Bill & Melinda Gates Foundation

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Overview

The Bill & Melinda Gates Foundation (B&MGF) is the largest transparently operated[1] charitable foundation in the world, founded by Bill and Melinda Gates in 2000 and doubled in size by Warren Buffett in 2006. The primary aims of the foundation are, globally, to enhance healthcare and reduce extreme poverty, and, in the United States, to expand educational opportunities and access to information technology. The foundation, based in Seattle, Washington, is controlled by its three trustees: Bill Gates, Melinda Gates, and Warren Buffett. Other principal officers include Co-Chair William H. Gates, Sr. and Chief Executive Officer Patty Stonesifer. It has an endowment of US$38.7 billion as of December 31, 2007.[2]

History

The foundation was initially funded by Bill Gates with US$126 million in 2000. During the foundation's first two years, funding grew to US$2 billion. The B&MGF was endowed by Bill Gates, chairman and founder of Microsoft and his wife, Melinda Gates in January 2000, through the merger of the Gates Learning Foundation and the William H. Gates Foundation. The Gates Learning Foundation was formed out of the Gates Library Foundation, which was founded in 1996, as an outgrowth of the Microsoft Libraries Online initiative.[3] On June 15, 2006, Gates announced his plans to transition out of a day-to-day role with Microsoft, effective July 31 2008,[4] to allow him to devote more time to working with the foundation.

Bill and Melinda Gates, along with the musician Bono, were named by TIME as Persons of the Year 2005 for their charitable work. In the case of Bill and Melinda Gates, the work referenced was that of this foundation. On May 4, 2006, the foundation received the Prince of Asturias award for International Cooperation.[5]

The Warren Buffett donation

On June 25, 2006, Warren Buffett (then the world's richest person, now estimated worth of US$62 billion as of April 16 2008)) pledged to give the foundation approximately 10 million Berkshire Hathaway Class B shares spread over multiple years through annual contributions.[6] Buffett set conditions so that these contributions do not simply increase the foundation's endowment, but effectively work as a matching contribution, doubling the Foundation's annual giving: "Buffett's gift came with three conditions for the Gates foundation: Bill or Melinda Gates must be alive and active in its administration; it must continue to qualify as a charity; and each year it must give away an amount equal to the previous year's Berkshire gift, plus another 5 percent of net assets. Buffett gave the foundation two years to abide by the third requirement."[7] The Gates Foundation received 5% (500,000) of the shares in July 2006 and will receive 5% of the remaining earmarked shares in the July of each following year (475,000 in 2007, 451,250 in 2008, and so on).[8][9]

Activities

As of 2006, the foundation has an endowment of approximately US$34.6 billion. To maintain its status as a charitable foundation, it must donate at least 5% of its assets each year.[10] Thus the donations from the foundation each year would amount to over US$1.5 billion at a minimum.

The Foundation has been organized, as of April 2006, into four divisions, including core operations (public relations, finance and administration, human resources, etc.), under Chief Operating Officer Cheryl Scott, and three grant-making programs:

Global Health Program

The President of the Global Health Program is Tachi Yamada. The Gates Foundation has quickly become a major influence upon global health; the approximately US$800 million that the foundation gives every year for global health approaches the annual budget of the United Nations' World Health Organization (192 nations) and is comparable to the funds given to fight infectious disease by the United States Agency for International Development.[11] The Foundation currently provides 17% (US$86 million in 2006) of the world budget for the attempted eradication of poliomyelitis (polio).[12]

The Global Health Program's other significant grants include

The Global Alliance for Vaccines and Immunization
The foundation gave The Global Alliance for Vaccines and Immunization a donation of US$750 million on 25 January, 2005.[13][14]
The Institute for OneWorld Health
The foundation gave The Institute for OneWorld Health a donation of nearly US$10 million to support the organization's work on a drug for visceral leishmaniasis (VL).
Children's Vaccine Program
The Children's Vaccine Program, run by the Program for Appropriate Technology in Health (PATH), received a donation of US$27 million to help vaccinate against Japanese encephalitis on 9 December, 2003.[15]
University of Washington Department of Global Health
The foundation provided approximately US$30 million for the foundation of the new Department of Global Health at the University of Washington in Seattle. The donation promoted three of the Foundation's target areas: education, Pacific Northwest and global health.
HIV Research
The foundation has donated a grand total of US$287 million to various HIV/AIDS researchers. The money was split between sixteen different research teams across the world, on the condition that they share their findings with one another.[16]

