Caare Spotlight #1: Gates Foundation

June 24, 2013 at 10:41 pm

Gates Foundation LogoORGANIZATION

DEFINITION: A private charitable foundation, founded in 2000 and headquartered in Seattle, which aids in global health.

ESTABLISHMENT AND PURPOSE

In January, 2000, Microsoft founder and chief executive officer (CEO) Bill Gates and his wife Melinda established what has become the world’s most lavishly funded charitable foundation. The Gateses earmarked five billion dollars for the foundation in June, 1999, following this with a contribution of $106 million in 2000. By June, 2006, with additional funding from the Gateses, the foundation’s endowment reached $29.2 billion.

The endowment was enhanced substantially on June 25, 2006, when Warren Buffett pledged to the Gates Foundation ten million shares of Berkshire Hathaway class B stock, worth $30.7 billion on June 23, 2006, the most substantial charitable donation in American history. This contribution, spread over several years, gives the Gates Foundation the largest endowment of any existing foundation. Even before Buffett’s gift, its assets exceeded the gross national product (GNP) of more than one hundred nations.

The Gates Foundation provides funding in one miscellaneous and four specific categories: global health, education, libraries, and the Pacific Northwest. Its outreach, particularly in health, is worldwide, with special emphasis on improving medical facilities, training medical personnel, and enhancing medical education. It emphasizes prevention through education, inoculation, and therapeutic management of such endemic diseases as acquired immunodeficiency syndrome (AIDS), malaria, and poliomyelitis.

ORGANIZATION AND MANAGEMENT

Despite its size and complexity, the Gates Foundation controls overhead expenses scrupulously. Its emphasis is on assisting those who most need help, with minimal bureaucratic interference. With a worldwide toll of over a million deaths yearly from malaria, two million from tuberculosis, and three million from HIV/AIDS, a daunting task faces the Gateses’ global health outreach.

Buffett’s contribution stipulates that the foundation must continue qualifying as a charitable organization and must distribute an annual amount at least 5 percent more than the previous year’s Berkshire contribution. Federal laws governing charitable foundations require them to distribute 5 percent or more of their assets every year.

Even before Buffett’s contribution, this government regulation forced the Gates Foundation to distribute approximately a billion dollars every year. When Buffett’s total contribution is added to the original endowment, the foundation will be required to distribute over two billion dollars a year to qualify as a charitable foundation.

As the foundation was originally organized, Bill and Melinda Gates were actively involved as cofounders, although the demands on Bill Gates as CEO of Microsoft limited the time that he could spend overseeing the foundation. On June 15, 2006, Gates announced that after July 31, 2008, he would reduce his involvement in the day-to-day operation of Microsoft and would direct most of his energies toward overseeing the foundation.

Gates’s father, William H. Gates, Sr., has served as cochairperson of the foundation since its founding, as has Patty Stonesifer who, besides being cochairperson, is president and CEO of the Gates Foundation. The foundation in mid-2006 had 241 full-time employees, a modest number for such a complex organization.

SCOPE AND IMPACT

Because Microsoft’s corporate center is in Seattle, one of the Gates Foundation’s priorities, to sponsor projects affecting America’s Northwest, reflects the Gateses’ loyalty to that area. The overall scope of the organization, however, is truly global with special emphasis on the developing world, with its daunting health problems, notably HIV-AIDS, malaria, diabetes, and polio.

In October, 2000, the Gates Cambridge Scholarship Program, established with a grant of more than $200 million, enabled promising graduate students from outside the United Kingdom to study at Cambridge University, a program that every year subsidizes one hundred new scholars. The Gates Millennium Scholars’ Program, with funding of one billion dollars, is administered by the United Negro College Fund and provides scholarships for minority students in the United States.

The students in these programs frequently pursue careers related to world health. The foundation’s awards of $800 million a year for global health almost equals the annual budget of the United Nations’ World Health Organization (WHO). The greatest international impact of the Gates Foundation clearly is in global health.

On October 25, 2005, the foundation gave the Global Alliance for Vaccines and Immunization $750 million to underwrite its vaccination programs. A grant of $30 million helped to establish a new Department of Global Health at the University of Washington aimed at preparing health professionals—physicians, paramedics, nurses, social workers, and psychologists—to work with the impoverished on the prevention and treatment of diseases prevalent among them. This grant enabled the University of Washington to hire fourteen new faculty members and to support more than four hundred graduate students and staff.

The Gates Foundation has contributed nearly $300 million to be divided among sixteen teams doing HIV/AIDS research throughout the world. This gift requires that all these teams share their findings with other teams.

The foundation provides funds to help organizations dealing with emergencies such as the 2004 Indian Ocean tsunami and the 2005 earthquake in Kashmir. This funding enables medical professionals to deal with the health problems that accompany such disasters.

Some conservative critics fear that the money the foundation awards will fall into the hands of unscrupulous politicians. The wisdom of throwing money at problems in the developing world, where graft is rampant and distribution is questionable, has been viewed with skepticism in some quarters. Critics suggest that helping the developing world form stronger infrastructures and develop work opportunities for the unemployed might help