In 1999, the William H. Gates Foundation and a separate charity Bill Gates had established to improve computer access in US libraries were combined into the Bill and Melinda Gates Foundation.
As the couple grew richer through Microsoft, so they started making intermittent donations to a trust (from 2006 known as the Bill and Melinda Gates Foundation Asset Trust), which invested the accumulating assets. Those in turn were donated to the foundation.
“In the early days, it was crazy,” said Katharine Kreiss, who joined in 2002 and is refreshingly less on-message than more recent recruits. “There were so few people. I was one of 17 in total covering global health. By law in the US, as a charity you have to spend 5 percent of your endowment [annually], so you’re always trying to meet this number. When I started, we gave out about US$1.5 billion, the same as my department had when I was in the government, where I think we had a staff of 4,000. When I came into the foundation, I had 172 grants I was working on. There weren’t the people to do the rigor. We have so changed since. Now I have eight grants and I’m overwhelmed. I’m working on them in a much more detailed way.”
Gates is also much more involved. Since 2008 he and Melinda have begun regularly visiting the foreign projects it supports.
“About 18 to 24 months in advance, they’re thinking about what trips they might go on,” Kreiss said. “Then they winnow down the options. We send them briefing notes. It’s really like working with a high-level principal in the government. If it’s your project, you will probably do an advance trip or two. Bill and Melinda will send their own advance team to look at logistics.”
Then, sometimes accompanied by one or two carefully chosen journalists, the world’s second richest couple will visit homes or clinics in some of the world’s most blighted regions.
“I’ve never actually been on a trip with Bill and Melinda, but there are many questions,” Kreiss said. “I’ve heard it’s just nonstop questions. There’s no downtime. Not a minute. It’s not a vacation.”
When they are back in Seattle, where they still live, Bill and Melinda have the use of offices at the foundation on a secluded top-floor corridor, along with foundation chief executive Jeff Raikes and William Gates Sr. This part of the building is slightly plusher — there are lights concealed in pillars and one corridor wall is an expensive-looking gold color — but it is hardly palatial.
Bill Gates’ status is denoted by something subtler — the sudden care with which foundation staff from Raikes downward start choosing their words when the subject of Gates and his wife comes up.
“The foundation is their vision, their mission,” Kreiss said.
Roy Steiner, the foundation’s deputy director for agriculture (Harvard University, former management consultant), said: “Bill has just recently spent a night in an Indian village. He slept in a hut in a village. How many chairs of philanthropic organizations have done that? But he’s a business guy — he wants to understand the customer.”
Outsiders who work with the foundation are sometimes less enthusiastic about his role.
“Everyone in that organization spends their whole time second-guessing what Bill will say,” one said. “They’ve got very smart people, but they’re always waiting for Bill.”
Insulated from Critics
According to the foundation, Gates and his wife “review” only its grants that exceed US$50 million, but Bill Gates’ influence can also be felt in much smaller foundation matters. Recently, an academic paper covering an area in which the charity is highly active, written by someone Gates knew quite well, was held back from him by foundation staff.
“We can’t show it to him,” the author of the paper was told. “We think he won’t like it. The problem is the title of the paper. It includes a word Bill is allergic to.”
Yet sometimes, the author continued, Gates is more open-minded than his subordinates anticipate.
“If you can capture his imagination, he will listen to any idea. He’s willing to say: ‘Let’s look at this,’” the author said.
This year, alongside the foundation’s slick official Web site, a quirkier and more personal one began appearing called the Gates Notes, with sections called “What I’m Thinking About,” “What I’m Learning” and “My Travels,” and musings and recommendations on green technology, the financial crisis and the computer business, as well as on the foundation’s existing activities.
There is a sense of Gates, still only 54 and liberated from his round-the-clock Microsoft duties, constantly roaming beyond his charity’s already vast boundaries. The Internet, the modern power of celebrity, and the ease of travel to virtually anywhere in the world enjoyed by the super-rich has made it possible for the more thoughtful, socially conscious of them — such as Gates and the financier George Soros — to become autodidacts and philosopher-kings more potent even than the last generation of famous philanthropists, such as Andrew Carnegie and John D. Rockefeller.
