Bill Gates’s Charity Races to Spend Buffett Billions - New York Times

[Owen Densmore]

Oops -- I didn't realize Buffett was also involved!
   http://www.nytimes.com/2006/08/13/us/13gates.html?hp

Text attached.  But pix @ NYT cool too!

As much as I dislike Gates, its kinda encouraging that two of the  
wealthiest dudes in the world have decided to give most of it away.  
I'm not yet an optimist, but .. maybe?

     -- Owen

Owen Densmore
http://backspaces.net - http://redfish.com - http://friam.org

Bill Gates?s Charity Races to Spend Buffett Billions

By STEPHANIE STROM
Although it has long been the largest grant-making foundation in the  
nation, the Bill and Melinda Gates Foundation is facing an  
unparalleled challenge: how to give away more money ? and do it much  
faster ? than it ever has before.

Largely lost in the June announcement of Warren E. Buffett?s gift of  
$31 billion to the foundation were its terms. For tax reasons,  
starting in 2009, the foundation must give away every nickel that Mr.  
Buffett contributed in the previous year.

At the current price of the Berkshire Hathaway stock Mr. Buffett will  
be donating, the foundation will have to distribute $3 billion  
annually, or a little more than twice what it distributed last year.

?It?s like having a second child,? said Dr. Helene D. Gayle, who left  
the foundation this year to become president of CARE USA, the  
international relief group. ?It?s not just twice the amount of work;  
rather, things change in vastly different ways.?

In the next two years, the foundation plans to double its staff to  
about 600 people to handle the additional money, said Cheryl Scott,  
the foundation?s new chief operating officer, and it is building a  
new headquarters complex in Seattle. ?We?re very thankful for the two  
years he gave us to ramp up,? Ms. Scott said. ?I think he understands  
that you don?t just turn this kind of thing on and off.?

?I?ve been a manager for close to 30 years, and this is a well-run  
organization,? Ms. Scott added, ?but if you put that kind of a load  
on the current process we have, it?s not going to carry it through.?

The foundation has said it intends to continue to focus its  
philanthropy on education and global health while adding a new area,  
global development, to help the poor in third world countries. Before  
Mr. Buffett?s donation, the Gates Foundation had assets of almost $30  
billion.

Dr. Gayle said the foundation?s way of doing business had evolved  
from its early days, when it believed in giving out a few large  
grants, rather than many small grants, to avoid building a huge staff  
and becoming a big institution. Now, she said, it has a more formal,  
structured process. Increasingly, it creates horse races among  
potential recipients through requests for proposals, more like a  
business, Dr. Gayle said.

?That takes time and is very hard to do piece by piece, project by  
project when you?re trying to get that much money out the door,? Dr.  
Gayle said. ?In addition to the traditional approach of requests for  
proposals for specific projects, they may need to look at ways of  
giving out money over longer terms and turning to institutions that  
have the capacity to spend large resources.?

Externally, the immensity of the amount the foundation will have to  
give away each year is reviving debate about its size and influence.

?One out of every 10 foundation dollars spent is going to have the  
Gates name on it, and that gives it influence that is impossible to  
calculate,? said Rick Cohen, executive director of the National  
Committee for Responsive Philanthropy, a research group.

?And as currently structured, just four people are deciding how to  
spend all that money,? Mr. Cohen said, referring to Mr. and Mrs.  
Gates; William Gates Sr., Mr. Gates?s father; and Patty Stonesifer,  
the foundation?s co-chairwoman and president.

Mr. Cohen and others said the large amount of money also allowed  
governments and other donors an excuse not to spend their money.

In its 2007 budget proposal, for example, the Bush administration  
eliminated a $93.5 million program to underwrite the development of  
smaller schools, specifically citing the increase in support for  
those schools from ?nonfederal funds? from the Gates Foundation and  
the Carnegie Corporation.

Then there is the issue of accountability. Foundations by and large  
police themselves because of the paucity of federal and state  
resources devoted to oversight of the nonprofit sector.

The Gates Foundation goes further than most in revealing its warts.  
Its Web site acknowledges various missteps and challenges, be they  
unexpected complications in starting its AIDS-related program in  
Botswana or problems with its efforts to develop small schools. Its  
new headquarters will have a visitors? center, a first for a major  
foundation.

?There is skepticism about whether a foundation can be a responsible  
and effective steward of this kind of money,? Ms. Scott said. ?For  
us, it?s a question of teeing up the issue squarely, because it is a  
real one, and telling the story as fully and openly as we can. We do  
not want to be a black box.?

Others say the critics? concerns are overblown because influence can  
be achieved with even small amounts of money.

?It doesn?t take billions of dollars to influence public policy,?  
said James Allen Smith, a philanthropic historian at Georgetown  
University. ?It can be done with tens of millions or even a  
strategically placed few hundred thousand.?

Dr. Smith said that although the Gates Foundation grants were  
typically many times the amount of an average foundation?s, its  
donations paled in comparison with spending by government-financed  
organizations like the National Institutes of Health, which has an  
annual budget of $29 billion.

Foundation officials make the same point.

?It?s still, in absolute terms, a small amount of money, given the  
problems we?re working on,? said Raj Shah, who oversees the  
foundation?s new financial services for the poor and efforts to  
improve agricultural productivity. Mr. Shah said the foundation?s  
primary focus was on some 550 million households in the world that  
survive on less than $2 a day.

Mr. Shah?s responsibilities include a new global development program.  
It is concerned with making financial and agricultural advances, and  
water and sanitation improvements for the poor. In Malawi, the  
foundation has underwritten the purchase of thumbprint readers used  
in establishing savings accounts for the rural poor.

The new endeavors, which grew out of a 16-month review aimed at  
determining how to expand the foundation?s operations in ways that  
complement its work on global health issues, give it new  
opportunities to spend its money.

Dr. Gayle said the foundation?s work had been evolving in the past  
year to include broader goals. In reproductive health, for example,  
it has been moving beyond grants supporting the delivery of services  
to broader goals like reducing maternal mortality, increasing access  
to contraception and providing education to girls.

The foundation had begun working toward an expansion more than a year  
before the Buffett gift was announced. The Gateses have long said  
they intend to give much of their fortune, pegged at $51 billion by  
Forbes magazine, to the foundation, and Mr. Gates is ceding day-to-
day control of Microsoft to devote himself to foundation work.

[Bill Eldridge]

I don't necessarily dislike Bill Gates.
I am a bit worried about "too many eggs in one basket" or the
lower diversity by putting the extra funds into one charity mindset.
Charities do some things well, but can have blind spots - and
it seems there's some complaint already with the Gates Foundation
concerning support in Africa - basically what kind of charities
can get support, how it distorts the (non-)market, what extra
burden/hoops, etc.

I also am not sure that Salvation Army's done so well by getting
Ray Krock's wife's money. As we probably all know, bigger is
not necessarily better.


Owen Densmore wrote:

> Oops -- I didn't realize Buffett was also involved!
>    http://www.nytimes.com/2006/08/13/us/13gates.html?hp
>
> Text attached.  But pix @ NYT cool too!
>
> As much as I dislike Gates, its kinda encouraging that two of the  
> wealthiest dudes in the world have decided to give most of it away.  
> I'm not yet an optimist, but .. maybe?
>
>      -- Owen
>
> Owen Densmore
> http://backspaces.net - http://redfish.com - http://friam.org
>
> Bill Gates?s Charity Races to Spend Buffett Billions
>
>