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Gates Foundation To Spend All Its Assets
El Lobo writes "The Bill & Melinda Gates Foundation has said it will spend all its assets within 50 years of both of them dying. The foundation focuses on improving health and economic development globally, and improving education and increasing access to technology. It also focuses on fighting diseases such as HIV/AIDS, tuberculosis, and malaria. The Seattle-based foundation plans to increase spending to about $3.5 billion a year beginning in 2009 and continuing through the next decade, up from about $1.75 billion this year." The Wall Street Journal (excerpted at the link above) called the foundation's decision "a decisive move in a continuing debate in philanthropy about whether such groups should live on forever."
How many endowed research programs will this money go to?
Yes, the foundation will cease, but a good chunk of the funds will remain as permanent endowments for the various causes that the Gates support. The most important difference will be management: Each will be managed by people close to the individual projects.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
I think it would be a better move to establish organizational policies that dictate an amount or percentage that must be donated over certain time periods, instead of effectively forcing the end of a charitable foundation.
Building such a large foundation is no small task, it just seems like a waste to dissolve all the work that went into it just because the founders aren't alive. I think it would be smarter to establish a policy that prevents it from hoarding assets and forces continued charitable work. Sort of like a charity/monetary GPL.
The vast majority of funds and foundations that have long survived their founders have gone in ideological directions that would outrage said founders; if Gates has set a time limit on his foundation, I certainly can't argue with it.
I applaud this decision. I think that businesses and charities should all have a life span. Too often they become bloated with bureaucracy and weighted down with useless traditions. They think only of prolonging their own existence, above all other things.
I am gaining respect for Mr. Gates with his handling of this charity. For a decade I outspent him in charity giving as a percentage of my income and worth. It is great to see him come around and finally give back to the world what the world was so gracious to give to him.
Or fund projects that might be profitable as well as beneficial in the long term, but that no other corporation wants to fund because the profits might only show a century later.
-b.
They tend to invest in doing things that will persist for generations; educating one person can change the lives of all of their descendants and so forth, and by spending it near their lives, they make sure that the spending is relevant to what they care about and that no leaches come in and live off the trust.
Nerd rage is the funniest rage.
Bill is evil for having that much money!
Money is evil for existing!
He was evil for hording it!
He's evil for spending it, no matter he spends it on!
He's evil if he doesn't spend it fast enough!
He's evil unless he spends it exactly on the things that the most people here who say he's evil can agree that he should spend it on! And even then, he's still evil!
Children with AIDS shouldn't want to live longer if it means saying they don't care about Windows 98's browser implementation issues!
Really, why do articles like this even make it here? Bill and Melissa's charitable foundation - which puts all others to shame - is nothing more than a blank canvas on which to paint your already-existing opinion of the man. We might as well put up an article about what brand of corn chips he prefers, since it would result in exactly the same conversation.
Don't disappoint your bird dog. Go to the range.
That's not the goal, though, of the foundation. The goal is to invest, but not invest in traditional stock markets. They are investing in human lives and the betterment of mankind as a whole, which is a much stronger investment, where the returns do keep on giving for generations even after the actual money runs dry.
Also, as the foundation proves that it is working, more and more high-power donations will probably pour in, albeit not as large as Gates'. The plan is based on their current funding level and their expected contributions from the Gates family.
This move makes perfect sense. Many people will argue that they should save and spread the money out, spending the interest. But this idea is going to spend the money on infastructure, research, food, whatever. The interest will be the results of the action. It doesn't make sense to save for the future when there are problems to be solved today.
This
Is build renewable energy infrastructure. With 50+ billion, you could put a huge dent on fossil fuel burning, help curb global warming, and even make some money. Yeah I think aids and the rest is bad, but there won't be any aids to treat around equitorial regions if nobody is living there anymore! 50+ billion builds a lot of solar/nuclear/wind/tidal power.
If the dollar is an "I owe you nothing", then the Euro is a "Who owes you nothing." - Doug Casey
It's literally taking (willingly) from the rich and giving to the poor.
