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Business Insight: Corporate Giving

On giving: Technology companies focus on in-kind

By Louie-An Pilapil14 January 2013

Dell Innovation in Education Social Think Tank at the Massachusetts Institute of Technology's Computer Science and Artificial Intelligence Laboratory. Photo by: Dell's Official Flickr Page / CC BY-NC-SA

This article is produced and published by Devex Impact, a global initiative of Devex and USAID, that focuses on the intersection of business and global development and connects companies, organizations and professionals to the practical information they need to make an impact.

Corporate philanthropy or corporate social responsibility has traditionally been defined by monetary donations targeting a specific cause. In the fast-moving technology industry, however, the world’s largest companies have found other creative ways to make an impact. While continuing to give millions of dollars in grants to some long-term development projects, humanitarian assistance, and disaster relief, today top technology firms are donating more products–hardware and software–as well as their time and expertise to developing markets and the organizations that serve them.

More than ever, technology companies seem to realize that assisting lesser developed markets now can groom customers and build loyalty for tomorrow. The most obvious example of this shift is the technology industry’s support of education and youth empowerment programs through the donation of in-kind resources such as desktop computers, software packages, laptops, tablet computers and other gadgets to be used in schools. In other cases, the companies are awarding grants to reach underserved students and teachers, fund programs on innovation, and develop technologies that directly support disaster management and relief.

As the world’s leading technology companies and brands – almost ubiquitous in the developed world–increasingly move to emerging markets, we can expect more public disclosure of and inquiry into their charitable activity. Devex starts that conversation here by comparing the philanthropic giving of Google and Microsoft, as well as the top four personal computer manufacturers – Acer, Dell, Hewlett-Packard, and Lenovo–in the year 2011, the most recent data available at the time of writing.

One notable omission from this analysis is Apple. To date, the world’s most valuable company has kept its cards close to its chest when it comes to formally disclosing information on its philanthropic activities. While the late Apple founder Steve Jobs’ philanthropic interests and tendencies remain mostly a mystery, back in February 2012 technology websites reported that Apple Chief Executive Officer Tim Cook told employees in a private meeting that the company had given $50 million to Stanford University hospitals and donated $50 million to (Product)RED, a division of the ONE Campaign.

Google

What started as a university project for Stanford Ph.D. students Larry Page and Sergey Brin in 1996 is now a mammoth technology company that provides Internet-related products and services. With gross profits amounting to $7.6 billion in the third quarter of 2012, Google is undoubtedly one of the largest and most prevalent technology brands on the planet. In 2004, Google announced the establishment of Google.org, the company’s not-for-profit philanthropic arm, with the company donating 1 percent of both profit and equity to the new organization. In 2011, Google.org donated $14.7 million to science and technology education, $11.5 million to fighting slavery, $9.8 million to using technology to solve problems and $3.9 million to girls’ education, according to the New York Times. That year, Google’s cash contributions amounted to $115 million while its in-kind giving was estimated at $1 billion, with recipients including the academe and nonprofit organizations. 

Microsoft

Microsoft is one of the most recognized and valuable companies in the world. Founded by Bill Gates and Paul Allen in 1975, this global technology leader provides software, services and solutions for various personal and business computing requirements. In 2011, Microsoft was named the top company in terms of software revenue after posting an income of $54.2 billion in software sales. The technology giant continues to be dominant in the PC operating system and office suite markets. In fiscal 2012, Microsoft donated $946 million in cash and software to nonprofits globally, with $844 million of that amount spent for software contributions to 46,866 nongovernmental organizations in 120 countries. The company also includes technology training to its list of contributions. Through the YouthSpark initiative, Microsoft supports youth-focused NGOs and advances youth empowerment through technology and education. It also aims to give people in developing countries access to modern educational and teaching tools through partnerships with governments and NGOs around the world.