Global Development Program

President Sylvia Mathews leads the Global Development Program, which combats extreme poverty through grants such as the following:

Financial Services for the Poor

Financial Access Initiative
A $5 million grant allows Financial Access Initiative to do field research and answer important questions about micro finance and financial access in impoverished countries around the world.
Grameen Foundation
A $1.5 million grant allows Grameen Foundation to make more microloans, with the goal of helping five million additional families and successfully freeing 50 percent of those families from poverty within five years.[17]

Agricultural Development

Rice Research
Donated $19 million to the International Rice Research Institute to develop rice with higher amounts of micronutrients.
Alliance for a Green Revolution in Africa (AGRA)
The Gates Foundation has partnered with the Rockefeller Foundation to enhance agricultural science and small-farm productivity in Africa, building on the Green Revolution which the Rockefeller Foundation spurred in the 1940s and 1960s. The Gates Foundation has made an initial $100 million investment in this effort, to which the Rockefeller foundation has contributed $50 million.

Global Libraries

Access to Learning Award
Each year an award of up to US$1 million is given to a public library or similar organization outside the United States that has an innovative program offering the public free access to information technology.
Official site: Part of CLIR.org

Global Special Initiatives

The Foundation's Special Initiatives include responses to catastrophes as well as learning grants, which are used to experiment with new areas of giving. Currently, the Foundation is exploring water, hygiene and sanitation as a new focus within Global Development.

Indian Ocean Earthquake
The foundation made total grant donations of US$3 million to various charities to help with the aid effort for victims of the 2004 Indian Ocean Earthquake. These charities include:
Kashmir Earthquake
The foundation made a donation of US$500,000 for the 2005 Kashmir earthquake.[15]
Water, Hygiene and Sanitation
The Foundation is giving the International Bank for Reconstruction and Development US$1,200,000 over 3 years to find new, sustainable ways to make water, sanitation and hygiene services safer and more affordable.

United States Program

Under President Allan Golston, the United States Program has made grants such as the following:

U.S. Libraries

In 1997, the foundation introduced a U.S. Libraries initiative with a goal of "ensuring that if you can get to a public library, you can reach the Internet." The foundation has given grants, installed computers and software, and provided training and technical support in partnership with public libraries nationwide.

Most recently, the foundation gave a $12.2-million grant to the Southeastern Library Network (SOLINET) to assist libraries in Louisiana and Mississippi on the Gulf Coast, many of which were damaged or destroyed by Hurricanes Katrina and Rita.

Education

Carnegie Mellon University
The Foundation gave US$20 million to the Carnegie Mellon University School of Computer Science for a new Computer Science building which will be named the Gates Center for Computer Science.[18]
NewSchools Venture Fund
The Foundation contributed US$30 million to help NewSchools to manage more charter schools, which aim to prepare students in historically underserved areas for college and careers.
Gates Millennium Scholars
Administered by the United Negro College Fund the foundation donated US$1 billion for scholarships to high achieving minority students.[19]
Gates Cambridge Scholarships
Donated US$210 million in October 2000 to help outstanding graduate students outside of the United Kingdom study at the University of Cambridge. Approximately 100 new students every year are funded.[20]
University Scholars Program
Donated US$20 million in 1998 to endow a scholarship program at Melinda Gates' alma mater, Duke University.[21] The program provides full scholarships to about 10 members of each undergraduate class and one member in each class in each of the professional schools (Schools of Medicine, Business, Law, Divinity, Environment, and Nursing). The program also pays for a full-time administrator who organizes seminars to bring these scholars together for interdisciplinary discussions as well as the selection process in the Spring.
D.C. Achievers Scholarships
The Bill and Melinda Gates Foundation announced March 22, 2007 a $122 million initiative to send hundreds of the District of Columbia's poorest students to college.[22]
Washington State Achievers Scholarship
The Washington State Achievers program encourages schools to create cultures of high academic achievement while providing scholarship support to select college-bound students.
Texas High School Project[23]
Strong American Schools
On April 25th, 2007, the Bill and Melinda Gates Foundation joined forces with the Eli and Edythe Broad Foundation pledging a joint $60 million to create Strong American Schools, a nonprofit project responsible for running ED in 08, an initiative and information campaign aimed at encouraging 2008 presidential contenders to include education in their campaign policies.[24]