No, it's not. Exactly not.
He's not taking the cash equivalent of the price of a vaccine and all of the costs of getting that vaccine to a child in Africa, and then just handing that money to that poor person. He's changing the circumstances on the ground so that those people can become middle class folks who will participate in an economy like the one that his existing customers enjoy. That's WAY better than "giving" it to them.
Don't disappoint your bird dog. Go to the range.
If you could save 100 lives today, wouldn't that be better than saving 1 a year for 100 years? While it's not sure that spending all the money now gets you 100x the benefit, holding back money for the sake of keeping the foundation going isn't necessarily increasing the benefit.
A lot depends on what your target charities are. If you're funding protection for farmers who have bad seasons, then spending it all now isn't going to prevent future bad seasons and will only provide a temporary relief. If your target is a cure or immunization for AIDS then achieving that goal as quickly as possible with the funds available would warrant not holding back.
Putting the benefit you hope to achieve first, above the life of the foundation, seems to be more true to the goals of a foundation.
Hell, the folks at the Ford Foundation are proud of the fact that they call Henry Ford "the grave spinner".
Indeed, the Gates Foundation is probably already failing to get the results they should because their failure to use objective criteria for prize awards creates a systemic malincentive: rewarding proposal writing rather than getting real results.
Seastead this.
It's literally taking (willingly) from the rich and giving to the poor.
Willingly is way off. He had a monopoly position in operating systems that made it literally impossible to buy computer equipment without giving Microsoft money.
Maybe I wanted to spend my money on a different, worthwhile cause?
Maybe I feel the Gates foundation is completely incompetent, and I'd like to spend that money on the same cause in a more effective way?
Doing some good with the money you stole from people doesn't make up for the stealing.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
If they invest money toward finding cures for diseases, they are helping people in perpetuity.
Breakfast served all day!
Yeah, because we all know Bill's money is stained with ill-gotten gains from drugs, gun-running or carcinogenic products. Not. Sometimes you *can* carry a metaphor too far, but all I see it stained by is the egos of several Silicon Valley types who couldn't compete with hard-edged marketing. Frankly, I think the Silicon Valley types will survive the humiliation.
Go somewhere random
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I think you're missing the point. They're not just giving the money away. The foundation is investing in results. By committing to ultimately spend all funds, a sense of urgency is created--you can't just say "we'll get to that later." You have to achieve results before that money is spent.
I'm pretty sure that's because in the Robin Hood stories, the rich are evil miscreants who work hard to ensure the poor suffer.
I personally tend not to think of myself that way, and do my best not to act that way.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
Speaking of redistributing wealth ... tell that to the government as well.
The government has a monopoly position that makes it literally impossible to earn, invest or buy *anything* without giving the government money.
Maybe I wanted to spend my money on a different, worthwhile cause?
Maybe I feel the government is completely incompetent and I'd like to spend that money on the same cause in a more effective way?
Doing some good with the money you stole from people doesn't make up for the stealing.
The more you regulate a company, the worse its products become.
No matter what manipulations the wealth goes through, the fact is he's still giving it away.
But that's exactly my point: he's not. In every sense that matters, he's investing it. Which is a far, far better thing than giving it away. He has a vested interest in a thriving market economy peopled by healthy, educated, productive (not dead or dying of hideous diseases) folks, and he's spending the money towards that end. As we've seen over and over again, simply giving it away not only doesn't really help, it usually makes matters worse.
Don't disappoint your bird dog. Go to the range.
Lol, that's likely. Call me up when there is no need for contributions to charities.
They aren't out to save people, they're out to save humanity. If they can do it sooner, rather than later, isn't that better for everybody?
He had a monopoly position in operating systems that made it literally impossible to buy computer equipment without giving Microsoft money.
You're slandering one of the greatest philanthropists of our generation with an outright lie.
Fuck you.
