Alphabet Donated Its Employees' Holiday Gifts To Charity (fortune.com)

The employee perks at Google are legendary, and they've always included an over-the-top holiday gift for every employee. In the past, the company has surprised its 70,000 employees with Nexus phones, Android smartwatches, and Chromebooks. Fortune adds:This year employees speculated they might get Google's new Pixel phones or a Google Home unit, the company's competitor to Amazon's Echo. But they forgot: They don't work for Google anymore. They work for Alphabet. Instead of a shiny new gadget, Alphabet employees got an email. On Thursday Bloomberg published a bruising story about the new, cost-conscious regime of Alphabet, driven by its corporate re-organization and its ex-Wall Street CFO, Ruth Porat. Shortly after the story hit, employees were informed that their holiday gift this year was a donation to charity, Fortune has learned. Alphabet donated $30 million worth of Chromebooks, phones, and associated tech support to schools on its employees' behalf.

Comments

The human fund

[Ryanrule]

Money for people.

Re:The human fund

[Anonymous Coward]

Their bonuses were gifted to "charity" aka, the shareholders...

Re:The human fund

[cayenne8]

Man...this seems to happen to ALL "cool" companies.

They start out often quite employee centric....sure you work hard, but they give you lots of perks at work, free food drinks, kitchens, parties on and off campus...even keggers....

And then..they get a bit too big, the owners cede management to more managerial types, who count pennies but don't know the worth of a HAPPY EMPLOYEE....and then well, the fun and perks start to disappear, and soon....it is like any other boring job, and those little extras that build team work, or make you feel 'ok' about working a few extra hours to get something out the door, *vanish*.

At that point, unless the pay is insanely good...no real reason to stay or show any type of loyalty whatsoever.

The soul of the company is gone.

Re: The human fund

[Anonymous Coward]

For next Christmas they will get to train their H1B replacements.

Re: The human fund

[harrkev]

For next Christmas they will get to train their H1B replacements.

That is at least two or three years down the road.

Next year is the "Jelly of the Month Club."

The Honeymoon is over I guess?

[r2rknot]

So, get to work. waddah think we are running here? A charity?!

Re:The Honeymoon is over I guess?

[davide marney]

The exact same thing happened to me when I worked for one of the Big Six accounting firms. We HATED it, and as it turned out, it was a harbinger of things to come. Prior to that date, we had nice corporate social events held in nice places where we all dressed up. Afterwards, it was beer and pretzels, or no social event at all. It means that the bean counters are in control, and it's no longer going to be a fun place to work.

Re:The Honeymoon is over I guess?

[Dread_ed]

They wanted the tax deduction and the good press. Dicks.

Re:The Honeymoon is over I guess?

[SpiritualRemains]

To be fair, I would have expected the bean counters to be in control of an accounting firm to start with.

So do the employees get to write that off?

[Anonymous Coward]

If I can't write a donation off on my taxes, then I didn't donate it. Fuck you Google.

Re: So do the employees get to write that off?

[Anonymous Coward]

But it wasn't the employees present, because they can't write it off.

This is essentially the same as "There will be no Christmas bonus for low level employees, because the CEO was allowed to keep his 12 MILLION bonus. Also, in unrelated news, we gave some schools Google products, as we always do."

Re:So do the employees get to write that off?

[Anonymous Coward]

That doesn't make a difference, and in fact, counterintuitively, the benefit works the opposite way of what you are thinking.

If you already surpass the standard deductions, then if you received the gift and passed it to charity, you'd pay taxes on $X of income (at your marginal rate), and then get a deduction of $X of income (at your marginal rate). Nothing has changed

On the other hand, if you previously were going to take the standard deduction, then getting the gift and writing it off actually COSTS you money. You have to realize the people taking the standard deduction are essentially already getting a tax deduction of more money than they deserve. Any additional deduction amount that it takes to get them up to the full amount of the standard deduction is essentially wasted. So lets say your itemized deductions are $1000 short of the standard deduction. You get to take the standard deduction and get full credit as if you had the full amount as your itemized deductions. So now lets add a $3000 gift to your income, which you subsequently pass along to charity. You receive the $3000 gift and are taxed on the full $3000. But when you go to add it to your itemized deductions, the first $1000 of the deduction is just to bring you up to what you were already getting anyway via the standard deduction. So the only additional deduction you get is on the extra $2000 that exceeded the standard deduction. Thus you are taxed on $3k but essentially only get a deduction for $2k. Thus you are worse off than if the gift were passed directly to charity.

