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.
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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 (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.
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.
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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 (Score:5, Informative)
"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.
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That's just not true. Food is wasted at fast-food restaurants while people starve outside. If they gave the food to the people, no one would be worse off and one person would be a little happier. So the status quo is inefficient, but no force corrects it. Businesses make profits, but the logic of competition should see the profits decrease to zero as they all undercut one another. Used-car salesmen se
Re:Seems like a waste (Score:4, Informative)
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.
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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 stat
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Please explain your reasoning.
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http://www.economist.com/printedition/index.cfm?d= 20060701 [economist.com]
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 the
Redistributing the wealth (Score:5, Interesting)
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.
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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.
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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.
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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: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.
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Did someone force you to buy a computer? No, you willingly departed with your money in exchange for a computer. Despite the way we behave around here computers are still, in fact, not a necessity of life.
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For many (or perhpas now, most) businesses, computers are necessary for life.
Besides which, your argument is ridiculous: just because something is not absolutely necessary to live does not mean that it is not a monopoly that people effectively have to buy. For example: gasolene is not a necessity of lif
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You're slandering one of the greatest philanthropists of our generation with an outright lie. [apple.com]
Fuck you.
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Let's hear your alternative. (Score:2)
To paraphrase David Kearns, no more prizes for rants, prizes only for solutions.
How would you solve the problem you perceive?
No time machines involved.
Stealing? (Score:2)
Last time I checked, MS hadn't taken from me any money that I didn't want to give them.
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I personally tend not to think of myself that way, and do my best not to act that way.
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Great (Score:2, Funny)
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While I like that the Gates' are giving away large sums of moeny to those less fortunate, we need to keep in mind that the money came from stock price appreciation caused by Microsoft's illegal business practices.
The money was not willingly given by the rich, it was stolen via monopoly-based software pricing.
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 grac
Re:Charities should go away after a while (Score:5, Insightful)
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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.
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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?
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The guy hasn't stolen money for you - you paid that money because you wanted something in return (i.e. an Operating System, an Office application or whatever). Oh, he might have been sly and cunning in making you use that software, but you always had the choice to walk away. Is it unethical? Most def
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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.
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So my inherited family fortune originally built on slavery and then bootlegging is finally respectable now! Thank a god!
Oh wait, it's always been respectable, hasn't it.
Sounds like an average member of the British aristocracy, except until recently they also got an inherited seat in the legislature (The house of Lords). They no longer get an automatic peerage, but they still have their wealth
That's the thing about wealth in America: nobody cares how you got it just so long as you got it.
As I explained above, it's not just that way in the over there States, it's the same all over the world, from here in the UK, to corrupt officials in third world governments.
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.
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Er, no. In fact, if I actually went to any trouble to scrape up the Kill Bill comments that usually come up when discussing him or his wealth or how he's giving it away, the actual quotes would be far more rabid than my hypothetical ones. The rabid reaction, which I'm looking to shame (for once!) into just chilling out, comes like clockwork from his critics here. Everyone here knows it, and anyone choosing from a thousand daily contributions here to post that
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Oh, upon rereading, I realized that I was agreeing with something more general than most people are seeing. I don't have much of an opinion about Bill Gates, perhaps due to oversaturation generated by reading several-too-many Slashdot threads on the guy. I was more applauding someone putting words to my suspicion as to why threads on topics like these usually degenerate into pointlessness.
Let me generalize the original poster's statement: Facts and events are just a blank canvas upon which we paint our
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Ah hah! A challenge! But first, let me talk about the idealogy that leads you to your comment...
But seriously, you're right, and thanks for getting my larger point. It's especially true when in comes to more polarizing topics like Bill.
Fair play (Score:5, Informative)
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As for relative modesty and relative generosity, Warren Buffet still has him beat. http://en.wikipedia.org/wiki/Warren_Buffet [wikipedia.org]
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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 nei
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Well, I'd build at least on of those things if I had $46bn
Bill Gates Assassinated By African Assassin (Score:5, Funny)
-b.
Why. (Score:5, Insightful)
What I think Bill Should Do (Score:5, Insightful)
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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 pa
Re:What I think Bill Should Do (Score:5, Informative)
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.
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A ~7% tax on imported oil would raise equal amounts of money every year in the United States while having the added benefit of reducing consumption today.
Good, but why buy Newspapers Today? (Score:4, Interesting)
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 [forbes.com]. The Contra Costa Times and the San Jose Mercury News don't seem to have much to do with AIDS.
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Although I have no idea why they're doing it, if I had a foundation, I might buy a few independent newspapers so that we at least have a couple of independent companies left to provide the news. They're all getting bought up by Tribune media, Rupert Murdoch and Knight-Ridder.
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.
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Mwaha (Score:4, Funny)
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:Wise Move:Foundations Often Violate Founder Int (Score:2)
You might want to seek counseling about that anger problem you have.
Debate? (Score:2)
The mind boggles...
Never going to happen (Score:2)
Bill Gates is a cyborg, and he will assimilate Melinda. How can you kill that which has no life? This is just a clever ruse to make people think he is a mortal human.
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.
Something we don't know here? (Score:2)
Hmm... the summary says that the foundation will spend all of its money within 50 years of Bill and Melinda dying. The headline says the foundation will spend all of its money within 50 years.
Does someone know something that Bill and Melinda don't?
Damn (Score:2, Funny)
Won't happen (Score:2)
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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.
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Maybe Bill doesn't want to give an economy theory or model a chance, maybe he just want results that he knows will happen by just spending huge amounts of cash. So far, the Bill & Me
Re:Stupid (Score:5, Interesting)
Re:Stupid (Score:5, Insightful)
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Like Creationist education [toast442.org]?
(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?)
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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.
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People will probably need more help going forward, not less. It doesn't concern me. Just my thoughts on the subject.
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Unless of course, they fix things permanently, now. Then people can need no help going forward. So instead of requiring people to live in mildly improved misery forever, they can do away with the misery altogether.
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The point is, with a concentrated effort GREAT gains can be made. With a diffuse effort, small, longer term gains could be made.
Think of money as energy. Low-level energy isn't all that useful. Concentrated bursts of energy are much more useful.
I'm not saying this plan is right or wrong, but there is definitely a debate to be had. I never questioned the wisdom of perpetual interest being the best route before, but I can see the point here; it's about more than money. You can re
Re:Stupid (Score:5, Insightful)
If they invest money toward finding cures for diseases, they are helping people in perpetuity.
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Pro-competition? (Score:2)
I know it might be crazy considering the word "Gates" here, but perhaps he's thinking that with an organization doling out > $1 billion a year, other would-be philanthropists might actually be less inclined to start new foundations? Perhaps there's an understanding that part of the reason behind some people's philanthropy is the need to be the "biggest" donor.
On one hand, having this foundation in perpetuity might create a very high bar that would only push such "competition" even higher. On the other
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:Save 100 lives today, or one a year for 100 yea (Score:4, Insightful)
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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.
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.
Money vs Wealth. (Score:2)
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