Thursday, January 24, 2008

WSJ: Beyond Payday loans - clinton / schwarzenneger commentary



	January 24, 2008

COMMENTARY

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Beyond Payday Loans

By WILLIAM J. CLINTON and ARNOLD SCHWARZENEGGER
January 24, 2008; Page A17

The American dream is founded on the belief that people who work hard and play by the rules will be able to earn a good living, raise a family in comfort and retire with dignity.

But that dream is harder to achieve for millions of Americans because they spend too much of their hard-earned money on fees to cash their paychecks or pay off high-priced loans meant to carry them over until they get paid at work.

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the "unbanked" enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won't cost taxpayers a dime.

Imagine the economic and social benefits of putting more than $8 billion in the hands of low- and middle-income Americans. That is the amount millions of people now spend each year at check-cashing outlets, payday lenders and pawnshops on basic financial services that most Americans receive for free -- or very little cost -- at their local bank or credit union. Over a lifetime, the average full-time, unbanked worker will spend more than $40,000 just to turn his or her salary into cash.

Many nonbank customers are either leery of banks or believe they do not have the products they need. The result is that the market for basic financial services is booming. Today, the number of check cashers, payday lenders and pawnshops is more than double the number of McDonald's franchises in the United States. More than 20 million Americans cash more than $60 billion in checks each year at check-cashing businesses. Full-time workers without a checking account typically pay $40 on average to cash their paychecks. And payday lenders sell an additional $40 billion in expensive small-dollar loans each year that carry fees 30 times the average credit-card rate.

But these Americans can become bank customers if they have access to the right products at the right terms, and the support they need to make good, responsible financial decisions. People outside of the financial mainstream are the heart of America. The vast majority of people without bank accounts work, and they have an average household income of $27,000. Most are also married, have at least one child, and are employed by a small business.

And consider that, according to a new Brookings Institution report, as much as $360,000 in pre-tax wealth could be created if the average, full-time unbanked worker invested in the stock market what he will spend over his lifetime paying to cash his paychecks. That would allow one of those workers to finance about 25 years of retirement at his current standard of living.

This year, California will become the first state in the nation to launch an effort to help unbanked residents open starter accounts -- the first step into the financial mainstream. Approximately 11% of California households, including 25% of Latino and African-American households, do not have a checking account. And nearly half of households in the state don't have a savings account.

In coordination with the Federal Deposit Insurance Corporation, we will partner with financial institutions to increase the supply of starter accounts that work for unbanked consumers and banks. We will form regional coalitions of financial institutions, mayors and community groups to market accounts and help the unbanked build financial literacy. And we will build on work already being done in San Francisco, where city officials, working with banks and credit unions, have already signed up 11,000 individuals who previously had no checking or savings account.

The William J. Clinton Foundation's Economic Opportunity Initiative will help more people enter the financial mainstream by supporting the work of California -- as well as that of mayors in Boston, Los Angeles, Miami, New York, Providence, San Francisco, Savannah and Seattle, each of whom are spearheading their own efforts. It will also work to engage additional cities and states, and the private sector.

We need other leaders across the country in the public, private and nonprofit sectors to join this effort. Banks and credit unions can expand their efforts to broaden access to transaction accounts and alternatives to payday loans with terms attractive to the unbanked and underserved. They already have the storefronts to compete for this business: More than 90% of nonbank alternatives are located within one mile of a bank or credit union branch.

Employers can also help reduce the financial stress in workers' lives and boost workplace morale by helping employees to gain access to banking services, and to save and better manage their finances. Community-based organizations can work with the public and private sectors to help people access the trustworthy, high-quality money management support they may need to develop and sustain good personal financial practices.

By working together, we can improve the lives of millions of people, boost our economy, and strengthen our communities.

Mr. Clinton was the 42nd president of the United States. Mr. Schwarzenegger is governor of California.

	URL for this article: http://online.wsj.com/article/SB120113610711211855.html

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WSJ front page: Bill Gates Issues Call For Kinder Capitalism



	January 24, 2008

PAGE ONE

DOW JONES REPRINTS

Bill Gates Issues Call
For Kinder Capitalism

Famously Competitive,
Billionaire Now Urges
Business to Aid the Poor

By ROBERT A. GUTH
January 24, 2008; Page A1

Free enterprise has been good to Bill Gates. But today, the Microsoft Corp. chairman will call for a revision of capitalism.

In a speech at the World Economic Forum in Davos, Switzerland, the software tycoon plans to call for a "creative capitalism" that uses market forces to address poor-country needs that he feels are being ignored.

