Slowdown in Gates' Giving to Foundation Highlights Challenges

After turning the Bill & Melinda Gates Foundation into the largest in the United States with a burst of donations totaling $24.6 billion between 1998 and 2001, co-founder Bill Gates has dialed back his contributions to the foundation, the New York Times reports.

Between 2002 and 2012, Gates sold an estimated $22 billion in Microsoft stock but contributed only $3.7 billion of that to his foundation. The pullback reflects the foundation's rapid growth — it now has $40.2 billion in assets — and the challenge that comes with distributing, productively, large amounts of money — a problem compounded by the ever-increasing amounts contributed to the Gates Foundation by Warren Buffett, who pledged in 2006 to give most of his $44 billion fortune to the foundation. While declining to address specific reasons for the slower pace of contributions, John Pinette, a spokesperson for Gates, told the Times that giving away $3.9 billion, as the foundation did in 2012, "is a massive task and a big responsibility."

"It's very easy to give away money, but hard to give away money to have real and lasting impact," said Paul Brest, former president of the William and Flora Hewlett Foundation. Indeed, one of the greatest challenges the foundation faces is deciding, based on incomplete knowledge, how best to tackle such complex problems as eradicating disease in the developing world and improving public education in the U.S.

Although Gates, for the most part, has been lionized for his foundation's work and his efforts to promote global philanthropy through the Giving Pledge, his penchant, as Microsoft CEO, for predatory business tactics have caused some to speculate that the surge in contributions to his foundation in the late 1990s was as much about image control as anything else. During the eighteen months between October 1998 and April 2000, when an antitrust case filed by the United States against Microsoft was tried, Gates reduced his stake in the company and contributed $20.3 billion to the foundation. While the amounts involved were too large to be dismissed as a public relations ploy, argues Ken Auletta, author of the 2001 book World War 3.0: Microsoft and Its Enemies, the ramp up in contributions "became part of Microsoft's PR effort to humanize Gates."

Mitchell S. Pettit, former executive director of ProComp, an anti-Microsoft lobbying group, told the Times that the slowdown in contributions from Gates since then has strengthened "the inference that the original motive was not altogether altruistic." Still, critics laud Gates for the way he has thrown himself into his philanthropic work. "Today I must say I admire the guy for what he has done," said Pettit. "It looks like the effort is very genuine."

Randall Smith. "As His Foundation Has Grown, Gates Has Slowed His Donations." New York Times 05/26/2014.