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CEO Larry Popelka’s latest Bloomberg Businessweek article on the Google Bus protests.
Google needs a lesson in local philanthropy
Google and other tech companies are under attack from San Francisco residents who feel these companies are responsible for many of the city’s problems and are apathetic about solving them. In protest, some residents have barricaded Google(GOOG) buses, confronted Google employees and staged sit-ins in front of their managers’ homes.
This should be a wake-up call to large corporations that have cut back community support, thinking it doesn’t matter. Over the past three decades, U.S. corporations have drastically curtailed charitable giving. In 1986 the average corporation donated the equivalent of 2.1% of its profits to charitable causes. By 2012, that number dropped to just 0.8%.
The tech sector is perhaps the biggest offender. One might expect the streets of San Francisco to be paved with gold from all of the wealthy companies in the area. Yet unlike other cities that have been gifted parks, schools or hospitals from local corporations, San Francisco has little or nothing to show from any of the big tech companies. In fact, the city government had to cut its services over the past five years due to budget shortfalls.
To make matters worse, some of these companies took money out of city coffers through aggressive negotiation. Twitter negotiated $56 million in tax breaks from San Francisco to support its expansion prior to its initial public offering. Oracle’s Larry Ellison-—the fifth wealthiest man in the world with a net worth of $50 billion–-convinced San Francisco to put up public funds to host his America’s Cup race (Ellison owns Oracle Team USA), costing the city $11.5 million after fundraising efforts fell short.
On the flip side, tech companies have created some clear problems for San Francisco residents. The influx of out-of-town tech workers sent rents skyrocketing. This in turn created a speculative real estate market, further driving up prices and rents, and driving out long-term residents…
Ironically, Google is one of the most philanthropic U.S. companies, donating over $1.1 billion to charitable causes in 2012, equaling 8.5% of its profits. The problem is that little if any of this money goes to solve local problems; most is targeted to world problems like hunger, disease and education in developing countries. Other tech companies are notably absent from philanthropic lists. Apple-–the most valuable company in the world-–was well-known under Steve Jobs’ leadership for not being a charitable donor…
[Click here to read the full article.]