Outgoing Microsoft Chairman Bill Gates talks to The Journal's Rob Guth about his concept of creative capitalism. (Jan. 23, 2008)

"We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well," Mr. Gates will tell world leaders at the forum, according to a copy of the speech seen by The Wall Street Journal.

Mr. Gates isn't abandoning his belief in capitalism as the best economic system. But in an interview with the Journal last week at his Microsoft office in Redmond, Wash., Mr. Gates said that he has grown impatient with the shortcomings of capitalism. He said he has seen those failings first-hand on trips for Microsoft to places like the South African slum of Soweto, and discussed them with dozens of experts on disease and poverty. He has voraciously read about those failings in books that propose new approaches to narrowing the gap between rich and poor.

In particular, he said, he's troubled that advances in technology, health care and education tend to help the rich and bypass the poor. "The rate of improvement for the third that is better off is pretty rapid," he said. "The part that's unsatisfactory is for the bottom third -- two billion of six billion."

Three weeks ago, on a flight home from a New Zealand vacation, Mr. Gates took out a yellow pad of paper and listed ideas about why capitalism, while so good for so many, is failing much of the world. He refined those thoughts into the speech he will give today at the annual Davos conference of world leaders in business, politics and nonprofit organizations.

Among the fixes he plans to call for: Companies should create businesses that focus on building products and services for the poor. "Such a system would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces," he plans to say.

DAVOS 2008

Read updates² from the World Economic Forum in Davos, Switzerland, and see complete coverage³ of the annual event.

• Issue Briefing: Doubts Dog Davos⁴

Mr. Gates's Davos speech offers some insight into his goals as he prepares to retire in June from full-time work at Microsoft -- where he will remain chairman -- and focus on his philanthropy, the Bill & Melinda Gates Foundation.

Mr. Gates sees a role for himself spurring companies into action, he said in the interview. "The idea that you encourage companies to take their innovative thinkers and think about the most needy -- even beyond the market opportunities -- that's something that appropriately ought to be done," he said.

His thoughts on philanthropy are closely heeded because of the business success that made Mr. Gates one of the world's richest men. His eight-year-old charity is expanding rapidly following the 2006 decision by Warren Buffett to leave his fortune to the foundation. That donation, at the time valued at about $31 billion, increases to some $70 billion the hoard Mr. Gates says will be given away within 50 years of the deaths of him and his wife.

Serving the Poor

But Mr. Gates's argument for the potential profitability of serving the poor is certain to raise skepticism. "There's a lot of people at the bottom of the pyramid but the size of the transactions is so small it is not worth it for private business most of the time," says William Easterly, a New York University professor and former World Bank economist.

Others may point out that poverty became a priority for Mr. Gates only after he'd earned billions building Microsoft into a global giant.

Mr. Gates acknowledges that Microsoft early on was hardly a charity. "We weren't focused on the needs of the neediest," he said, "although low-cost personal computing certainly is a tool for drug discovery and things that have had this very pervasive effect, including the rise of the Internet," he said.

Although Microsoft has had an active philanthropic arm for two decades, only in 2006 did it start seriously experimenting with software in poorer counties in ways that would fit Mr. Gates's creative capitalism idea. Under that 2006 program, handled by about 180 Microsoft employees, the company offers stripped-down software and alternative ways of paying for PCs to poorer countries.

With today's speech, Mr. Gates adds his high-profile name to the ranks of those who argue that unfettered capitalism can't solve broad social problems. Muhammad Yunus, the Bangladeshi economist who won the 2006 Nobel Peace Prize for his work providing small loans to the poor, is traversing the U.S. this month promoting a new book that calls capitalism "half developed" because it focuses only on the profit-oriented side of human nature, not on the satisfaction derived from helping others.

Key to Mr. Gates's plan will be for businesses to dedicate their top people to poor issues -- an approach he feels is more powerful than traditional corporate donations and volunteer work. Governments should set policies and disburse funds to create financial incentives for businesses to improve the lives of the poor, he plans to say today. "If we can spend the early decades of the 21st century finding approaches that meet the needs of the poor in ways that generate profits for business, we will have found a sustainable way to reduce poverty in the world," Mr. Gates plans to say.

In the interview, Mr. Gates was emphatic that he's not calling for a fundamental change in how capitalism works. He cited Adam Smith, whose treatise, "The Wealth of Nations," lays out the rationale for the self-interest that drives capitalism and companies like Microsoft. That shouldn't change, "one iota," Mr. Gates said.