Last May, Gates, Soros, Warren Buffett and David Rockefeller Jr, Rockefeller’s great-grandson, held a long private meeting in New York, not far from the UN, along with an assortment of media potentates such as Ted Turner, Oprah Winfrey and Michael Bloomberg. It was reported that Gates had been involved in summoning them all together and that the “Good Club,” as it supposedly called itself, discussed the world’s economic, environmental and health problems, the dangers of over-population and how rich people could better help poor people.
The Sunday Times quoted an unnamed participant at the meeting, who said that without anything “as crude as a vote” the gathering had agreed that the world’s problems “need big-brain answers ... independent of government.”
For the Internet’s many Gates-watchers and conspiracy-spotters, it was all irresistibly sinister. Last month, an apparently more benign explanation appeared. A friend of Gates and Buffett, Carol Loomis, wrote in tycoon-watchers’ magazine Fortune that the gathering had been part of a behind-the-scenes campaign by the two men and Melinda Gates, which was now ready to go public, to persuade the rest of the US’ billionaires to pledge at least 50 percent of their wealth to charity.
Like the Gates foundation, the initiative seems laudable and refreshing in many ways — especially given the discarding of any sense of social responsibility by so many of the rich in recent decades. Several of the US’ wealthiest families have already signed the pledge and yet, some authorities on philanthropy fear the consequences of this giving boom and dislike the faint air of playing God that hangs over its creations, such as the Gates foundation.
“The world isn’t a giant experiment. The foundation affects real people in real places. Why should Bill decide which sort of vaccines get developed?” veteran charity commentator Michael Edwards said. “If you read the early reports of the Rockefeller and Carnegie foundations, those organizations have almost exactly the same character as the Gates foundation — top-down, technocratic, applying the language of engineering to social problems.”
Edwards has worked in the charity sector since 1978, through good times and bad, and he also warned: “You can have boom and bust in this kind of ‘philanthrocapitalism’ as in capitalism itself.”
Put crudely, the super-rich need to stay super-rich for their charitable enterprises to function.
The value of the Gates foundation’s endowment fell by a fifth during the 2008 banking crisis, although Raikes said the foundation did not cut its grant-making during the downturn and its finances have recovered since. The ethical basis of the foundation’s finances has also been questioned.
In 2007, an investigation by the Los Angeles Times found that the charity, via its trust, invests in “companies that contribute to the human suffering in health, housing and social welfare that the foundation is trying to alleviate.”
The foundation did not challenge the thrust of the articles, which included allegations that it invested in an oil company responsible for causing health problems by burning off its unwanted gas in an African country in which the foundation was active in trying to improve the population’s health, but the charity decided after a brief review not to change its investment policy.
Raikes’ predecessor Patty Stonesifer wrote to the newspaper: “The stories you told of people who are suffering touched us all, but it is naive to suggest that an individual stockholder can stop that suffering. Changes in our investment practices would have little or no impact on these issues.”
The Bill & Melinda Gates Foundation Asset Trust has always refused to invest in tobacco firms, otherwise the outside investment managers the trust employs are instructed to seek the maximum return on its endowment, so that the foundation can be as generous as possible. It is a moral trade-off, but then uncomfortable compromises, like unequal power relationships, run through most charitable work.
Many of the Gates foundation’s critics concede that the organization is, as Edwards puts it, “closer to the best than the worst” on the spectrum of private charitable foundations; more expertly staffed, more focused on the problems where charity is most needed, more professional — there have so far been no obviously disastrous foundation-funded projects — and more prepared to change as it grows.
Raikes’ desire for fiercer internal debates at the foundation may be an acknowledgment that Gates needs to be challenged more and Gates may want to be challenged more, Girindre Beeharry (who is conducting an internal review of the foundation’s health strategy) said.
