Bill Gates is pouring a historic $20 billion into the Bill & Melinda Gates Foundation this month to help the grant maker increase its annual giving to $9 billion by 2026. In announcing his plans, he said that he hoped other billionaires would follow suit to give generously as the world deals with continuing crises like climate change and recovery from the pandemic.
The new infusion of money, the largest Gates has ever given, will push the foundation’s endowment to $70 billion, and the surge in the foundation’s annual grant making will be a big jump up from its pre-pandemic giving of nearly $6 billion.
The amount Gates plans to distribute each year dwarfs the grant making budgets at other foundations. The next largest foundation, the Lilly Endowment made $712 million in grants in the most recent year for which data is available, according to its website.
With this latest gift, Gates has given a total of $54 billion to charity since 2000, with the bulk of that money going to the foundation and much of it donated with Melinda French Gates, from whom he is now divorced. Bill Gates still has a lot to give to follow through on his promise to donate most of his wealth: His net worth is pegged at $122 billion according to Forbes, which made that estimate ahead of the new commitment.
Gates said in a statement that he is adding to the foundation’s endowment and increasing its annual grant making to better address global crises like the pandemic, rising inflation, the war in Ukraine, and climate change.
“I hope by giving more, we can mitigate some of the suffering people are facing right now and help fulfill the foundation’s vision to give every person the chance to live a healthy and productive life,” said Gates in a statement.
The foundation plans to increase its giving incrementally each year so that it reaches $9 billion in four years, said Gates Foundation chief executive Mark Suzman. He told the Chronicle that the foundation plans to use Gates’s donation to increase grant making in areas it already supports: global health and development, gender equality, U.S. education and economic mobility, and education in low- and middle-income countries.
“We’re not looking to expand into any significant new sectors because we see the needs are huge and far exceed any of what our resources can do. That said, we definitely will be looking at areas where we might be able to strategically expand or add support,” said Suzman. “We’re looking at some areas like climate adaptation and the current food-security crisis, and we’re looking at some areas like global education, where we’ve long prioritized education domestically in the U.S., but we only have a at this stage a relatively modest international education program. So we’re not intending to expand into significant new sectors beyond looking for opportunities within those existing priorities.”
Expanded Board
The foundation has gone through many changes in the past couple of years, including the expansion of the board after the death of co-chair Bill Gates Sr. in 2020, longtime board member and donor Warren Buffett’s decision to step down, and Bill Gates and Melinda French Gates’s 2021 divorce. When the foundation donors announced their divorce, they said they wanted to add more independent voices to lead the philanthropy as it heads into the future.
In January, the Gateses announced three new board members from outside the foundation, including Baroness Nemat (Minouche) Shafik, director of the London School of Economics; Strive Masiyiwa, chief executive of telecommunications company Econet Global; and Thomas Tierney, co-founder and co-chair of the Bridgespan Group. Suzman joined the board as well.
Suzman said the new board members will have a say in the foundation’s future plans. He said the first in-person board meeting will take place in August, when the trustees will discuss the increased giving over the next four years. Another board meeting, to be held in January, will seek approval of the foundation’s new budget.
Encouraging Other Donors
From the launch of the foundation in 2000 through 2021, the year Bill Gates and Melinda French Gates divorced, the two have together given a total of more than $34 billion to their foundation, according to a Chronicle tally. They have appeared on the Chronicle’s annual Philanthropy 50 list of the biggest donors 13 times and over those years the couple became highly influential in the world of ultra-wealthy philanthropists.
They frequently work to encourage other wealthy donors to give big to charity. In 2010, for example, they worked with Warren Buffet to start the Giving Pledge, an effort to push the world’s wealthiest people to promise publicly to give at least half of their fortunes to charity.
in 2006, Buffett pledged to give shares of Berkshire Hathaway stock then valued at roughly $36.1 billion to the Gates Foundation. To date, he has given a total of $35.7 billion toward that pledge, according to the foundation. The value of Berkshire stock has soared since 2006 so Buffett will end up having given more money to the foundation than the value of his original pledge.
Beyond that commitment, many people had expected Buffett would leave most of his estate to the Gates philanthropy, but the Wall Street Journal reported last month that even though the fund has been doing extensive planning for what to do with the likely huge bequest, there were signs that the money instead would go to the Susan Thompson Buffett Foundation. As a sign of the shift, the Journal said the Buffett fund has been hiring staff at a fast pace and making plans for a big financial influx. Buffett declined to talk to the Journal except to say there were some inaccuracies in its reporting.
In his blog post, Gates said giving away $20 billion is not a sacrifice and that he feels privileged to be involved in tackling the great challenges of these times.
“I enjoy the work, and I believe I have an obligation to return my resources to society in ways that have the greatest impact for improving lives,” said Gates in the post. “I hope others in positions of great wealth and privilege will step up in this moment, too.”
That plea, say philanthropy experts, is a particularly important one in this era of escalating inequality.
“Over the last few years, especially as the personal fortunes of many billionaires exploded during the pandemic and dramatically outpaced their giving, there was a general sense that the Giving Pledge and projects similar to it that aimed to get more mega-dollars off the sidelines had stalled,” said Benjamin Soskis, senior research associate at the Urban Institute’s Center on Nonprofits and Philanthropy, which receives funding from the Gates Foundation.
“This gift seems like Bill Gates’s effort to lead by example, though it comes at a time when his own status as exemplary philanthropist is not as certain as it was in the past,” said Soskis referring to the bruising Bill Gates’s public image took during his divorce.
Whether other high-net-worth donors will listen to Gates’s call to give more is uncertain.
“It’s going to require him to do it more than once and now this has to be followed up with a constant refrain and drumbeat,” said Stephanie Ellis-Smith, who advises ultra-high-net-wealth and high-profile donors, foundations, and corporations to advance racial and social justice through their charitable giving.
“This is advocacy, and I find it’s one of the more difficult things for the very wealthy to do,” said Ellis-Smith. I’m glad that he’s doing what he’s doing, but the money is not where they kind of have skin in the game. Where they have skin in the game is when they actually start taking personal risk and engaging in advocacy because we’re in a very polarized society and there’s real risk there.”
