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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.
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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.
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.
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.
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.
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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.
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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.
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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.
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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.
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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.
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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.
If they invest money toward finding cures for diseases, they are helping people in perpetuity.
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So wait.... we have to kill Bill and Melinda to speed up the process??
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.
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