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Google Businesses Technology

Alphabet Donated Its Employees' Holiday Gifts To Charity (fortune.com) 399

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.
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Alphabet Donated Its Employees' Holiday Gifts To Charity

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  • by Ryanrule ( 1657199 ) on Friday December 09, 2016 @02:41PM (#53454381)
    Money for people.
    • Re:The human fund (Score:5, Insightful)

      by Anonymous Coward on Friday December 09, 2016 @02:48PM (#53454475)

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

      • Re:The human fund (Score:5, Insightful)

        by cayenne8 ( 626475 ) on Friday December 09, 2016 @03:30PM (#53454911) Homepage Journal
        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.

    • That was the first thought that popped into my head, and you beat me to it. Cantstanja!

      • Carbon copy here. I was like "THE HUMAN FUND!" *click* Looks like I'm not the only one!

        Now, if they also put up aluminum poles instead of trees....

    • by al0ha ( 1262684 )
      Oh you beat me to it! Wish I had mod points!
    • Source of the parent post, in case some of you are too young and never saw it:
      https://www.youtube.com/watch?... [youtube.com]

  • by r2rknot ( 1102517 ) on Friday December 09, 2016 @02:42PM (#53454385)

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

  • by Anonymous Coward on Friday December 09, 2016 @02:43PM (#53454395)

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

    • I so had moderator points just YESTERDAY. +1

    • This is part of the reason I never give at the checkout. That, and the cumulative inconvenience, annoyance, and contribution to the prevailing atmosphere of "everything's a shakedown".

    • Google wrote it off their taxes.
    • If you want to count it as income, and then write it off....wouldn't your tax liability be exactly the same?

      • by skegg ( 666571 ) on Friday December 09, 2016 @05:31PM (#53455779)

        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.

        • by omnichad ( 1198475 ) on Friday December 09, 2016 @05:53PM (#53455943) Homepage

          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.

    • by Br00se ( 211727 )

      If you do write it off your taxes, you didn't really donate it anyway. Uncle Sam (or the equivalent) did.

      Nothing wrong with that really. Just don't confuse it with a real donation where you don't get anything back in return.

    • by EvilSS ( 557649 )

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

      It would a pass-through tax wise (if they really did it in the employee's names). It wouldn't be deductible but wouldn't count as income either.

    • by Jake73 ( 306340 )

      In a sense, yes. If Alphabet had gifted the employees $500, the employees would have received such a declaration on the W2 and therefore would have to pay taxes on that $500 gift. Instead, Alphabet gifts the charity, so the employees do not receive such a declaration so they don't have to pay taxes on the gift.

      I'm no accountant, but as I understand the tax world, these two are equivalent to all parties:

      1. Alphabet gives employees $500... Employee gives charity $500.
      2. Alphabet gives charity $500.

      What isn't

  • Write off (Score:2, Insightful)

    by Anonymous Coward

    So does this mean the employees get the write off or just Alphabet?

    • Re:Write off (Score:4, Insightful)

      by CAOgdin ( 984672 ) on Friday December 09, 2016 @03:03PM (#53454637)

      Of course Alphabet gets the tax write-off. That's why the "banker" at the top changed the rules. To that mindset, employees are just a drag on revenues and not worth what they're paid...no matter how low. And, now, with a new appointment to leadership for the Department of Labor, we can expect any "floor" on earnings in general (e.g., "minimum wage") to evaporate to zero.

      We are merely serfs working in the world created by, and enjoyed solely by, the 1% who own more net worth than the 99% of the rest of us (http://www.bbc.com/news/business-35339475).

      Know your place, serf. You exist only to benefit the wealthy...unless you ARE wealthy.

      • Re:Write off (Score:5, Insightful)

        by sexconker ( 1179573 ) on Friday December 09, 2016 @03:36PM (#53454959)

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

        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.

      • Of course, if they gave the employees a bonus, it would also be tax deductible.

        They decided the positive PR for $30M of donations was better than the positive employee relations of giving $30M to them.

  • 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.

    • by fahrbot-bot ( 874524 ) on Friday December 09, 2016 @02:49PM (#53454481)

      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.

    • cut the crap. it's not a gift at all, they gave their employees nothing. and note well the executives did get their multi-million dollar bonuses. think about what message that gives.

  • CEO Gift (Score:5, Informative)

    by 110010001000 ( 697113 ) on Friday December 09, 2016 @02:44PM (#53454435) Homepage Journal
    P.S. The CEO got a $12 million Christmas bonus and kept it all.
    • by Yvan256 ( 722131 )

      Let's see. The CEO bonus of $12 million divided by 70K employees equals $171.42, so everyone working at Alphabet should ask for a $171.42 Christmas bonus. You know your CEO can afford it. Hey, he'll even have a bonus of $600 left for himself which is 3.5 times higher than the employee bonus, which seems more reasonable if you ask me.

    • Well, he needs to recoup some of the wasted money spent on Hillary's campain.

      https://www.opensecrets.org/or... [opensecrets.org]

  • by PMuse ( 320639 ) on Friday December 09, 2016 @02:47PM (#53454459)

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

  • by gavron ( 1300111 ) on Friday December 09, 2016 @02:50PM (#53454493)

    Any employer can donate the gifts (or funds) they would have spent on employees, or any amount for that matter, to charity. That part of the story is clear and good on Alphabet for helping out needy schools to the tune of more money than I'll ever make in my lifetime.

    What is not accurate is the phrase "on its employees behalf" and other posters have already indicated that if the employees don't get the tax advantage, then the donation is not "on their behalf." Indeed the incentive is for Alphabet to get the deduction, effectively providing a $30M gift which costs them probably half that.

