Bill and Melinda Gates run the largest foundation in history, but it's a small outfit compared to the problems it's tackling, as Bill himself often notes. The $3.6 billion the foundation gave out in 2013 wouldn't even have covered Proctor & Gamble's ad budget that year. It's akin to what New York City's public school system spends in six weeks. Or what the U.S. government spends every eight hours. In 2013, venture capitalists invested almost ten times more in tech companies than the Gates Foundation invested in NGOs trying to help the world's 2 billion poor people.
So when Bill and Melinda Gates write in their new annual letter, released today, that they're making a big "bet" on improving the human condition over the next 15 years, I can't help but think: That's nice, but too bad you folks are playing with such a small stack of chips. And, my, how you want to spread those chips around—helping Africa feed itself, reducing child deaths, wiping out entire diseases, revolutionizing education with software, and more. Good luck with all that.
Which leads to my second thought: Given the scope of their ambitions, why aren't the Gateses putting more of their money on the table?
While Bill and Melinda Gates donated a big chunk of money to set up their foundation over a decade ago, underwriting an endowment that's now grown to over $42 billion, they have given away relatively little money since then. According to a recent New York Times analysis, the Gateses gave $3.7 billion to the foundation between 2002 and 2012.
In contrast, Warren Buffett has given the foundation at least $13 billion in Berkshire Hathaway stock since 2006. With the value of such stock shares way up lately, Buffett has given more to the foundation in just the past two years than Bill and Melinda have given in the past fourteen years.
Meanwhile, Bill Gates has grown substantially wealthier during this same period. He now has a net worth of $82 billion. According to the Wall Street Journal, $14 billion of that is in Microsoft stock. The majority, around, $64 billion, is invested in different things through Cascade Investment LLC, Gates's private investment firm.
In other words, only a fraction of the Gates fortune is being tapped for philanthropy—at a time when some 6 million children die each year before the age of 5, over a million people still die of AIDS, another million die of malaria, 2 billion people live on less than $2 a day, and so on.
In the face of this emergency, why is so much Gates money sitting on the sidelines? And when will that change given that Bill and Melinda suggest that we're entering a momentous and crucial period for humanity?
The Gateses predict that the lives of the poor will improve more in the next 15 years than ever before, but they also say this isn't a done deal, and call for a movement of global citizens to ensure progress moves along.
Meanwhile, though, it would be nice to know about their own giving plans. Because here's the thing: We know that the vast bulk of their fortune is destined for philanthropy and that their foundation will also spend down and close its doors within twenty years of their deaths. What we don't know is the timing when it comes to moving more of their private wealth off the sidelines and into the greatest battle in human history. Will that start to happen this year? Or a decade from now?
I've written before on the question of why the Gateses aren't giving away more money, faster. There are some good possibilities: They may lack confidence the money can be effectively spent when their foundation is still investigating different strategies. Or they may think they'll have a greater long-term impact by building their fortune and having more money to give away later.
These are smart people, and I'm hesitant to second guess their strategy for deploying their wealth over coming decades. But I do think a public explanation would be helpful to address some obvious questions. For instance: Why is Bill Gates touring the world telling other rich people to give away more money when he's nowhere close to realizing his own giving potential? And why does Gates often say that more spending now on global health challenges is urgently needed, and that such spending almost mathematically translates into saved lives, while he's personally choosing to limit his own spending?
Also, do Bill and Melinda Gates really not believe that they could effectively give away more money at this point? Because even if their own foundation's pipeline can't expand more quickly, isn't it likely they could find other institutions to deploy their dollars effectively?
I don't know the answers to these questions. What I do know is that it would be wildly wrong to imagine that these people are callously hoarding their fortune while millions suffer in preventable ways. After all, no living couple has given more money to make the world a better place or saved so many lives.
The Gateses have got to have a plan for all that cash, and a rationale for not spending it now. I can't imagine I'm alone in dying to hear what it is.