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."

Comments

The funds may live forever

[davidwr]

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.

Re:The funds may live forever

[Anonymous Coward]

"How many endowed research programs will this money go to?"

Prick up your ears, boy, start by searching for "well endowed" on AltaVista or Google! You'll come to huge surprises!

Seems like a waste

[Jekler]

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.

Re:Seems like a waste

[jadavis]

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.

But foundations have a tendency to lose their way quickly after the benefactors die. There are no reality checks when it comes to a foundation, there is no feedback cycle that keeps them healthy.

Look at the Nobel Prize. It's more of a political organization than anything else.

Re:Seems like a waste

[Jekler]

I agree that foundations have a tendency to have their original intentions become distorted. I just think there should be some way to preserve it without complete dissolution being the best course of action.

A side note: Not sure how I ended up getting modded troll, that seemed odd.

Re:Seems like a waste

[jadavis]

I just think there should be some way to preserve it without complete dissolution being the best course of action.

"Should" is not a useful word in the real world, unfortunately. A foundation is insulated from all external pressures. This can be good in some cases, but it ultimately leads to uselessness of the foundation.

Everything is a tradeoff. When a foundation spends a dollar, that means the foundation is liquidating $1 worth of capital and labor in the marketplace. If they spend enough money, people lose their jobs, factories shut down, and new businesses are unable to find the resources (capital and labor) to start up.

Of course, that dollar is hopefully spent wisely. If it is spent wisely, the benefits will outweigh the aforementioned costs. With someone like Bill Gates in charge, I'm sure those dollars are spent wisely. After he dies, who will make sure the dollars continue to be spent wisely? There is no feedback cycle to correct the course when they start making bad choices. Businesses do have a feedback cycle: their resources are taken away from them when they become inefficient.

Donating to charity, although it makes you feel good, can actually be bad for society unless you make SURE your resources are used more wisely than where they were before.

The best economic thing a normal person can do for society is to produce as much as possible, and consume as little as possible. It's simple, but rarely said. However, here in the US (like most countries), we tax production and not consumption (or very little, anyway). There are a million ways to make consumption taxes progressive, just like income taxes, but without the problems associated with taxing production.

Re:Seems like a waste

[Anonymous Coward]

One great example: Borges..especially some of the Nobel prizes (such as literature) are mostly given to people with certain political affiliations..

Re:Seems like a waste

[Sapphon]

There are a million ways to make consumption taxes progressive, just like income taxes, but without the problems associated with taxing production.

Really? My taxation professor would be very interested to know about them, I'm sure. Could you provide some sources (preferably academic)?

How, for example, could one overcome the problem that, as the income/consumption ratio is not constant (i.e. the more people earn, the lower the proportion of their earnings they spend on consumption - an empircally proven statement), broadly taxing consumption is necessarily regressive?

High-income earners don't have a consumption basket so vastly different from low-income earners that it is possible to target them on the consumption side to any significant degree; while one can certainly tax luxury goods, the very nature of those goods means their demand elasticity is high enough that the tax burden falls not on the consumer, but the producer.

Aside from your last paragraph, I agree with your post. Donating to a wasteful charity can be worse than spending the same money locally, or putting it aside for the capital market to use. However, most large charities have recognised this and publish breakdowns of their spending (both by project goal and administrative expenses), so it's relatively easy to make an informed choice.

Re:Seems like a waste

[jadavis]

Food is wasted at fast-food restaurants while people starve outside.

Of course businesses aren't 100% efficient. You could pick 1000 other examples. However, the point is that there IS negative feedback that limits how inefficient the business can be. If they sold one meal for every 1000 they threw away, that business would be liquidated by the shareholders and the shareholders would replace it with another more efficient business. That's called negative feedback, and it keeps businesses on the track of efficiency.

the real world is not the happy ideal world of the proof of capitalism's efficiency

The point of capitalism is not that it's perfectly efficient, but it allows correction when things become inefficient. Governments, schools, and foundations have much less in the way of feedback, and what feedback does happen is MUCH slower and MUCH less direct. If the government needs to move in a new direction, it takes YEARS to get new representatives, new bills, and new votes. By that time the correction is long overdue, and everyone's way off course. Also, by that time, the issue has been combined with so many other issues that a voter cannot logically separate the issues or determine causation as easily.