Quite frankly, it's his money...and since he's decided to give it to charity he should be able to decide what charities to give it to. Technically speaking he could just burn it all to keep his house warm, or buy millions of hookers. Even if he had spent a billion dollars on Christian education that still isn't anywhere near what he gives to everything else. I think respect should be given where it's due, as much as I don't like Microsoft, Bill Gates is giving a lot of money that he earned willingly to help those less fortunate. Thanks Bill, keep it up.
By stipulating that all fund be distributed in a set period of time, Gates avoids this problem.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
" to say he lives in relative modesty (my beef is with the word relative) is going a tad far."
Bill Gates
_____
Approximate net worth: $46 billion
Cost of home: $97 million
His home is about 1/470th of his net worth.
Jennifer Lopez
_____
Approximate net worth: $255 million
Cost of her Miami home, now sold: $11 to $14 million, depending on who you listen to. Let's take $11 million to make her look less ridiculous.
Her home was 1/23rd of her net worth.
This is why people say Gates lives modestly relative to his worth. If he'd spent like J. Lo, his home would have cost 2 billion. I don't know what you'd build with that. A marble pyramid?
Yes because the work done in the fight against, say smallpox, is of no use to you at all since there are other diseases. I guess we should just introduce the virus back into the wild since all those other diseases mean there's no benefit to the current generation from the work to eradicate it.
I think foundations go stale after a while, and perhaps that's why they're doing this. If you allow a foundation to exist perpetually, it has to spend a certain about of effort worrying about how to best invest its money to keep going. Why not set an end date (or, to use one of the more annoying recently made-up terms, allow it to "sunset") and just let it burn bright and hot for a prescribed period of time? Say what you will about Microsoft, but Bill Gates has some truly fantastic ideas about money. The quote about his kids (something along the lines of, "I will leave them enough that they can do anything, but not so much that they can do nothing"), some of the things he's doing with the foundation itself (including this now), and so on, lead me to believe that he's really giving this a lot of thought himself (instead of attaching his name for tax purposes to a foundation that is then run by professional Foundation People).
Could also be that he feels like his legacy should last only a prescribed period of time -- why hold future generations to your ideals? It could be that he trusts future generations to figure out money and what's important for themselves. Or not -- just an errant thought.
I have long been a defender of Bill Gates on his philanthropy -- most of my friends (the Linux geeks in particular, but everyone) seem to think he's not giving enough of his fortune. But if you give it all now, it won't be there later to give more. Could be that ten years from now, the most pressing need in the world will be to rebuild the educational system in the Middle East (after the U.S. bombs the bananas out of the Muslim nations). Or maybe AIDS research will need just a billion dollars more. Or Parkinson's. Or something as bad as AIDS that we don't know about yet. Or whatever. But if he had gone ahead and spent all of it on Africa, he couldn't be effective later.
This, when coupled with the 50-year idea, may well create a nice middle-ground response where they can give generously now but will still have enough scratch to give to something they can't anticipate right now. And if you can budget for how long your finite foundation will last, maybe you can give more every year until it burns out instead of constantly worrying about reinvesting. Wouldn't it be great if a foundation had more people employed to spend money on need than to raise it?
The man's foundation is giving 1.75 BILLION dollars a year (an amount larger than the GDP of a lot of countries, if my almanac is accurate). They've committed to double that in the next three years. I see no reason to nitpick about how he does it. AIDS treatment, education, community development, and a lot of it in Africa, where more people are forgotten every day than are born around the rest of the world. If someone wants to get more aggressive and pony up more money for African nations than Bill Gates, go for it -- none of the other few people who can seem to be doing it, though.*
And on that note, good for Warren Buffett -- attaching his fortune to another of equal size increases its power exponentially.
* What's Wal-Mart giving? I don't know -- I'm actually asking. But I bet it's less than $3.5 billion.
It is pitch black. You are likely to be eaten by a grue.
For all the crap he gets here, its never been about the money with Bill. He lives in relative modesty for his income and has always maintained that his kids would only inherit a small portion of his wealth with the bulk to be used for charitable causes.
Sigh. More crap.
