Charity pays

AN AMOUNT totaling 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 percent 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 – for instance, the Gates Foundation, which was last in the news in relation to Warren Buffett’s $31 billion donation – seems a positive trend.

Now Google, the leader among search engines, which is equally well-known for innovative albeit controversial services like Google Earth and Google Print, 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 about this project that wins our approval. 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 will be able to 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, many 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 the Third World are easy to conjure up, 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 highly skilled professionals with extensive education and hands-on experience in their fields of specialisation, which can range from watershed management to reproductive health to conflict prevention. It 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’.