And finally, worst off would be the people who receive the gift, pass it along to charity, and STILL don't surpass the standard deduction. They get taxed on the whole thing, but don't get to take advantage of ANY of the tax deduction.

Re:So do the employees get to write that off?

[skegg]

In my understanding, the below are 4 general scenarios listed in decreasing order of benefit to the employee:

Scenario 1: You're given a Pixel phone, no tax burden on employee.
In some scenarios, the employer may pay any tax on the value of the gift.
You benefit the full value of the gift ... $700 US.

Scenario 2: You're given a Pixel phone, employee pays tax on the value of the gift.
You benefit $400 US (let's assume you paid $300 tax on the value of the gift).

Scenario 3: Pixel phone donated to registered charity, donation is in the name of the employee
Employee gets to deduct the tax component from their salary. In reality it may not be this "clean" as tax may vary across employees
You benefit $300.

Scenario 4: Pixel phone donated to registered charity, donation made in the name of the employer
Employer claims the tax deduction.
You benefit $0.

Google / Alphabet appears to have chosen Scenario 4.
Caveats:
    I am not a tax lawyer!
    My understanding of tax law is based on the Australian environment. Other tax jurisdictions may throw these numbers off, wildly.
    Excludes non-financial factors e.g. warm fuzzy feelings.

Anyone who knows better is welcome to chime-in! I'd be curious to know of significantly different tax rules in other countries.

Re:So do the employees get to write that off?

[omnichad]

Scenario #3 is not possible. You can put the employee's name on it, but unless the employee owned the phone, they didn't give it (legally speaking). You could technically gift the employee the phone and then ship it to the charity instead. In that case, the employee would owe tax on the phone, which would then be cancelled out by giving it to charity. Effectively, Scenario #3 and 4 is the same, except #3 would have some crazy paperwork involved. Because in scenario #3, the employer would claim a tax deduction on giving you the phone to give to the charity.

CEO Gift

[110010001000]

P.S. The CEO got a $12 million Christmas bonus and kept it all.

We can afford to give away $30 Million

[PMuse]

We just didn't want to give it to you.

Re:A phone is over the top?

[fahrbot-bot]

It actually seems like a pretty reasonable employee gift to me.

It's weird of them to not give their employees some of their own products though, make employees happy, and get people talking about the stuff.

Remember... Working for Google is the greatest gift of all.

Re:Headline correct; summary wrong

[Nemyst]

Alphabet is not so poor that their charitable deeds must go through taking a chunk off their employees' salary. If it mattered that much to the execs, why don't they cut their own salaries for the year to cover it up? They wouldn't even have to slash it by that much to cover the 30M.

The intent of this twisting of words is clear: to make it socially unacceptable to complain about it. It's utter bullshit.

Re:Headline correct; summary wrong

[King_TJ]

I'm glad Alphabet decided to help out by donating .... but if I worked for them, I'd still be a little upset by this.

#1? These donations of millions of dollars worth of technology to help schools/education don't exactly have a great track record. When your teachers and staff are underpaid and over-stressed, they're just not going to take the time and effort required to implement the new tech very well. A lot of this stuff will wind up sitting in schools, unused -- or under-utilized. $30 million given to help hire more quality teachers and keep up with maintenance issues in the school buildings would probably have done a lot more.

#2? It's not necessarily being "spoiled and greedy" to assume that your employer will give you a "bonus" or gift at the end of the year, if they're traditionally known for doing it. That's part of how your overall compensation is factored. (EG. When I was hired on where I work now, I tried to negotiate for a higher salary than they offered but they wouldn't budge. Instead, they countered that they almost always gave out end of year bonuses, plus typically did at least one big company meeting/trip to a nice location for several days, where we'd enjoy a lot of perks and entertainment too. Those were bargaining chips to make me take the offer ... not truly gifts that I would be "greedy" to expect to receive, if I did good work through the whole year.)