If a business gets a little off-course, people get fired, capital is liquidated, and people are laid off. Those resources are then free for use by another company. This can happen to even a large business in a quarter year, and a smaller business in a few days.

Also, under capitalism, generally the people with the most direct knowledge of a matter and the most interested parties are the ones making the decisions. That information is very valuable, and the processing of that information can't be done by a small group effectively. Capitalism works because the entire population is processing information around them constantly. A small fraction of the population simply can't collect and calculate the information quickly enough to be more efficient than capitalism. That's why socialism fails, and will continue to fail until they solve that problem.

As for producing rather then consuming, it's rather hard to justify useless work as being efficient.

Useless work is not production. Production is creating something that is demanded (by yourself or someone else).

Oh, and shouldn't we welcome high unemployment rates as proof that we all have time to spare and still make all the goods we need?

Nice try. You're using two different definitions of "unemployment". The economic definition is "people looking for work". If they are looking for work, that probably means that they are consuming without producing. That is undesirable because, as I said, we want people to produce more than they consume. In capitalism, there is negative feedback for not working, in specific, if you don't work you are eventually prevented from consuming.

Re:Seems like a waste

[Jahz]

Chances are that 25 years after the Gates die, the foundation will decide that it doesnt want to die and start to fund raise from the rich and powerful moguls of the world. They've already taken a 40 (i think it was 40) billion dollar endowment from a stock billionaire. Who says other ridiculously wealthy people won't also donate unthinkable quantities of money in the future?

Re:Seems like a waste

[arcade]

I used to agree with you, until I read an excellent article in The Economist which changed my perspective. If you take a look at:

http://www.economist.com/printedition/index.cfm?d= 20060701

It's the leader article. Unfortunately it's subscription only, but I think it's fair use to snip the last paragraph, which Bill seems to have taken to heart, and repost it here:

"The second danger lies in the vanity of philanthropists. They often like the notion that their foundations will live on after them, carrying their name down from generation unto generation. But, after the founder has died, foundations tend to become sclerotic and directionless--the fiefs of administrators who have lost sight of the original aims. So if you aim to be a truly philanthropic philanthropist, spend your money fast: do as much good as you can when you're alive, and let posterity go hang."

I think we can conclude that Bill reads the Economist. :p

Redistributing the wealth

[i_should_be_working]

One thing I really like about the philanthropic gestures from the Bill and Melinda foundation is that their fortune is new money and it all came from selling software to the middle class or above. It's literally taking (willingly) from the rich and giving to the poor.

Re:Redistributing the wealth

[ScentCone]

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.

Re:Redistributing the wealth

[Surt]

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.

Re:Redistributing the wealth

[troll -1]

Most it came from an illegal monopoly

Re:Redistributing the wealth

[Surt]

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.

Re:Redistributing the wealth

[LaughingCoder]

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.

Re:Redistributing the wealth

[ScentCone]

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.

Re:Redistributing the wealth

[ChrisMaple]

"Doing some good with the money you stole from people doesn't make up for the stealing."

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.

Re:Redistributing the wealth

[Profane MuthaFucka]

I've got another account. Maybe he would rather buy a computer from that guy?

I actually agree with that decision...

[jejones]

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.

Charities should go away after a while

[Anonymous Coward]

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.

Re:Charities should go away after a while

[Jekler]

Mr. Gates has proven Machiavelli correct. As time marches forward, critics of Microsoft and Bill Gates are changing their tune; what Mr. Gates ultimately does with his wealth is more important than where it came from or how he got started building the wealth. Anti-trust violations, corporate bullying, it's acceptable so long as you later form a charity.

