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Welcome back. With publicly funded foreign aid put “into the wood chipper” in the US, and hit by sharp cuts in much of Europe, the question is now whether private philanthropy can step into the breach to help address the world’s most urgent humanitarian challenges.
There’s a vast amount of financial firepower on hand. The world’s 100 richest people hold wealth of $5.6tn, according to the latest Forbes Billionaires List. Philanthropic foundations have about $1.6tn in their coffers in the US alone.
As I highlight below, Microsoft co-founder Bill Gates’s move to step up his pace of giving marks a significant change of approach. Will it catch on?
PHILANTHROPY
Bill Gates ‘accelerates’ his giving. Will other billionaires follow?
“The man who dies leaving behind him millions of available wealth . . . dies disgraced,” the steel tycoon Andrew Carnegie wrote in his famous essay The Gospel of Wealth.
Carnegie didn’t quite pass his own test — he’d given away most of his vast fortune at his death in 1919 but still had personal wealth of $30mn, more than $500mn in today’s money.
Yet his admonition has rung down the centuries, and has now inspired a major shift in approach from his modern-day counterpart Bill Gates — a move that raises some awkward questions for the world’s wealthiest philanthropists and foundations.
Since Gates set up his eponymous foundation with his then wife Melinda in 2000, the body has spent or given $102bn towards charitable goals, with a primary focus on tackling public health problems in developing countries. Yet during that time, Gates’s personal wealth has grown from $63bn to $108bn, according to Forbes, thanks to the appreciation of a diversified investment portfolio that still includes a stake of roughly 1 per cent in Microsoft.
On Thursday, Gates announced a plan to sharply increase the pace of his giving, citing Carnegie’s writing as inspiration. “People will say a lot of things about me when I die, but I am determined that ‘he died rich’ will not be one of them,” Gates wrote on his blog. “There are too many urgent problems to solve for me to hold onto resources that could be used to help people.”
Gates, who will turn 70 this year, said he now planned to give away “virtually all” his wealth over the next 20 years, during which time he expected the foundation to spend more than $200bn. At the end of 2045, he said, the Gates Foundation would close its doors for good. That is a dramatic change of strategy for the organisation, which was previously mandated to keep running for up to 50 years after the death of its founders.
Gates’s decision comes amid an ongoing debate about the pace of charitable spending by US philanthropic foundations, which hold over $1.6tn. Most of the biggest ones are “perpetual”, meaning their trustees have a dual mandate: to use their money for good causes, but also protect enough of it to ensure their indefinite survival.
The bodies commonly spend only slightly more than 5 per cent of their assets per year — the US legal minimum for charitable foundations. By securing investment returns above that level, many have been able to secure strong growth in the size of their endowments.
It’s not hard to see the appeal that a perpetual foundation would have to an ageing plutocrat, worried about being forgotten after death. But proponents of the model argue that it can be a crucial means of providing stable support for causes that could otherwise suffer painful swings in funding (see my interview last year with outgoing Ford Foundation head Darren Walker).
Gates gave a thinly veiled swipe at the perpetual model, however, as he outlined his accelerated spending plans. The approach “allows us to do a lot more because we’re not trying to steward our money for some weird legacy thing,” he told the New York Times. “If we were trying to be a forever foundation, instead of being able to spend $9 billion a year, we’d have to drop down to spending like $6 billion a year.”
Gates’s announcement has also laid down an implicit challenge to his fellow billionaires. In 2010 he launched the Giving Pledge initiative, which called on the super-rich to commit to giving away “the majority” of their wealth during their lifetimes or in their wills. About 240 donors have joined the club so far. In the somewhat vaguely worded pledge to give away “virtually all” his wealth during his lifetime, Gates has left himself a bit of wiggle-room — but this is clearly a step up from the ambition of the Giving Pledge.
To Gates’s critics, the prospect of his exercising still greater international clout through expanded philanthropic spending will look worrying. Anand Giridharadas’s 2018 book Winners Take All, for example, argued forcefully that large-scale philanthropy is another means by which the ultra-rich exert power over society, and entrench and legitimise the unequal status quo from which they’ve benefited. More recently, Tim Schwab’s The Bill Gates Problem contended that Gates already has a troubling degree of personal control over health and agricultural policy in much of Africa and beyond.
Still, if his approach to “accelerated” giving catches on, Gates will deserve some credit for adding urgency and ambition in the philanthropic sector, at a time when many humanitarian causes are in urgent need of boosted funding. So too, perhaps, will Carnegie. Certainly, a figure deserving of greater recognition is Chuck Feeney, another influence cited by Gates in his announcement.
The billionaire founder of the Duty Free Shoppers network gave away his entire fortune, save for about $2mn to support him and his wife in their old age. Feeney died aged 92 in 2023, having spent his last years living in a two-bedroom rented apartment in San Francisco. His foundation had closed three years earlier, after contributing $8bn to causes ranging from peace in Northern Ireland to Aids medication in South Africa. “It’s a lot more fun to give while you’re alive than to give while you’re dead,” Feeney once said.
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