But there's more to Adam Smith, he added. "This was written before 'Wealth of Nations,'" Mr. Gates said, flipping through a copy of Adam Smith's 1759 book, "The Theory of Moral Sentiments." It argues that humans gain pleasure from taking an interest in the "fortunes of others." Mr. Gates will quote from that book in his speech today.

Talk of "moral sentiments" may seem surprising from a man whose competitive drive is so fierce that it drew legal challenges from antitrust authorities. But Mr. Gates said his thinking about capitalism has been evolving for years. He outlined part of his evolution from software titan to philanthropist in a speech last June to Harvard's graduating class, recounting how when he left Harvard in 1975 he knew little of the inequities in the world. A range of experiences including trips to Africa and India have helped raise that awareness.

In the Harvard speech, Mr. Gates floated the idea of "creative capitalism." But at the time he had only a "fuzzy" sense of what he meant. To clarify his thinking, he decided to prepare the Davos speech.

On Jan. 1, following a family vacation, Mr. Gates boarded a commercial flight in Auckland, New Zealand, and during the 21-hour, two-layover journey back to Seattle he started writing his speech.

The Sword Swallower

He drew from influences ranging from the leading thinkers on capitalism and a sword-swallowing Swedish health expert to Norman Borlaug, the plant pathologist who won the 1970 Nobel Peace Prize for his role in the Green Revolution that boosted food production. A long talk with his wife, Melinda, in the first week of January also helped shape the speech, said Mr. Gates.

In setting up his foundation in 2000, Mr. Gates understood that widespread criticism existed of programs to help the poor. U.S. aid had often been motivated by broader Cold War goals and often had failed to advance living conditions for the world's poor. Successful programs, such as the Green Revolution, were overshadowed by growing awareness of their negative side effects on the environment and local cultures.

ON GATES'S BOOKSHELF

"The Theory of Moral Sentiments" -- This 1759 book by Scottish philosopher Adam Smith arguing that humans are born with a moral sense and can derive happiness from the "fortunes of others."

"The White Man's Burden" -- By former World Bank economist William Easterly, this 2006 book lays bare the failings of five decades of international aid.

"The Fortune at the Bottom of the Pyramid" -- Michigan University professor C.K. Prahalad made a case in this 2004 book for businesses to view the world's poor as a viable consumer market.

"The Bottom Billion" -- In this 2007 book former World Bank director Paul Collier contends that the gap in living standards is widening between the poorest fifty countries and the rest of the world.

Source: WSJ research

Meanwhile, companies including Microsoft had donated huge amounts of cash and products to developing countries without seeking to create sustainable growth. Free Microsoft software in some countries spawned broad usage of computers, while in "other places you announce a big free software grant, come back a few years later, nothing," Mr. Gates said.

His growing awareness of such limits sparked new ideas on how businesses could approach poor countries. At a dinner near Seattle in 2004, Mr. Gates met one of the leading thinkers on that front, C.K. Prahalad, a University of Michigan professor who had written "The Fortune at the Bottom of the Pyramid." In that article and a subsequent book by the same title, Mr. Prahalad proposed that the world's four billion poorest people represented a huge market for companies willing to try.

Other books influencing Mr. Gates included "The Mystery of Capital" and "Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity" and "The Bottom Billion." This reading helped inform Mr. Gates's belief that leading companies should find ways to sell to and work with the poorest. "You have people who are inciting companies to say, 'Look, this is a lot of people,'" Mr. Gates said.

Mr. Gates in his speech will note several programs that "stretch the reach of market forces," including a World Health Organization venture with an Indian vaccine maker to sell a meningitis vaccine in Africa for far less than existing vaccines. He will also highlight a new program designed to give African coffee farmers better access to coffee buyers in rich counties. "We don't need some dramatic big new tax or requirement," Mr. Gates said in the interview. "What we need is the recognition of the creativity here that some of the leaders are exercising."

To a degree, Mr. Gates's speech is an answer to critics of rich-country efforts to help the poor. One perennial critic is Mr. Easterly, the New York University professor, whose 2006 book, "The White Man's Burden," found little evidence of benefit from the $2.3 trillion given in foreign aid over the past five decades.

