Why charity and capitalism just can't mix

Why charity and capitalism just can't mix

Summary: When you're the Googles, Microsofts, HPs and IBMs of the business world, and generating billions of dollars in revenues a year, you'll probably feel a sense of duty to return some of the profits back to the community.

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TOPICS: Intel
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When you're the Googles, Microsofts, HPs and IBMs of the business world, and generating billions of dollars in revenues a year, you'll probably feel a sense of duty to return some of the profits back to the community.

Whether it involves efforts to reduce landfill or funding projects to investigate electronic waste in Africa, throwing a couple of million dollars here and there hardly makes a dent in the deep pockets of these large corporations, but can go a long way in helping to close the digital gap.

Charity certainly ain't a bad thing, especially when you consider stats which indicate that nearly 3 billion people in the world live on less than two dollars a day, and that the GDP of the globe's poorest 48 countries is lower than the fortunes of the world's three richest people combined.

However, despite even the best of intentions, charity and capitalism sometimes just shouldn't mix.

The One Laptop Per Child (OLPC) project was established with a noble goal: to put low-cost laptops in the hands of as many of the world's poorest children as possible.

It sought out and convinced some of the industry's biggest computing names, including Intel, AMD, Google and Red Hat, to join its cause.

But it soon became clear that all was not well, and a long-standing dispute with OLPC member Intel screeched to a climax when the chipmaker formally declared its departure from the project late last week.

A spate of "he said, she said" promptly ensued, with Intel charging that it ended the relationship because OLPC founder Nick Negroponte had insisted the chip giant stop manufacturing and selling its own low-cost offering, Classmate PC. Negroponte in turn, accused Intel of treating children as "a market", rather than a mission.

I have no doubt that Negroponte embarked on the OLPC initiative with the best intentions, and that he remains faithful to the project's fundamental goal. But, if Intel's allegations are anything to go by, the man clearly holds unrealistic expectations that the OLPC's powerful corporate members are willing to sacrifice capitalism for charity.

Intel cannot be faulted for thinking like a business, because it is ultimately a business--one that's answerable to its own stakeholders, and that needs to impress Wall Street analysts with stellar financial results, quarter after quarter.

Businesses are not charity organizations, at best, they are commercial do-gooders that still need to keep an eye out for any potential revenue-generating opportunity.

Would green IT generate the hype it enjoys today if companies had no cost benefits and rebates to gain from reducing energy consumption and buying eco-friendly products? Probably not.

I'm not saying that businesses should, therefore, refrain from participating in community service. I'm pretty sure there are still many charitable causes and initiatives out there that organizations can adopt, without having to worry about whether doing so would affect their bottom line.

But I am saying that charity and capitalism, sometimes, simply don't mix and shouldn't be allowed to mix, or the ones who suffer most are the ones who most need the aid.

IDC analyst Bryan Ma was absolutely right when he welcomed news about Intel's divorce from the OLPC: "The bickering...ended up as a distraction."

Rather than allow the matter to drag on for years, Intel should have left the second it realized it wasn't able to accept Negroponte's terms and allow the OLPC project to continue its mission without further friction.

It's hard enough to solve world poverty, so why should we allow commercial considerations to further complicate matters?

Topic: Intel

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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  • Intel, IBM, Microsoft an HP alone need not represent the capitalist voice and may not want to mix alluring profits (in order to satisfy the ever greedy Investors/Fin analysts/Lobbyists) with alms, but there are millions of other orgs across the capital world, who may want to contribute to good causes and tighten their bellies for doing so. Negroponte, I am sure will source what he wants from some other competing companies which too thrive in a a market driven Capitalist economy (who, at the same time more senistive to the larger needs of the society and thus acquit themesleves well where Corporate Social Responsibility demands are being made and heard in BoardRooms).

    It is these non-Marie Antoinettes who shared the cake and bread, survived in the long term and will too
    anonymous
  • Eileen, you raise some very very good points in this post. However could you also say that sometimes, 'company mergers don't always mix' or company strategies don't always work or joint ventures, new markets etc ... There are countless examples of how conventional business strategies just don't mix.

    I think there are different (and more complex) issues at play in the OLPC/Intel story. But I am more concerned about the notion that OLPC is a charitable initiative or wider social responsibility initiatives you write about are lumped under the charitable banner.

    You are right, companies should not engage in charitable activities however the initiatives you list are not about charity.

    http://h20325.www2.hp.com/blogs/apcommunity/
    anonymous