company in
partnership with venture capitalists, and even
hire a lobbyist to pressure Congress to pass
legislation granting a tax credit to consumers who buy the cars.
The executive director whom Mr. Page and Mr. Brin
have hired, Dr. Larry Brilliant, is every bit as
iconoclastic as Googles philanthropic arm. Dr.
Brilliant, a 61-year-old physician and public
health expert, has studied under a Hindu guru in
a monastery at the foothills of the Himalayas and
worked as a Silicon Valley entrepreneur.
In one project, which Dr. Brilliant brought with
him to the job, Google.org will try to develop a
system to detect disease outbreaks early.
Dr. Brilliant likens the traditional structure of
corporate foundations to a musician confined to
playing only the high register on a piano.
Google.org can play on the entire keyboard, Dr.
Brilliant said in an interview. It can start
companies, build industries, pay consultants,
lobby, give money to individuals and make a profit.
While declining to comment on the car project
specifically, Dr. Brilliant said he would hope to
see such ventures make a profit. But if they
didnt, we wouldnt care, he said. Were not
doing it for the profit. And if we didnt get our
capital back, so what? The emphasis is on social
returns, not economic returns.
Development of ultra-high-mileage cars is under
way at a number of companies, from Toyota to tiny
start-ups. Making an engine that uses E85 a
mixture of 85 percent ethanol and 15 percent
gasoline is not difficult, but the lack of
availability of the fuel presents a challenge,
said Brett Smith, a senior industry analyst at
the Center for Automotive Research in Ann Arbor, Mich.
Another barrier, Mr. Smith said, lies in the
batteries for so-called plug-in hybrids, which
require more powerful batteries that charge more
quickly than the current generation of hybrid batteries.
There are skeptics, too, among tax lawyers and
other pragmatists familiar with the world of
philanthropy. They wonder whether Googles
directors might be tempted to take back some of
the largess in an economic downturn.
The money is at the beck and call of the board
of directors and shareholders, said Marcus S.
Owens, a tax lawyer in Washington who spent a
decade as director of the exempt organizations
division of the Internal Revenue Service. Its
possible the shareholders of Google might someday
object, especially if we go into an economic
depression and that money is needed to shore up the company.
And there is the question of how many of the
planets problems can truly be addressed by a single corporate entity.
But even while expressing reservations about
Googles approach, Mr. Owens said that the
structure of Google.org eliminates all the
constraints that might otherwise apply.
The only conventional part of Google.org is the
Google Foundation, a nonprofit with an endowment
of $90 million that is constrained in how it
spends by the 501(c)(3) section of the Internal Revenue Service code.
Googles big philanthropic experiment lies in the
part of Google.org where the bulk of the funding
now resides. This part of Google.org will be
fully taxable, with the ability to invest in a
full spectrum of programs and companies.
All of Google.orgs spending, Dr. Brilliant said,
will be in keeping with its mission, and there is
to be no blowback. That is, should Google.org
make a profit with one of its ventures, those
funds will not go to the search engine business,
but will stay within Google.org.
Google had existed for only six years, when, in
advance of the companys initial public offering
in August 2004, Mr. Page and Mr. Brin told
potential investors that they planned to set
aside 1 percent of the companys stock and an
equal percentage of profits for philanthropy. By
the end of 2004, Google.org was formed.
The company has said it plans to spend the money
over the next 20 years, and the Google board
recently approved a more rapid disbursement rate,
$175 million over the next two years.
Poor people cant wait, Dr. Brilliant said.
Dying people cant wait for some 20-year plan.
Its not what were doing here.
Ventures that grow out of Google.org could be
seen to have a competitive edge because they do
not need to show a financial profit. But
financial returns from a project like the
high-mileage car are not necessarily the aim.
I think how you count profit is the issue here,
said Peter Hero, president of the Community
Foundation of Silicon Valley, a charitable
foundation with about $1 billion in assets.
Google.org is measuring return on cleaner air
and quality of life. Their bottom line isnt just
financial. Its environmental and social.
Once Google.org was formed, the company spent
months searching for an executive director. There
was no lack of interest in the job.
Literally thousands of people worldwide got in
touch with us, said Sheryl Sandberg, the Google
vice president who led the search. Wed get
someone who was an amazing technology
entrepreneur but who didnt know anything about the developing world.
Then along came Dr. Brilliant, an affable man
generous with bearhugs and self-deprecating humor
whose unlikely résumé looks like a composite
career summary of multiple high achievers.
After receiving his medical degree, Dr. Brilliant
studied for two years with Neem Karoli Baba, a famous Hindu guru.
As Dr. Brilliant tells the story, in 1973,
shortly before the gurus death, he told Dr.
Brilliant to take off the ashram whites and use
his skills as a physician to help eradicate
smallpox, which was devastating India at the time.
Dr. Brilliant joined a team of United Nations
workers who painstakingly worked their way
through India inoculating people against the
disease. In 1980, the World Health Organization
declared that smallpox had been eradicated.
In 1978, Dr. Brilliant started the Seva
Foundation, which focuses on preventing and
curing blindness throughout Asia and Latin
America. In 1985, Dr. Brilliant was a co-founder
of the Well, a seminal online community.
Throughout the 1990s and early 2000s, he ran
several high-tech companies in Silicon Valley.
Dr. Brilliant first heard about Google.org in
early 2005 while lying in bed in India, sick with
dysentery. He had gone there to work with the
polio eradication program of the United Nations
and, while recovering, he saw news of Google.org in a local newspaper.
He sent an inquiry to the only e-mail address he
could find: info@.... He got no response.
This year, Dr. Brilliant was awarded the TED
Prize, an award given at the annual Technology,
Entertainment and Design conference, a gathering
of leaders from the technology and entertainment
industries. The prize awards three recipients
$100,000, and a wish for how to change world.
Dr. Brilliants wish was for the creation of an
early detection, rapid response system for
disease outbreaks. The idea would be an
open-source, nongovernmental, public access
network for detecting, reporting and responding to pandemics.
Some Google insiders heard about the award and
invited Dr. Brilliant to give a talk at the
company. Mr. Page and Eric E. Schmidt, Googles
chief executive, were in the audience as Dr.
Brilliant described the polio eradication efforts
of the United Nations. They agreed they had found
their director and began to recruit him.
At first, Dr. Brilliant said, he was thrilled.
But then he turned skeptical, largely because of
the for-profit structure of the organization.
I got weak knees, he said. It was weird. It
was precedent setting. After several lengthy
conversations with executives at Google, Dr.
Brilliant changed his mind. Six months into the
job, he has traveled to India to visit eye
clinics and polio vaccination projects with Mr.
Page, and to China to discuss clean energy
alternatives. Next week, he leaves for Africa to
visit Google grant recipients in Ghana.
Dr. Brilliant said he had no desire to reinvent
the wheel by working on projects others are
already involved in. And although Google is a
high-tech company, that does not mean that
Google.org will be throwing around high-tech solutions.
Why would we put Wi-Fi in a place where what
they need is food and clean water? he said.
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Felix Kramer fkramer@...
Founder California Cars Initiative
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