Pacific Northwest

Discovery Institute
Donated US$1 million in 2000 to the Discovery Institute and pledged US$9.35 million over 10 years in 2003, including US$50,000 of Bruce Chapman's US$141,000 annual salary. According to a Gates Foundation grant maker, this grant is "exclusive to the Cascadia project" on regional transportation, and it may not be used for the Institute's other activities, including promotion of intelligent design.
Rainier Scholars
Donated US$1 million
Computer History Museum
Donated US$15 million to the museum in October, 2005.[25]

Lifespan

In October 2006 the Bill & Melinda Gates Foundation was split into two entities: the Bill & Melinda Gates Foundation Trust, which manages the endowment assets and the Bill & Melinda Gates Foundation, which "... conducts all operations and grantmaking work, and it is the entity from which all grants are made."[26][27] Also announced was the decision to "... spend all of [the Trust's] resources within 50 years after Bill's and Melinda's deaths."[28][29][30][31] This would close the Bill & Melinda Gates Foundation Trust and effectively end the Bill & Melinda Gates Foundation. In the same announcement it was reiterated that Warren Buffett "... has stipulated that the proceeds from the Berkshire Hathaway shares he still owns at death are to be used for philanthropic purposes within 10 years after his estate has been settled."[32]

The plan to close the Foundation Trust is in contrast to most large charitable foundations that have no set closure date. This should lead to lower administrative costs over the years of the Foundation Trust's life and ensure that the Foundation Trust not fall into a situation where the vast majority of its expenditures are on administrative costs, including salaries, with only token amounts contributed to charitable causes.[33]

Criticisms

Diversity

The Gates Millennium Scholars fund, according to its official website's frequently asked questions section, only provides scholarships to African American, American Indian/Alaska Native, Asian, Pacific Islander American or Hispanic American applicants.[34] The program has been criticized for its exclusion of Caucasians. However, such programs are argued to be necessary to counteract the systemic racism and institutional racism that still exists in America.[35][36]

An op-ed by Ernest W. Lefever, published in the Los Angeles Times on November 1, 1999, stated:

"America's most celebrated college dropout had a great opportunity to boost higher education, help needy students and strike a blow against racism, but he blew it. If Bill Gates had been able to chat with Teddy Roosevelt before launching his breathtaking $1-billion program of college scholarships, America would be a better place. Unless significantly amended, Gates' 'minority' scholarships will further inflame racial tensions, delay the achievement of a colorblind society and subvert the cherished virtue of reward by merit. The Gates Millennium Scholarships for thousands of high school seniors over the next 20 years are intended to produce more scientists, engineers, doctors and educators from among American minorities, who, he claims, are woefully underrepresented in college. His commitment to arbitrarily preferred groups is bound to increase racial resentment. Gates' vague concept of 'diversity' confuses the laudable diversity of cultural talents that strengthens the nation with the self-conscious racial diversity that divides it by breeding arrogance and envy."[37]

Investments

The foundation invests the assets that it has not yet distributed, with the exclusive goal of maximizing the return on investment. As a result, its investments include companies that have been criticized for worsening poverty in the same developing countries where the Foundation is attempting to relieve poverty. These include companies that pollute heavily and pharmaceutical companies that do not sell into the developing world.[38] In response to press criticism, the foundation announced in 2007 a review of its investments to assess social responsibility.[39] It subsequently cancelled the review and stood by its policy of investing for maximum return, while using voting rights to influence company practices.[40]

Diversion of health care resources

In a January/February 2007 Foreign Affairs article, Laurie Garrett claims that many charitable organizations, among whom the Gates Foundation is prominent, harm global health by diverting resources from other important local health care services.[41] For example, by paying relatively high salaries at AIDS clinics, the foundation diverts medical professionals from other parts of developing nations' health care systems; the health care systems' ability to provide care diminishes (except in the area the foundation funds) and the charities may do more harm than good. Similar findings were reported in a December 2007 Los Angeles Times investigation.[42]

Ties to Planned Parenthood

The foundation has come under criticism from various pro-life groups over its monetary contributions to organizations focusing on family planning[43][44], such as donations to Planned Parenthood in excess of $34 million over the years,[45] an organization in which Bill Gates' father, William H. Gates, Sr., had also personally served on the board.[46]

