Alibaba’s charity is good for the developing world—but its business is better

“When you have $1 million, you’re a lucky person. When you have $10 million, you have trouble. When you have more than $1 billion, you have responsibility.” So says Jack Ma, founder and executive chairman of the Alibaba Group. Alibaba — the Chinese e-commerce giant — gained international prominence after its recent record-breaking IPO.

The talk about responsibility is not just talk. Ma says he has earmarked $3 billion of his IPO earnings to donate to environmental and educational projects in China. So Ma is clearly a man who believes in giving back. On the corporate side, under his leadership Alibaba has pledged to donate 0.3% of profits to environmental protection initiatives. If 0.3% seems like a small amount, consider that that’s a percentage of revenue, not profits. And on annual revenues in the $7.5 billion range, 0.3% turns out to be something a little over $22 million. Nothing to sneeze at.

So let me ask a silly question: why do we think such charitable moves are a good thing? Well, pretty simply because we think they produce good outcomes.

But if we commend such moves, ethically, because they are likely to produce good outcomes, then we should also praise Alibaba’s business activities more generally. Ecommerce companies like Alibaba connect people together and enable commerce. They enable enormous quantities of mutually-advantageous exchange.

According to Wired,

Ma says part of his strategy for growing the company is to continue expanding into developing countries—countries where approximately 6.5 billion people don’t use e-commerce today. “That’s the opportunity we could have,” he says. “We’re trying to help Nigerian SMEs sell to the Philippines and the Philippines sell to Pakistan and Pakistan sell to Argentina.”

If Alibaba can achieve that, it will have done more good in the world — and deserve more moral praise — than Ma and Alibaba’s philanthropy combined.

Chris MacDonald is director of the Jim Pattison Ethical Leadership Program at the Ted Rogers School of Management, and founding co-editor of the Business Ethics Journal Review.

2 comments so far

  1. David on

    Interesting to think about large amounts of money as good, problematic, and a responsibility. Just imagine what could be done if more people in the “good” bracket also saw it as a social responsibility.

  2. Chris MacDonald on

    Kostyantyn, you should clarify who you’re addressing. Ma, me, or David?

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