    However, unlike other posters who say "If I'm not getting the benefit then F*** them" I think on it this way: If I were an employee and was told "This year instead of giving YOU a gift we're giving one to a poor child in need" then I would think about whether I was ENTITLED to a gift (no), or whether I just got spoilt and greedy and want want wanted a gift, and now I'm crying my big head to sleep on my big pillow.

    Good on Alphabet. Good on everybody who supports helping out those in need.

    E
    P.S. I'm not a tax expert, lawyer, nor doctor. But I do write my opinions on the Internet.

    • by Nemyst ( 1383049 ) on Friday December 09, 2016 @02:54PM (#53454539) Homepage
      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.
      • by Ogive17 ( 691899 )
        A chunk of their salary? If the gift went to the employee they would have to pay 40% of the value in taxes. It's considered income and 40% is the gift tax...

        It would have been nice if the company gave them an option but let's not pretend any of the employees will not be able to pay the bill this Christmas season because they weren't given a new cell phone. (well, unless their old cell phone broke and that's what they used to pay bill online...)
    • by King_TJ ( 85913 ) on Friday December 09, 2016 @03:05PM (#53454657) Journal

      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.)

      • This.

        30 Million to the school budgets is nothing. If a company like Alphabet want's to really help, they should be lobbying to help find a bigger and steadier way to fund our schools (i.e. tax increases on property, income, or corporations).

        Telling people this close to Christmas that you've changed bonus policy is a jerk move. My compensation is mine, not yours. After all, employment is a business relationship. For anyone who disagrees, wait to see how you feel after your first layoff from a profitable

    • employees don't get the tax advantage

      What tax advantage? So if Google gave each employee $500, and then took that $500 and sent it to charity instead of putting on a paycheck, the employee would have $500 more in income, which could then be written off on taxes. A net change of taxable income of zero.

      The tax liability is EXACTLY the same.

    • What is not accurate is the phrase "on its employees behalf"

      Alphabet absolutely could be doing this on the employee's behalf, thus giving the ability to deduct it.
      As I don't work for them, I don't know. If I did, I'd be asking for a receipt if there was any mention of "on your behalf" or "in your name" in the email.

    • But the problem is that, as you say, the $30M gift probably cost Alphabet half that but they probably wrote off the full amount. i.e. it's just a scam to get a $15M tax write-off. And it's probably less than half so they get an even bigger fraction as write-off. If they gave that hardware to employees, they could still write it off as a business expense, but only at cost. So this is the employee being told "instead of giving you a gift, we are giving a poor child's school your gift (which they will prob
  • by rsilvergun ( 571051 ) on Friday December 09, 2016 @03:03PM (#53454641)
    is give your stuff away to the schools. The tax write offs basically pay for the whole thing and in 10-15 years the kids hit the job market trained on your software (on the public's dime, no less).

    Not that I oppose computers in education, but we should be buying what's needed directly instead of these round about scams where we pay for it anyway with tax write offs. That way kids get what they actually can use instead of what the mega corps want them to have.
    • by ghoul ( 157158 ) on Friday December 09, 2016 @03:38PM (#53454979)

      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

  • by Arkham ( 10779 ) on Friday December 09, 2016 @03:11PM (#53454719)

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

    • by Rob Riggs ( 6418 )
      Isn't that subject to Social Security and Medicare taxes? Seems like a raw deal for employees.
    • I agree. That indeed is the right way to do it.

      But still I agree with everyone else. The end of year bonus is part of your compensation for your job. It's not a gift to you.

    • The tax deduction isn't money you get back from the government. It's the government saying they wont' tax the income you ended up donating to charity. As such, there is no difference between the company "giving" you the money to donate (counts as income on your taxes) and you getting the tax write-off (government doesn't tax that income), vs the company donating the money in your name (doesn't count as income, you don't get a tax deduction).

      e.g. Say I'm at the 25% tax bracket. Company gives me $4000 t
      • by Obfuscant ( 592200 ) on Friday December 09, 2016 @06:31PM (#53456233)

        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.

    • What it does is makes it tax neutral. You neither gain nor suffer the tax liability incurred as the money they put into the account is considered earnings.
  • Oh joy,

    The job market is about to be flooded with pissed off ex-Google employees.

    • by PCM2 ( 4486 )

      The job market is about to be flooded with pissed off ex-Google employees.

      Boy, won't it be a splash of cold water when they find out what the real world is like?

  • The first stage of anger from employees is the traditional "stealing of the pens and post-it notes". Be prepared for massive re-stocking come the current year!

    Also on a side note what would be really funny is for an employee of Alphabet to go work for a non-profit for six months, demanding his original salary because he was donating his time on behalf of Alphabet...

    • by ewhac ( 5844 )

      The first stage of anger from employees is the traditional "stealing of the pens and post-it notes".

      There aren't any; everyone's supposed to be dogfooding Google Keep.

      :-)

  • Now they have more physical ammo for their SF protests.
  • The way things are going, when they do this next year, you might be the recipient of that new Chromebook and maybe a blanket and a warm meal.
  • by WaffleMonster ( 969671 ) on Friday December 09, 2016 @03:42PM (#53455017)

    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.

  • by j2.718ff ( 2441884 ) on Friday December 09, 2016 @03:50PM (#53455087)

    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.

  • If a company wants to donate to charity, fine. However, when management makes the decision without any employee input, do not say it is on the employees' behalf. At least have the decency to be honest.
  • by DidgetMaster ( 2739009 ) on Friday December 09, 2016 @05:33PM (#53455791) Homepage
    Do you think upper management ever sent themselves a letter that said in effect "Instead of your regular big bonuses, the company has instead donated X $Millions to a charity in your name. Have a Merry Christmas."? I think not. If they would never do this to themselves, why do it to all the other employees?

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