See also

Notes and references

  1. ↑ On May 11 2006 The Economist reported that the Stichting INGKA Foundation is technically the world's largest charitable foundation while also alleging that the foundation's primary purposes are tax avoidance and anti-takeover protection for the home furnishings retail group IKEA.[1]
  2. ↑
  3. ↑ Announcements - Bill & Melinda Gates Foundation
  4. ↑ Microsoft PressPass (June 15 2006). "Microsoft Announces Plans for July 2008 Transition for Bill Gates". Microsoft PressPass. Check date values in: |date= (help)
  5. ↑ Announcements - Bill & Melinda Gates Foundation
  6. ↑ "Warren Buffett gives away his fortune". Fortune. Time Warner via CNNMoney.com (money.cnn.com). March 5, 2008. Retrieved 2007-12-10. Check date values in: |date= (help)
  7. ↑ [2] [3] [4]
  8. ↑ FORTUNE Magazine: How Buffett's giveaway will work - June 25, 2006
  9. ↑ http://berkshirehathaway.com/donate/bmgfltr.pdf
  10. ↑ SaveWealth.com Private Family Foundations
  11. ↑ Gates Foundation out to break the cycle of disease, Seattle Post-Intelligencer, 8 December 2003
  12. ↑ http://www.polioeradication.org/content/general/HistContributionWebMay06.pdf
  13. ↑ "Gates Foundation, Norway Contribute $1 Billion to Increase Child Immunization in Developing Countries" (Press release). GAVI Alliance. 2005-01-24. Retrieved 2007-10-24. Check date values in: |date= (help)
  14. ↑ Thomson, Iain (2005-01-25), Bill Gates gives $750m to help African children, retrieved 2007-10-24 Check date values in: |date= (help)
  15. ↑ "Children's Vaccine Program Receives Grant From Bill & Melinda Gates Foundation to Combat Japanese Encephalitis" (Press release). Program for Appropriate Technology in Health. 2003-12-09. Retrieved 2007-10-24. Check date values in: |date= (help)
  16. ↑ BBC News (2006-07-20), Gates gives $287m to HIV research, retrieved 2007-10-24 Check date values in: |date= (help)
  17. ↑ "Gates Foundation Awards $1.5 Million to Grameen Foundation" (Press release). Grameen Foundation. 2006-08-29. Retrieved 2007-10-26. Check date values in: |date= (help)
  18. ↑ [5], cmu.edu
  19. ↑ [6], gmsp.org
  20. ↑ gates.scholarships.cam.ac.uk
  21. ↑ scholarship program, Duke University
  22. ↑ Bill Gates Gives $122M for D.C. Scholarships.. March 23, 2007.
  23. ↑ Texas High School Project
  24. ↑ Billionaires Start $60 Million Schools Effort
  25. ↑ BBC News (2005-10-17), Gates cheers on computer museum, retrieved 2007-10-24 Check date values in: |date= (help)
  26. ↑ Gates Foundation Announces That It Doesn't Plan to Operate Forever
  27. ↑ About the Bill & Melinda Gates Foundation Trust
  28. ↑ Announcements - Bill & Melinda Gates Foundation
  29. ↑ The Chronicle, 11/29/2006: Gates Foundation Announces That It Doesn't Plan to Operate Forever
  30. ↑ Gates foundation to spend all assets within 50 years of trustees' deaths
  31. ↑ Gates Foundation Sets Its Lifespan
  32. ↑ Announcements - Bill & Melinda Gates Foundation
  33. ↑ The Chronicle, 11/29/2006: Gates Foundation Announces That It Doesn't Plan to Operate Forever
  34. ↑ [7], gmsp.org
  35. ↑ [8], msnbc.msn.com
  36. ↑ [9], ericdigests.org
  37. ↑ Times Archives: Bill Gates' 'Diversity' Subverts Merit
  38. ↑ Dark cloud over good works of Gates Foundation, Los Angeles Times, 7 January 2006
  39. ↑ Gates Foundation to review investments, The Seattle Times, 10 January 2007
  40. ↑ Gates Foundation to maintain its investment plan, The Austin Statesman, 14 January 2007
  41. ↑ The Challenge of Global Health Foreign Affairs, January/February 2007
  42. ↑ Piller, Charles; Smith, Doug (December 16, 2007), "Unintended victims of Gates Foundation generosity", Los Angeles Times
  43. ↑ [10]
  44. ↑ [11]
  45. ↑ [12]
  46. ↑ [13][14]

External links

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