VMWare actually gave us money to donate

[Arkham]

VMware sent out an email to employees and said "There is $$$ in your http://brightfunds.org/ account. Give it to whatever charity you care about". And the employees do get the tax write-off.

Re:Write off

[sexconker]

https://www.irs.gov/businesses...

If Alphabet is actually donating shit in the employee's names, then the employee can deduct it.
Alphabet pays the tax on the gift to the employee (see the link). The employee donates the gift and deducts it.

The fact that the employee never received the gift directly doesn't matter. All that matters is whether or not Alphabet is donating on its employee's behalf, as stated in the summary, or if it's donating in its own name.

The giver (Alphabet) pays the gift tax, not the recipient (the employee). The donor (the employee) gets to deduct it.

Re:The best way to take over a computer market

[ghoul]

Its even worse. Out here in Cupertino the Schools have a program where every kid has to have an iPad as homework will be assigned through an iPad. No choice or option for using another platform. The first year Apple donated the iPads .Once the teachers got used to using it now its the parents can buy their own, buy one from the school at a discounted price or if you are really really cant afford an ipad the School will lend out last years iPads. Guess how many parents told their kids no you cant have the shiny new one like all your classmates and should use the older school issued one.
Apple donated for one year and now has a yearly revenue stream. You dont even have to wait till they grow up

Christmas bonus for talent poachers

[WaffleMonster]

You just don't do something like this.

EVERYONE knows this is a tax write-off even if you honestly didn't intend it to be that way it is how it will universally be interpreted.

If you didn't want to give Christmas bonus simply not giving them to people may be a disappointment but pulling this shit is far worse. It is essentially telling your employees to go fuck themselves while announcing they will not be receiving a bonus.

Given current labor environment whoever made this decision to announce donations like this should probably be asked to resign.

this is not a gift for employees

[j2.718ff]

The person doing the "giving" (Alphabet) gets the tax write-off, so the employees got absolutely nothing. Alphabet is in no way required to give their employees gifts, and I think it would have been better if they didn't. This is just an failed attempt at good PR. I'm happy Alphabet is donating to charity - they just shouldn't be pretending they're doing it for their employees.

Re:Good for Alphabet!

[thegarbz]

something socially responsible

Screw the workers by not giving them something that they usually get. Check
Make a massive donation to gain a huge tax write off when you already pay next to no taxes. Check.
CEO takes a bonus likely equal to the after tax donation that was made for saving money and screwing employees at the same time. Check.

Get either shills or complete idiot's support on Slashdot for actions. Social responsibility at its best.

Re:So many people don't understand tax deductions

[Obfuscant]

So it doesn't matter whether the company or the employee gets the deduction - it works out the same either way

It isn't the same. It can matter alot.

First, the company is picking the charity, not you. For example, someone impacted by breast cancer may want to donate to a charity related to that instead of handing more money to schools. I know at least two dozen charities that are more appropriate than throwing more money to my local school district which has already gotten a tax levy to spend $1.2 MILLION on giving students iPads. (I would be VERY unhappy if my employer said they valued my work so much they were going to give more of my money to a "charity" that was already taxing me to do the same thing.)

Second, if you get the money it may put you in a status where it makes sense to itemize, and you may then deduct a lot of things that would otherwise not be deductible. It may increase your giving because you know that you can deduct it.

Third, it will appear on your annual income statements, which are used by the SSA to determine retirement payments, or if a year counts towards retirement at all. It can also have an effect on how much you can borrow as it will be shown as income.

But overall, giving the money to the employee means that the employee chooses where his money goes, not the company. It may help the tax liability of the employee by allowing itemization to increase deductions after donating the money. Or it may simply be a really useful $3000 if it isn't donated.

In either case, it isn't the same thing even if in some cases the ends are the same. The ends don't justify the means.