Among Gates’ current reading is a 2005 group biography of former US president Abraham Lincoln’s inner circle, Team of Rivals by Doris Kearns Goodwin.
“Bill thinks it’s the best book ever written. It’s about how you embrace dissent as a leader,” Beeharry said.
Lincoln’s “genius,” writes Goodwin, was “to form friendships with men who had previously opposed him; to repair injured feelings; to assume responsibility for the failures of subordinates; to share credit with ease; and to learn from mistakes.”
Given his driven decades at Microsoft, it may be hard to imagine Gates being interested in such softer qualities, but then it was hard not so long ago to imagine him giving most of his money away.
Next year, the foundation is scheduled to move into new premises. Instead of the present hidden-away headquarters, and two even blander buildings it uses 1.6km away — staff have to shuttle between them all by minibus — the foundation will occupy a much showier hilltop “campus” in central Seattle, all dark glass and golden stone, with office blocks like ocean liners, space for at least twice the current staff and a visitor center the size of a small supermarket for the public to learn about the foundation’s good works.
On the windows of the unfinished visitor center, there are quotes from selected thinkers. One is from the famous American anthropologist Margaret Mead: “Never doubt that a small group of thoughtful, committed individuals can change the world; indeed, it’s the only thing that ever has.”
VENTURE PHILANTHROPY
The way Gates and his elite staff have chosen to try to do so is by running their charity as a kind of business. Edwards calls this approach — increasingly popular at private foundations funded by business-people — “philanthrocapitalism.” Others call it “venture philanthropy.”
“Sitting here in Seattle, we’re not going to solve Africa’s problems. Africans are going to solve Africa’s problems. We’ve got to find the Africans,” Steiner said.
Often, this means the foundation mounting competitions for grant applications and giving money to the winners, which usually means the most “pioneering” [Steiner’s word] and those that promise to fulfill a need not met by other charities.
Foundation staff describe this process, and indeed all their work, in business-school language — achieving “leverage,” building the foundation “brand,” serving “markets” and “customers.” Or they use the language of management consultancy and computing.
“Bill is about numbers,” Steiner said. “He wants to see the data. He values data more than ideology.”
Like all the foundation staff I meet, Steiner is personable and thoughtful, sitting tieless in his modest office. Like the others, he is both intensely idealistic and close to disdainful about the older, less business-orientated charity models.
In his field of agricultural aid, he said: “We need a lot of smarter ways of doing things. We can’t do things the same old way ... The people who’ve been in the field for so long [for other charities] don’t embrace how much transformation can happen. You walk in there as clear-eyed as you can ... and [you] are basically optimistic that people want to improve their lives. You enable them with technology and knowledge, and great and wonderful things can happen.”
He looks into the middle distance as the soft Seattle summer drizzle hangs outside his window. With his strong gaze and open-necked striped shirt, his shelves crammed with agriculture books and box files, his line of jars filled with brightly colored seeds on a table against the wall, and his slightly impatient body language, as if just about to set off on another of his frequent trips to Africa or Asia, he seems a little like a high-minded Victorian explorer.
However, Steiner and his colleagues are probably more aware of their limitations.
There is a problem with the Gates foundation that its staff, for the time being, appear to grasp better than its critics. For all the charity’s resources and connections, for all the attendant risks of over-confidence and over-mightiness, on the ground in Africa or Asia the foundation’s immense-sounding grants are a minuscule fraction of what is required to create a fairer world.
“In agriculture, the problem’s this big,” Steiner said as he threw out his long arms.
“Our resources are this big,” he said as he pinched a centimeter of air between a finger and thumb.
With a former management consultant’s preciseness, he concluded: “We estimate we can probably be 3 percent to 5 percent of the overall solution.”
Then he abruptly gets up from the meeting table, turns away from me without a goodbye handshake, and goes back to his desk and computer.
At the Gates foundation, they are very keen that meetings do not overrun. There is much work to be done.
This is part two of a two-part article. Part one ran yesterday.
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