Why would you assume it has to be about money? Most all of the old time mob dons lived in modest circumstances. Come to think of it, many of the newer ones do as well. Child abusers generally love kids, and they also like living in nice neighbourhoods. John Wayne Gacy enjoyed his meals, rapists can enjoy sex, and there's many a loving father and mother out there that regularly beat their kids.
As for Bill, I don't consider it a stretch for anyone to conclude that for him, it's always been about control. The money is secondary, but serves validate his position. And what's in his will for the kids is of little bearing. Personally, I think it's A Good Thing that he contributes to worthy causes and engages in philanthropy (what the hell else is he going to do with all the cash and the free time he now has on his hands), but it's fair game to offer criticism with respect to his past and present actions. Put another way, I still think he should go fuck himself.
So now that we're clear that something not being about money can still be A Bad Thing, I'm left wondering about the financial aspects of the decision. The "puts a lot of money back into circulation that otherwise would just be sitting there earning income" summary sounds a bit simplistic, given that lots of foundations started by other monopolists are around and kicking, contributing to the general benefit of society. If they all spent their money at once, who's left to fund anything?
Personally, if it were me, I would invest my wealth in technology. Technology and innovation usually pays back to society an order of magnitude, or more, over time. Look at the money invested by the likes of Edison and Westinghouse and Bell over the turn of the last century. Also look at the return dollar for dollar spent on things like the Apollo program.
The only humanitarian type of place I would spend my money however might be on meritorious/aptitude scholarships. I don't believe on giving anyone anything without some sort of effort/meet-me-part-way on their end, as that tends to enable poor choices and unproductive behavior. It's the old fish vs teach to fish quip.
Libertas in infinitum
Would you please prevent the person who modded the parent Troll from getting mod points again? There are some other earnest posts in this story's discussion which were also unfairly modded Troll or Flamebait, and I suspect it was the same person.
Me
_____
Approximate net worth: $100 Thousand
Cost of home: $200 Thousand
My home is about double of my net worth.
Horrible comparison. The less money you earn the greater percentage of income that goes towards your primary residence.
It is important here to draw a distinction between the behavior of Bill Gates and the Microsoft corporation. For all intents and purposes, the two are severed. Steve Ballmer is the figurehead of Microsoft now; he has elected to take responsibility for the direction of the corporation, and we should hold him to that responsibility. At this point, Bill Gates is just a wealthy man, and a wealthy man giving a percentage of his money to charitable causes is not unprecedented.
My point is that I do not believe that Mr. Gates' contribution absolves Microsoft of its unethical business practices, at least since Gates passed executive control of the company to Steve Ballmer. I applaud Bill Gates' contribution, let me make myself clear. It does not, however, give the company an indefinite license to stifle innovation in the software market. While giving to humanitarian causes is a noble gesture, software is important, and will become remain so in the near future.
For example, consider the field of bioinformatics - the application of the computing sciences and biology to solve complex problems in medicine and related fields. It is possible that innovation in software could produce a cure for AIDS, or cancer, or anything else, just as much as a charitable foundation can. In fact, some of Gates' money could be going to fund research in some of these areas. If the Microsoft corporation continues to vigorously fight to maintain its monopoly and forestall non-Microsoft innovation, then Bill Gates and Microsoft are indeed fighting for opposite causes.
With regard to government, since to have civilization we must have some government, the proper principle is that the damage that can be prevented by using the stolen money must be worse than the damage that is stealing the money. Murder is worse than theft, and murder can be discouraged in a cost-effective manner by paying police with tax money. Dropping a gum wrapper on the sidewalk is not worse than theft, and paying a policeman to agressively patrol against minor littering is not cost-effective.
Contribute to civilization: ari.aynrand.org/donate
would be to ensure the foundation doesn't carry on forever, supporting professional trustees and dribbling the interest out bit by bit.
There are many problems this money can solve now, as Gates seems to realize. Also, if you are embarking on a campaign to erradicate certain diseases, you only need to do it once. In face it's not that you only need to do it once, it's if you did try to do it a bit by bit, you'd never succeed.