Re:Charities should go away after a while

[Anonymous Coward]

Somehow bundling IE with Windows doesn't seem as morally objectionable as employing child slaves to make shoes or something like that. Most people wouldn't find MS's offenses objectionable at all, that's a small minority here on Slashdot. Do you think breaking one law is the same as breaking any law? I see Bill Gates as a middle class college dropout who worked his ass off and is now going to help a lot of people. What can you say for yourself? What can I say for myself?

Re:Charities should go away after a while

[metlin]

Anti-trust violations, corporate bullying, it's acceptable so long as you later form a charity.

It is the degree of committing something wrong.

You see, if I commit a traffic violation and if I save a man's life, does it really matter?

Now Microsoft's business practices aren't particularly wonderful, but if at the end of the day, if it could help save millions of lives and help improve the quality of life for people across the world, then I honestly don't give a damn.

Secondly, Bill Gates != Microsoft -- the latter is a corporation, and all corporations always have one motto - improve share holder value by working on the bottomline. Microsoft is no exception, and if a part of that profit is being used to help the *really* needy, then so be it.

The way I see it is that all the whining about business practices is for the rich (i.e. a society that has enough money to afford computers and expensive software) and Bill using this money to help the poor. Of course, since _you_ are the rich being ripped off, you don't quite see it that way.

Bill is a geek who was shrewd enough to hack the system to make money out of it, and he is giving it to the poor. More power to him.

I'd rather have someone like him than someone like, say, Larry Ellison or Sam Walton.

I mean, look at Larry Ellison's charity track record -- there is nothing stopping Bill from doing the exact same thing. But instead, he is using it for not just *some* good, but a lot of good.

Re:Charities should go away after a while

[metlin]

Wow, what a troll.

Well, is speeding over the speed limit comparable to killing a man?

Sure, you break the law in both cases but the conditions and consequences are different.

Bill is breaking the traffic rules but saving people's lives -- while he's definitely breaking the law, I'd rather have him break the speed limit and help save people's lives than not.

Get some perspective, people. Perspective.

Life is bigger than software, and I cannot believe that folks are comparing antitrust violations and business practices with raping and killnig babies. Sheesh.

Re:Charities should go away after a while

[Jekler]

No speeding is not comparable to killing a man. But actions don't become better just because there's something worse.

If someone steals $10,000 from you, and you find out some time later he's started his own business, living quite well in a Florida condo, and he's running an animal shelter, do you tell him what a great guy he is?

Re:Stupid

[b0s0z0ku]

Why not setup a trust that just spends the interest on the earnings.

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.

Re:Stupid

[Mateo_LeFou]

Something tell me that the guys who run multibillion dollar foundation might've thought of that. My guess is that the principle could do more good in the hands of organizations (especially, IMO, OLPC ;) than sitting in a bank. That is: even more good that the interest the bank pays on it.

Re:Stupid

[maxume]

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.

Let's see...

[ScentCone]

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.

Fair play

[Timesprout]

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.

Re:Fair play

[value_added]

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?

Bill Gates Assassinated By African Assassin

[b0s0z0ku]

Suspect says: we want our money now! (Dateline Redmond, WA January 2007)

-b.

Re:Stupid

[daeg]

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.

Why.

[OrangeStar]

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.

What I think Bill Should Do

[ThomasFlip]

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.

Re:What I think Bill Should Do

[maxume]

Cheap energy costs about $1000/KW (yeah, yeah, $1/W, but the quotes are all in KW) to install, so $50 billion translates into about 50 GW of power, a huge number no doubt. To put it in perspective, the most recent estimate a bit of googling spits out for yearly, worldwide energy consumption is 338 exajoules, which about 11000 Gigawatt-Years. That's a really huge number.

Given that $50 billion represents about 2 days worth of economic activity in the US alone, it isn't real important what they do with this particular $50 billion, especially in relation to a task as monumental as providing energy for a global civilization.