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Acer Group

With sales of 8.6 million units, Acer Group was ranked the fourth-largest manufacturer of personal computers in the third quarter of 2012 by research firms Gartner and IDC. The technology giant, which began in 1976 as a small firm with 11 employees in Taiwan, now has four major brands that target different segments of the market. In 2011, Acer and Acer Foundation’s donations were valued NT$220.85 million ($7.5 million), 75 percent of which were in-kind. Acer’s philanthropic activities for that year were focused on education. Disaster relief and environmental conservation also figure in Acer’s global giving. Among the corporation’s notable projects are Acer for Education – which leverages its information and communications technology expertise to connect schools and facilitate educational objectives in Eastern Europe, the Middle East and Africa – and the Acer-European Schoolnet Educational Netbook Pilot Project, which reached 59 schools in six European countries between 2010 and 2011. An extension of the netbook project – this time using tablet computers – is in the planning stage, according to the company’s annual report.

Dell Inc.

Michael Dell was 19 years old when he founded PC’s Limited in 1984. His small startup has since been renamed Dell Inc. and become the third-largest maker of personal computers in the third quarter of 2012. One of the world’s top PC brands, Dell held a 10.5 percent share of the market with 9.2 million units sold as of October 2012. For fiscal 2012, the company achieved its goal of allotting 1 percent of its pre-tax profits to philanthropy. Dell focuses on providing technological support in combatting children’s cancer, closing the technology gap in education through its Youth Learning initiatives, and advancing social entrepreneurship via the Dell Social Innovation Challenge, which offers cash prizes to university students with innovative social-impact ideas. Out of the company’s total giving of $44 million in 2011, $33.3 million was in cash and the rest in-kind. Dell’s next steps in philanthropy include adding new partners in children’s cancer care initiatives that will receive funding, technology and volunteer support, assist more students in idea creation through access to mentoring and additional cash awards, and continue its relationship with the American Red Cross in employing technology in disaster preparedness and relief, according to Dell’s annual report.  

Hewlett-Packard

This global technology giant, which manufactured and sold the second highest number of PCs in the third quarter of 2012 according to Gartner, started in 1939 through a partnership between Stanford students Bill Hewlett and Dave Packard, who flipped a coin to decide whose last name would go first in what would be one of the iconic brands in technology. HP’s Office of Social Innovation focuses largely on education, entrepreneurship, and health. Apart from cash donations and the provision of products and services, the corporation’s philanthropic contributions include the use of its technological expertise to assist nongovernmental organizations address their logistical and operational needs. The Palo Alto-based multinational corporation placed first on Corporate Responsibility Magazine’s 100 Best Corporate Citizens List in 2010 for its efforts in the areas of environmental conservation, climate change and corporate philanthropy. In 2011, HP’s total cash giving amounted to $20.3 million while in-kind giving is valued at $31.2 million.

Lenovo

The Lenovo brand did not exist until 2004 but the company that built it was established in 1984, when Legend Holdings was founded in China. The company would grow to become a dominant global player in the competitive PC industry, beating out the likes of HP in sales on the third quarter of 2012. With 13.8 million units shipped, Lenovo has 15.7 percent of market share and was named the top manufacturer of PCs in Gartner’s latest findings. Lenovo’s corporate giving, while already in existence for quite some time, is just now taking shape, as signaled by the appointment of Senior Vice President Peter Hortensius as chief sustainability executive in charge of initiatives on corporate social responsibility. Lenovo commits 1 percent of its pre-tax income to philanthropic programs, one of which is the Next Generation Hope Fund that provides cash and product donations and expertise to a range of projects. Education, research, entrepreneurship, disaster relief and regional community outreach are the areas benefiting from Lenovo’s support. 

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About the author

Louie an pilapil 400x400
Louie-An Pilapil

Louie-An is a senior development analyst at Devex Manila. She creates content for the Devex website which analyzes development business trends and provides insights into development business opportunities in the form of blogs and special analysis or insight articles. She has held consulting and editorial positions at the Asian Development Bank in Manila and a business-to-business media company in Hong Kong and mainland China.


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