Mr. Gates said he hated the book. His feelings surfaced in January 2007 during a Davos panel discussion with Mr. Easterly, Liberian President Ellen Johnson Sirleaf and then-World Bank chief Paul Wolfowitz. To a packed room of Davos attendees, Mr. Easterly noted that all the aid given to Africa over the years has failed to stimulate economic growth on the continent. Mr. Gates, his voice rising, snapped back that there are measures of success other than economic growth -- such as rising literacy rates or lives saved through smallpox vaccines. "I don't promise that when a kid lives it will cause a GNP increase," he quipped. "I think life has value."

Brushing off Mr. Gates's comments, Mr. Easterly responds, "The vested interests in aid are so powerful they resist change and they ignore criticism. It is so good to try to help the poor but there is this feeling that [philanthropists] should be immune from criticism."

Belief in Technology

A core belief of Mr. Gates is that technology can erase problems that seem intractable. That belief was deepened, Mr. Gates says, by his study of Julian Simon, a now-deceased business professor who argued that increases in wealth and technology would offset shortages in energy, food and other global resources.

Pacing in his office last week, Mr. Gates retold the story of a famous $10,000 wager between Mr. Simon and Paul Ehrlich, a Stanford University professor who predicted that human population growth would outstrip the earth's resources. Mr. Simon bet that even as a growing population increased demand for metals such as tin and copper, the price of those metals would fall within the decade ending in 1990. Mr. Simon won the bet. "He cremated the guy," says Mr. Gates. Mr. Ehrlich's administrator at Stanford University said he was out of the country and couldn't comment on the wager.

In early 2006, Mr. Gates found further evidence of an improving world in the online video of Hans Rosling, a Swedish professor of international health. In the video, Prof. Rosling used an enormous animated graph to show that in the previous four decades life expectancy and family size in developing countries had come to approach the levels of developed countries.

The video so inspired Mr. Gates that he bought dozens of copies of Prof. Rosling's textbook on global health. Watching Prof. Rosling's most recent video last year, Mr. Gates saw the professor end his talk about improving global health by swallowing a Swedish army bayonet, "to prove that the seemingly impossible is possible," the professor said.

The influence of such optimists will be woven into Mr. Gates's comments today. "In the coming decades we will have astonishing new abilities to diagnose illness, heal disease, educate the world's children, create opportunities for the poor and harness the world's brightest minds to solve our most difficult problems," he will say.

Describing himself as an "impatient optimist," Mr. Gates said he will ask each of his Davos listeners to take up a "creative capitalism" project in the coming year.

And he vows to keep prodding them. "I definitely see, once I'm full time at the foundation, reaching out to various industries -- going to cellphone companies, banks and more pharma companies -- and talking about how...they can do these things," he said.

Write to Robert A. Guth at rob.guth@wsj.com⁵

	URL for this article: http://online.wsj.com/article/SB120113473219511791.html
	Hyperlinks in this Article: (1) http://blogs.wsj.com/davos/ (2) http://blogs.wsj.com/davos/ (3) http://online.wsj.com/page/2_1351.html (4) http://online.wsj.com/public/resources/documents/info-frmiss-080121-davos.html (5) mailto:rob.guth@wsj.com

Tuesday, January 22, 2008

Fed slashes rates

By David Lawder2 hours, 58 minutes ago

The Federal Reserve on Tuesday slashed a key interest rate by a hefty three-quarters of a percentage point, the biggest cut in more than 23 years, after a two-day global stocks rout sparked by fears of a U.S. recession.

The move, a rare one made between the U.S. central bank's regularly scheduled meetings, took the federal funds rate governing overnight lending between banks down to 3.5 percent, its lowest level since September 2005. The Fed also lowered the discount rate it charges on direct loans to banks to 4 percent.

"The Fed is very, very, very worried," said John Tierney, an analyst at Deutsche Bank in New York.

The Fed's bold bid failed to instill confidence in shaken financial markets as U.S. stocks, playing catch-up with sell-offs around the world, fell sharply at the open. The Dow Jones industrial average (.DJI) was down about 1.1 percent in late morning.

Prices for U.S. government bonds slipped, while the dollar fell sharply against the euro.

"The committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth," the Fed said, referring to its policy-setting Federal Open Market Committee.

"While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households," it said.

Some analysts viewed the Fed's surprise move, which came just a week ahead of its next regularly scheduled meeting on January 29-30, as a timely and much-needed effort to shore-up deteriorating confidence in global markets. Others said it signaled a sense of desperation.

"Plainly the Fed realized that to try to stay ahead of the market they had to act immediately. That is the positive reading of the action," said Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut. "The negative viewpoint is that it smacks of panic."