Re:What I think Bill Should Do

[sakusha]

Is build renewable energy infrastructure.

Funny you should mention that. He's doing just the opposite. Gates just bought 10% of PNM Resources, a gas and electric utility in Arizona. They don't do renewable energy.

Gates also owns major portions of Home Depot, Canadian National Railway Co, Republic Services (a garbage hauling company), several TV networks, Four Seasons Hotels, Berkshire Hathaway, and several Big Pharmaceutical companies. This is not the profile of an enlightened investor. These are the investments any Robber Baron would make to diversify his holdings.

Keep your eye on Cascade Investments LLC, that's Gates' personal holding company. He's still building his personal fortune, leveraging his monopoly into more areas.

Good, but why buy Newspapers Today?

[twitter]

It's great to see them want to spend ALL of their money on charity and that they will liquidate their assets to do so. A cynical person might say that any large pile of money will attract people more interested in themselves than the charity's mission. Making the organization spend them money will insure the money goes to the immediate purpose.

Given such intents, it's strange to see the foundation money spent buying independent newspapers. The Contra Costa Times and the San Jose Mercury News don't seem to have much to do with AIDS.

Save 100 lives today, or one a year for 100 years?

[MDMurphy]

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.

Idiotic Foundations

[Baldrson]

Any rich guy who leaves his money in a foundation rather than in escrow for a set of objective prize awards, such as the X-Prize, has no recognition of the failed history of foundations.

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.

Re:Stupid

[PCM2]

If the goal is to help people wouldn't it make sense to help them in perpetuity instead of just for the next 50 years?

If they invest money toward finding cures for diseases, they are helping people in perpetuity.

Re:Never forget.

[bheer]

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.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Stupid

[Anonymous Coward]

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.

Re:Stupid

[Anonymous Coward]

They tend to invest in doing things that will persist for generations

Like Creationist education?

(Also: why does this get modded down to Troll or Flamebait almost instantly, whenever I post it? Is it unreasonable to question where some of the Gates/Buffett largesse is going, considering how much Gates rambles on about the importance of science education to future US competitiveness?)

Mwaha

[teknokracy]

So wait.... we have to kill Bill and Melinda to speed up the process??

Re:Stupid

[BoomerSooner]

Lol, that's likely. Call me up when there is no need for contributions to charities.

Re:Save 100 lives today, or one a year for 100 yea

[DrKyle]

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?

Re:Stupid

[Steppman2]

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.

Great

[Anonymous Coward]

Let's have some more illegal monopolies then! It's good for the world!

Wise Move:Foundations Often Violate Founder Intent

[Nova Express]

This is a wise move on the part of Gates. Time and time again we've seen foundations who violate the intent of the founders, being captured by the bureaucrates running the foundation, who then channel the foundations way from the donor's intent and toward that of the (usually liberal) causes currently fashionable among foundation-running elites. The Ford Foundation and the McArthur Foundation, among many others, have fallen victim to this. A particularly egregious recent example, of course, was funds from The Gloria Wise Boys & Girls club being illegally diverted from charity and into propping up the now-bankrupt liberal radio network Air America.

By stipulating that all fund be distributed in a set period of time, Gates avoids this problem.

Re:Stupid

[sholden]

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.

Re:Stupid

[eck011219]

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.

Technological Investment

[SonicSpike]

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.

Damn

[alexjohnc3]

I was hoping Bill Gates would spend a lot of his money in research for increasing longevity. I guess he's planning on dying at an average age then...

Bill Gates != Microsoft

[slapys]

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.

Re:It is convenient you left off Pacific Ethanol

[sakusha]

I hadn't heard of that one, but I checked it out and PE is literally a drop in the bucket, compared to Gates massive holdings in conventional energy from gas, coal, and nuclear. The PE investment is $84 million, nobody quite knows the full extent of his other energy deals but I read estimates of over $750 million just in this year alone.

I'd have thought the 50 years

[goldcd]

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.