Frugal Google

by Russ Roberts on September 18, 2006

in Charity

When Warren Buffett made his massive donation to the Gates Foundation, my father was perplexed. Why would a man who had spent his life understanding the power of the profit motive entrust his money to non-profits who might be more profligate? I suggested that perhaps he was trying to burnish his reputation, that his success as an investor was viewed by some as tawdry. By giving money to a charity, he would look like a nice person, regardless of the outcomes. People would judge him by his motives.

Google is taking a different path, as the New York Times reports:

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.

Google probably understands that as Milton Friedman points out, people spend their own money more carefully than they spend other people’s money.


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