Shortly after the Fed announced it was lowering U.S. interest rates, the Bank of Canada cut its key overnight interest rate by a quarter percentage point to 4 percent and said further cuts were likely to be needed.

MORE U.S. RATE CUTS?

Even after the Fed's move, interest-rate futures markets showed a 74 percent chance of another half-percentage point reduction in U.S. rates next week. They also pointed to a federal funds rate of 2.25 percent by mid-year.

The Fed rarely lowers borrowing costs in between scheduled meetings, but stock markets around the globe had sold off heavily this week, posing another challenge to an economy already struggling under the weight of a deep housing slump and tight credit conditions.

"Appreciable downside risks to growth remain," the Fed said, adding that it would "continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks."

The central bank said incoming data "indicates a deepening of the housing contraction as well as some softening in labor markets."

The rate cut was the first in between regularly scheduled Fed meetings since September 17, 2001, the first day U.S. financial markets reopened after the September 11 terror attacks.

The last time the Fed took actions that reduced the federal funds rate by at least three-quarters of a point was in October 1984. However, it only began to set an explicit federal funds rate target as its primary lever to influence the economy around 1990.

Prior to that, it had used the discount rate to signal its policy stance. It had cut the discount rate by a full point in December 1991.

FW: Google Offers a Map for Its Philanthropy

From: Clark, Allison
Sent: Thursday, January 17, 2008 10:45 AM
To: HCD Program Officers
Subject: Google Offers a Map for Its Philanthropy

January 18, 2008

Google Offers a Map for Its Philanthropy

By HARRIET RUBIN

Google announced Thursday that it had come up with a plan that begins to fulfill the pledge it made to investors when it went public nearly four years ago to reserve 1 percent of its profit and equity to "make the world a better place."

The philanthropy the company has set up — Google.org, or DotOrg as Googlers call it — will spend up to $175 million in its first round of grants and investments over the next three years, Google officials said. While it is like other companies' foundations in making grants, it will also be untraditional in making for-profit investments, encouraging Google employees to participate directly and lobbying public officials for changes in policies, company officials said.

DotOrg officials said they had decided to spend the money on five initiatives: disease and disaster prevention; improving the flow of information to hold governments accountable in community services; helping small and medium-size enterprises; developing renewable energy sources that are cheaper than coal; and investing in the commercialization of plug-in vehicles.

Google may be one of America's 10 richest corporations as measured by market value, but its budget for philanthropy is minuscule compared with the $70 billion of the Bill and Melinda Gates Foundation.

Still, Google's founders, Sergey Brin and Larry Page, expressed a hope back in 2004 that "someday this institution may eclipse Google itself in terms of overall world impact." What it lacks in size, though, Google.org may make up in cachet.

Larry Brilliant, a medical doctor who took on the role of director of Google.org 18 months ago, said he could not even begin to count how many spending proposals he had seen. "There are 6.5 billion people in the world," Dr. Brilliant said in a recent interview, "and in the last 18 months I've met 6.4 billion, all of whom want, if not some of our money, then some of the Google pixie dust."

Dr. Brilliant, who moved to an ashram in northern India in the 1970s and went on to play a major role in eradicating smallpox in the country, likened his moral quandary in figuring out how to spend Google.org's money to that faced by a saint wandering the streets of Benares.

"There are 500 steps between the road and the Ganges," he said. "On every step are beggars, lepers, people who have no arms or legs, people literally starving. The saint has a couple of rupees; how does a good and honorable person make a resource allocation decision? Do you weigh a hand that's missing more than a leg? Someone who's starving versus a sick child? In a much less dramatic way, that's what the last 18 months have been for us."

DotOrg has focused on what it can do "uniquely," said Sheryl Sandberg, vice president for global online sales and operations at Google, who, like all employees, is permitted to spend 20 percent of her time at the foundation or in other charitable ventures. "If you do things other people could do, you're not adding value."

In contrast to DotOrg's close tie to DotCom, employees of Microsoft have made Bill Gates wealthy but have no official influence in how the Gates Foundation money is spent.

The only urgency imposed on the foundation is how soon it can live up to the expectations. "Building a new ecosystem is not an overnight phenomenon," Dr. Brilliant said. "Here at Google if you have a project, you press Send. We won't work that quickly."

But for all the enthusiasm for the new organization, there are critics. "It's wonderful that this company is devoting massive resources to fixing big world problems, but they are taking an engineer's perspective to them," said Siva Vaidhyanathan, a cultural historian and media scholar at the University of Virginia. "Machines and software are not always the answer. Global problems arise from how humans have undervalued each other and miscommunicated with each other."

