Gates Foundation To Spend All Its Assets 319
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."
The funds may live forever (Score:5, Insightful)
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.
Seems like a waste (Score:5, Insightful)
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.
I actually agree with that decision... (Score:5, Insightful)
Charities should go away after a while (Score:2, Insightful)
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:Stupid (Score:3, Insightful)
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 (Score:5, Insightful)
Let's see... (Score:5, Insightful)
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.
Re:Stupid (Score:5, Insightful)
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. (Score:5, Insightful)
What I think Bill Should Do (Score:5, Insightful)
Re:Charities should go away after a while (Score:5, Insightful)
Re:Redistributing the wealth (Score:5, Insightful)
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.
Save 100 lives today, or one a year for 100 years? (Score:4, Insightful)
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.
Re:Charities should go away after a while (Score:3, Insightful)
Idiotic Foundations (Score:4, Insightful)
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:Redistributing the wealth (Score:5, Insightful)
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:Seems like a waste (Score:5, Insightful)
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:Stupid (Score:5, Insightful)
If they invest money toward finding cures for diseases, they are helping people in perpetuity.
Re:Never forget. (Score:2, Insightful)
Re:Charities should go away after a while (Score:4, Insightful)
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 [wikipedia.org] -- 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.
Comment removed (Score:2, Insightful)
Re:Stupid (Score:3, Insightful)
Re:Redistributing the wealth (Score:3, Insightful)
I personally tend not to think of myself that way, and do my best not to act that way.
Re:Charities should go away after a while (Score:4, Insightful)
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:Redistributing the wealth (Score:5, Insightful)
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:Seems like a waste (Score:3, Insightful)
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:Redistributing the wealth (Score:4, Insightful)
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:Charities should go away after a while (Score:3, Insightful)
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 (Score:3, Insightful)
Re:Save 100 lives today, or one a year for 100 yea (Score:4, Insightful)
Re:Redistributing the wealth (Score:2, Insightful)
You're slandering one of the greatest philanthropists of our generation with an outright lie. [apple.com]
Fuck you.
Re:Stupid (Score:2, Insightful)
Wise Move:Foundations Often Violate Founder Intent (Score:4, Insightful)
By stipulating that all fund be distributed in a set period of time, Gates avoids this problem.
Re:Fair play (Score:1, Insightful)
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?
Re:Stupid (Score:3, Insightful)
Re:Stupid (Score:5, Insightful)
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.
Re:Fair play (Score:3, Insightful)
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?
Technological Investment (Score:3, Insightful)
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.
ATTENTION ADMINS (Score:1, Insightful)
Re:Fair play (Score:1, Insightful)
_____
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.
Re:Seems like a waste (Score:2, Insightful)
Re:Seems like a waste (Score:3, Insightful)
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.
Bill Gates != Microsoft (Score:2, Insightful)
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:Redistributing the wealth (Score:5, Insightful)
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:Seems like a waste (Score:3, Insightful)
I'd have thought the 50 years (Score:3, Insightful)
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.