Got cash to spare? Starting soon, Gates Foundation will accept it
This year the Bill & Melinda Gates Foundation accepted its largest pledge ever — more than $30 billion from a high-powered investor...
Seattle Times business reporter
This year the Bill & Melinda Gates Foundation accepted its largest pledge ever — more than $30 billion from a high-powered investor named Warren. Next year it will accept its smallest — $35 from a 7-year-old girl named Olivia.
Warren Buffett's historic gift sparked a flurry of inquiries from people interested in making their own contributions both large and small, said foundation Chief Executive Patty Stonesifer.
Offers ranged from estate lawyers managing fortunes to the young girl in New York, whose father e-mailed the foundation after the girl heard about Buffett's gift and wanted to help, too. The Buffett gift, and the interest it has generated, has prompted foundation leaders to begin for the first time accepting outside donations from anyone who wants to give them.
"Do you say no to a 7-year-old girl, but yes to Warren Buffett?" Stonesifer asked. "One way or another, she did convince us to do some deep thinking."
Stonesifer said the foundation won't solicit money and prefers people give directly to charities working in related areas. But those who want to donate to the foundation shouldn't be turned away, she said.
The decision to accept private donations is just one step in a series of changes announced by foundation leaders this week on how they plan to run the world's largest charity.
Some of those decisions are breaking the mold of how private foundations work and are sure to have a ripple effect throughout the philanthropic world, say experts in the field.
Intent on making dramatic progress in fighting disease and poverty and improving schools in the next decades, Stonesifer said that the foundation will give all its money away within 50 years after the deaths of its founders and then shut down.
Phasing out the foundation within the century "makes it clear that we are about addressing the issues now," Stonesifer said. That means preparing to spend big to achieve breakthroughs.
"If there's a way to dip into the endowment to support change, they would do it. We have great optimism there will be opportunities for that in the future."
Spending so much so fast is challenging. The foundation already faces growing pains from ramping up to spend $3.5 billion a year by 2009, almost three times as much as it spent in 2005.
Meanwhile, the value of Buffett's gift of 10 million Berkshire Hathaway shares is growing. Worth an estimated $31 billion at the time of the June announcement, the shares are now worth about $35 billion. The Gates Foundation receives 5 percent of the gift at a time, in annual installments — and all of it has to be spent in the following year.
The decision to spend itself out of existence should stir healthy debate at other foundations, said Phil Buchanan, head of the Center for Effective Philanthropy.
"It will challenge the assumption that because most large private foundations have operated a certain way over time, that's necessarily the best way," he said. "Too many just default to managing themselves to exist in perpetuity without thinking about whether that makes sense."
The majority of foundations in the U.S. pay out at the legally required minimum of 5 percent of their assets per year.
Considering Gates' ambitions, "there is the potential to solve some of these problems by putting more money against them right now in ways that will save lives and require fewer resources in the future," Buchanan said.
Besides, he added, "Nothing focuses you quite like an end date."
The decision reflects the hands-on approach Bill and Melinda Gates take toward philanthropy, wanting to take an active role themselves rather than establish a legacy.
For them, Stonesifer said, the challenge is "how much can you do while you're living."
The foundation is also bringing in independent advisers. Critics of the Gates Foundation have often worried that a handful of people make decisions that have a broad impact on the world.
Next year the foundation will create three advisory panels — one for each of its program areas — to seek outside opinions from academics, nonprofit leaders and others. The foundation has also started doing anonymous surveys of its grantees.
It can be difficult to find people willing to question an organization with so much money and influence, Stonesifer said. "The first thing people say is thank you," she said. "We have to take extra steps to make sure that we get frank and honest advice."
Seattle Times reporter Sandi Doughton contributed to this story. Kristi Heim: 206-464-2718 or firstname.lastname@example.org
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