He pointed to Google.org's decision not to take a step like financing scholarships for girls in India who have not had access to education. "That's what is so naïve about Google.org's approach," he said. "If you can educate a thousand girls in one state in India, you've already made a bigger difference than 99 percent of the human beings on earth because every one of those of girls can make a difference."

The process of determining what to finance was not easy, said Jacquelline Fuller, the head of advocacy at Google.org. Beginning in the spring of 2007, "the 20 team members had 20 ideas." Team members, she said, "debated, cried and held hands as we tried to determine what kind of difference we could make." It took them almost a year to winnow down the list.Although it was just announcing its initiatives on Thursday, Google.org has already begun to give away some of its money.

That is the case with grants for the first of its initiatives — what the philanthropy calls "predict and prevent." This effort focuses on strengthening early warning systems in countries around the world to detect a disease before it becomes pandemic, or a drought before it becomes a famine.

To attain that, DotOrg has made a grant of $5 million to a nonprofit group that Dr. Brilliant helped to set up, though it is independent from DotOrg. Called Instedd, for Innovative Support to Emergencies, Diseases and Disasters, the group seeks to improve data and communication networks. An additional $2.5 million has been awarded to the Global Health and Security Initiative to respond to biological threats in Thailand, Vietnam, Cambodia, Laos, Myanmar and China's Yunnan Province.

"In recent years," Dr. Brilliant said, "39 new communicable diseases with a potential to become pandemic have jumped species," including SARS, or severe acute respiratory syndrome; monkey pox and bird flu.

"What if we could have been there when the H.I.V. moved from animal to chimp to human and could have averted that risk?" he asked. "To prevent or abort or slow a pandemic saves tens of millions of lives."

The second initiative, called "the missing middle," refers to the missing middle class in Africa and South Asia and the missing middle level of financing between microcredits and hedge funds.

Microcredit funds currently provide families with three or four or five days of livelihood, Dr. Brilliant said. "But what can you do when your kid is sick and you can't work?" he said. "No country has ever emerged from poverty because of microcredit. Jobs make that possible. China did it with manufacturing, India did it with outsourced call centers."

To that end, DotOrg has awarded $3 million to TechnoServe to find worthy entrepreneurs and help them build credit records and get access to larger markets.

The third initiative, "information for all," is aimed at helping developing countries provide better government services by making information available on their efforts to improve health care, roads and electrification. "India has promised health care, work, and transparency throughout," Dr. Brilliant said. "Yet it's hard to do something like this on the scale that India is trying to do, to let people know what their entitlement is."

DotOrg has awarded $2 million to support the Annual Status of Education report in India to assess the quality of education; $765,000 to create a Budget Information Service to improve district-level planning, and $660,000 to build communities of researchers and policy makers to deliver information.

DotOrg decided to finance literacy information because, said Lant Pritchett, a DotOrg adviser who teaches economic development at the Kennedy School of Government at Harvard, "We're looking for things where Google could have a transformative impact. Ideas, flexibility, entrepreneurship are better than just cash on the table."

Google.org's fourth initiative supports the development of renewable energy sources that are cleaner and cheaper than coal. DotOrg has invested $10 million in eSolar, a company in Pasadena, Calif., that specializes in solar thermal power.

The philanthropy is also working to accelerate the commercialization of plug-in vehicles. Google, whose own computers and customers use plenty of energy, "does not want to be part of the problem; we want to be part of the solution," Dr. Brilliant said.

"We're not trying to bring returns to Google," Dr. Brilliant said. "Profits are vital to businesses that will support the missions."

Mark Dowie, author of the book "American Foundations," said DotOrg is part of "a new mode of philanthropy that is very similar to venture capitalism, holding those they fund responsible in ways never seen before." The danger, he said, "is that a lot of philanthropic work is not quantifiable. How do you qualify arts grant making, for example."

Still, he added, "what would be worse is for Google not to give away its money, but to hoard it."

Jerry's Links

Thursday, January 24, 2008

WSJ: Beyond Payday loans - clinton / schwarzenneger commentary

Beyond Payday Loans

WSJ front page: Bill Gates Issues Call For Kinder Capitalism

Bill Gates Issues Call
For Kinder Capitalism

Tuesday, January 22, 2008

Fed slashes rates

Fed slashes rates

FW: Google Offers a Map for Its Philanthropy

Google Offers a Map for Its Philanthropy

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