E-philanthropy: More than meets the eye?

Should e-philanthropy be as off-limits to criticism as motherhood and apple pie?
Written by Mary Jo Foley, Senior Contributing Editor on
Can there be such a thing as too much philanthropy -- especially when the donors are high-tech multi-millionaires and their ilk?

High-tech entities seemingly are giving back like never before, by creating foundations, pouring part of their profits into charitable organizations and boosting volunteerism among their employees. More and more charitable and fundraising malls are setting up portals on the Web, a trend some have characterized as e-philanthropy. (Just when you thought there couldn’t possibly be any more ridiculous new e-words...)

On the surface, I heartily applaud these companies and CEOs, especially because many of them are funding causes near and dear to my heart. How can you bash a company -- even Microsoft -- for making a multi-million-dollar donation to the Boys & Girls Clubs of America to help combat the Digital Divide? Chairman Gates is slated to announce its Digital Divide gift, which the company is calling one of the biggest corporate donations in Microsoft's history, on Monday.

But being the cynical journalist I am, I can't help but wonder whether some companies are hiding behind their philanthropic efforts. Could high-tech firms be using good causes to deflect attention from other potential trouble spots in their bottom lines and/or business strategies?

It's tough to speculate on, much less to prove, what motivates companies to step up their charitable giving. Which came first: The increasingly generous grants made in the areas of education and health by the Bill & Melinda Gates Foundation, or the increasing number of bad press clips generated by the Department of Justice vs. Microsoft antitrust trial?

Microsoft's not the only target of my rant. A number of high-tech companies' press releases on the emergence of their corporate consciences stray blatantly into the land of one-upsmanship.

In mid-October, for example, streaming-media vendor RealNetworks announced that its newly minted foundation plans to donate five percent of profits per quarter to various philanthropic projects. RealNetworks crowed that this amount would catapult the company to a slot near the top of all American corporations in terms of corporate giving.

Salesforce-automation vendor Salesforce.com created its philanthropic foundation a year ago. To mark the occasion of the launch of the foundation, company officials stated that "Salesforce.com is the first Internet company of its kind to institutionalize philanthropy by donating a percentage of shares to a foundation dedicated to closing the digital divide."

Other high-tech entities have been more blatant in seeking positive coverage. E-commerce software vendor Propel Software, for example, received a slew of press coverage, all focusing on the company's promised commitment to philanthropy, since its founder, former Infoseek CEO Steve Kirsch, launched the company a year ago. But to date, the company refuses to go public with any details on what it will sell or when it will sell it.

There are some words of wisdom on Propel's Website: "In the new economy, companies will be evaluated not only on the execution of their business plan but also on their ability to build a sustainable and meaningful venture," which will focus on giving back to the community.

As more high-tech companies publicly pony up, many good organizations and causes stand to benefit. But we shouldn't allow companies' donations to deter us from continuing to ask the hard questions about their products and businesses.

What's your take? Are high-tech companies putting their money in the right places? Or do you have your own wish-list, like my MSNBC colleague Brock Meeks, outlining some very different priorities you'd like to see high-tech companies get behind? TalkBack below and let me know what you think.

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