Microsoft's Software Philanthropy: The Goodwill Ploy

bethanie writes "The New York Times has printed a story concerning Microsoft's plans to 'significantly increase its donation of software to the nation's nonprofit organizations, to a level that may approach $1 billion annually in the next three to four years. ...But the increase has also drawn objections from developers of 'open source' programs (programs for which the source code is freely distributed). Those critics say they believe Microsoft is using a giveaway strategy to undercut the so-called free software movement in the potentially promising nonprofit market.' What do you think? Is it true philanthropy or just another tactic to assimilate everyone into the MS collective?"

Comments

Gates Foundation - Charity or Tatic?

[Michael's a Jerk!]

A good read is here

Re:Deductions, baby!

[tekunokurato]

Simpler answer from a business undergrad-

There are federal standards associated with tax writoffs of good donations to nonprofit firms that dictate that relatively small amounts, on a revenue basis, are tax deductible. Microsoft will be able to write off revenue from some, but not a very significant portion.

More importantly, I responded because dividends are NOT pre-tax, they are paid from after-tax retained earnings. This is a very basic accounting rule and is important in many financial issues, from capital structure to the potential elimination of US dividend taxation.

Why not?

[drgroove]

I work for a NPO. We already use Microsoft products - Windows 2000, Office 2000, and Exchange would be the major apps. Due to budgetary constraints, we've decided not to upgrade until the Windows/Office version after the Longhorn release in 2005 (whatever that release may be... ); we started setting aside money for that upgrade in 2001. Budget is the #1 thing on the minds of every executive/manager at an NPO.

FWIW, at an NPO, any $ used comes out of a donation from a charitable person, institution, or corporation, who probably envisioned their donated $ going toward the benefit of whatever community the NPO services; I doubt seriously that most people envision their dontations going straight to Bill Gates & Co. when they sign their names on the check, be it for AIDS research, building homes for the homeless, etc. If MS is willing to provide NPO's with or reduced cost software, the end benefit is that the NPO will have more funds available to help their constituencies.

Experience with Non-Profits

[ChaoticCoyote]

Oddly enough, I was involved in a discussion of this very topic today!

My mother is an office manager for a "Safety Council"; my wife is an administrator in the American Red Cross. I also worked for a compnay the designed a SQL Server-based databank for the Red Cross.

Both organizations are tied tightly to Microsoft, in part because of the freebies, and in part because of corporate culture. They'd be silly to turn down millions in free software, especially hwne it is the same software they already use.

Do I take the free (as in beer) software that I know, or the free (as in leberty) software that I'll need to retool and retrain my staff for? Add in data conversion and other factors to see why the non-profits drink the Microsoft beer.

I'd rather the Red Cross take free software from Microsoft than have them lay off disaster personnel so they can retrain and retool for "free" software. People don't give a flip about Linux-vs.-Microsoft when their house is spread across three counties.

As for non-profits being "lucrative" -- no organization that relies on donations is lucrative; non-profit means limited budgets.

That's not to say that Microsoft doesn't recognize the benefits of "giving." Perhaps someone at Microsoft gets a warm fuzzy feeling from donating software, and I'm certain that their accountants like the associated tax write-off. But I'm sure it hasn't been lost on Microsoft that giving software to non-profits is both good advertising and good training.

Is Microsoft being Machiavellian? Yes. Does it matter? Probably not.

Education baby!

[tshak]

I know most people don't study or have a clue about business on /., so let me challenge your conspiracy theory with, "No, MS can not get a tax writeoff for a $1000 Windows Server License", simply because a tax writeoff has to do with cost, not potential revenue.