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The Business of Giving

Exploring philanthropy, non-profits and socially motivated business, from the Gates Foundation to your donation. A fresh look at the economy of good intentions.

May 24, 2010 at 4:00 PM

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Young generation redefines culture of Microsoft philanthropy

Posted by Kristi Heim

Is Microsoft an incubator for social entrepreneurship?

Over the years, plenty of people have retired from the company to start a second career in philanthropy or to create new enterprises that address social issues.

Microsoft alumni have founded and supported more than 150 non-profit organizations and social ventures working around the world, according to its alumni foundation.

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Employee giving and company matching funds totaled almost $90 million last year (employee charitable donations and volunteer time are matched up to $12,000 a year).

Such support has moved well beyond a fringe benefit. To attract the next generation of employees, making a social mission part of the company's DNA has become a vital recruiting tool, said Lisa Brummel, senior vice president for human resources. (She's seated at far left with four employees active in philanthropy)

It's also something she sees as an advantage over competitors.

"There are certain companies that give their employees 20 percent time to spend internally to make the company better," she said, referring to Google. "And there are some companies that give their employees 20 percent time externally to make the world better."

Brummel spoke last week at a first ever Microsoft Accelerator Summit, a round table discussion with media and non-profits focused entirely on corporate citizenship. The participants ranged from an employee of less than two years to CEO Steve Ballmer.

"If you go to employees and say why do you work here.. at the end of the day people buy in and participate in their own mind in our vision and they want to make a difference in society," Ballmer said.

Employees are running non-profits of their own, including the Jolkona Foundation, Givology and CRY America. Xiang Li, a Microsoft product manager and co-founder of education non-profit Givology, said the prospect of making a difference is more important to her than a higher salary.

"The amount of effort I see our employees doing is quite remarkable," Ballmer said. "We want to make sure we enable and support and encourage that."

In fact, the new organizational model that a younger, globally connected workforce demands is one that blends social and commercial goals, and attracts talent with visionary leadership and social mission, Seattle author Rob Salkowitz writes in his book "Young World Rising."

One of the key questions for any company, though, is how to align doing well for society with its business goals.

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For Microsoft, areas where the two converge include health, science, education, workforce training and bridging the digital divide, Ballmer said.

In a project called PhotoDNA, for example, Microsoft researchers teamed up with Dartmouth College computer science professor Hany Farid to create a way to identify and filter out known images of child pornography from search engines, based on matching their digital fingerprints provided by law enforcement agencies.

Another project involved deploying 200 sensors throughout the Brazilian rainforest to measure temperature, water vapor and solar radiation, collecting data and designing systems to visualize the effects of climate change.

The Web site Microsoft Hohm helps people calculate their energy use and find ways to conserve, and it's planned in the future as a tool to help manage information about when and where to recharge electric vehicles.

The company's legacy of philanthropy took inspiration from Mary Gates, the mother of Microsoft co-founder Bill Gates and a leader of United Way. "It spread starting from Bill and his family to the company and it sort of became part of our culture," said Pamela Passman, corporate vice president and deputy general counsel (pictured above).

This year, the company ranked 14 on a list of the 100 best corporate citizens by Corporate Responsibility magazine, which evaluated performance on a range of issues such as environment, climate change, employee relations, human rights and philanthropy. Despite the generally favorable review, CR gave Microsoft a cautionary "yellow card" for its involvement in antitrust cases brought by the European Union and U.S. state governments.

Tim Cranton, associate general counsel who worked on the PhotoDNA project, described what he finds unique about the company's culture.

"Microsoft employees truly believe they can change the world with software, even sometimes in an arrogant way, but there is an abiding belief that we can change the world."

I wanted to understand what Ballmer thinks about the legacy of philanthropy in the company and what he plans to do with his own wealth.

"I don't start with what are we giving away but what are we trying to accomplish and what can we get done," he said.

Partnerships with NGOs around the world are key to that strategy, and they include groups such as NetHope, CARE, TechSoup and Goodwill Industries.

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On the question of his own philanthropy, Ballmer said he wants to be anonymous and private. "My own world's my own world, so I continue to treat it that way," he said.

While he supports the kind of giving Microsoft is doing, he sounded more pragmatic than visionary. "If you stack it up next to the world's problems, it's got to be money that ignites action."

So what impact are these efforts having on business and society?

For one thing, by investing in IT training programs for unskilled workers, the company gets a lot more feedback about how its products can be improved, said Akhtar Badshah, senior director of global community affairs.

Microsoft is investing significant resources in a program called Unlimited Potential, which combines technology, education and economic development to improve conditions for the billions of people at the middle and bottom of the global economy.

Like many high-tech heavyweights, the company is providing resources to seed its next markets.

"There is no guarantee that that any one high-tech company will benefit in a direct way," Salkowitz writes. Their investments could end up developing fertile markets for their competitors, but it's not worth the risk of standing by while others gain a foothold, he contends. Either way, the beneficiaries are local consumers, businesses and entrepreneurs.

Nalini Gangadharan, chair of the CAP Foundation, said IT training programs funded by corporate partners have helped raise the marriage age in parts of India where more than half of girls traditionally get married before the age of 15.

"Before, girls were sitting idle and married off," she said. "Today the girls are saying as long as it's safe and secure, they are able to hold jobs and have decision-making status in the family. That is one of best outcomes."

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