Its charitable war chest, already at $38 billion, will soon swell with the added wealth of another famous billionaire -- with pressure to spend it. Construction has started on a new Seattle headquarters -- complete with visitor center -- to house its growing work force, already at 500-plus and expected to double in the next year or so.
After this week, Bill Gates plans to step full time into this frenetic growth spurt, serving as philanthropist-in-chief of an organization with a global mission and a current endowment the size of the gross domestic product of Lithuania.
With Warren Buffett's decision in 2006 to donate most of his wealth to the Gates Foundation, its endowment will effectively double. The full brunt of that obligation kicks in next year and means the foundation will have to give away at least $3 billion annually to avoid tax penalties.
"It's harder than you think to effectively give away money," observed Patty Stonesifer, the foundation's outgoing chief executive. "It's easy to give money away. But it's not easy to give it away well."
In an interview with the Seattle P-I, Gates said he will spend more time mulling over the strategy of the foundation, which has so far committed $16.5 billion to myriad projects.
He also hopes to meet more with the recipients of that wealth, with a special focus on the research grants. "I'll be out visiting those sites, talking to the scientists and going to more conferences."
Techno-humanitarian
That's not surprising, since Gates appears to focus more personal attention on the science funded by his philanthropy, such as the search for an effective malaria vaccine, than on the social and educational programs. It's a habit that has given ammunition to those who complain that the Gates Foundation prefers "techno-fix" solutions and tends to avoid more important, complex ones.
Take water, for instance.
More than a billion people today lack access to clean water. It's a problem linked to many illnesses and is clearly one of the world's greatest needs. The Gates Foundation, despite years of studying the problem, has yet to fund any major water improvement project.
"Water's really tough," Melinda Gates said. It might sound like a simple problem easily solved by digging wells or laying pipe, she said, but getting clean water to the truly neediest people -- many of them living in slums -- is a complex maze involving multiple government agencies, conflicting demands and massive investment.
"We're still trying to figure out if we can make a difference," said Sylvia Mathews Burwell, director of the Global Development Program at the Gates Foundation. Mathews Burwell, who held several top positions in the Clinton administration, said the foundation has learned the hard way it can't simply identify a good cause and jump on it.
The philanthropy's very first big project, in 1997 -- getting America's public libraries wired to the Web -- was one such road to hell. Good intentions were not enough.
"We didn't think about sustainability," acknowledged Allan Golston, who leads the philanthropy's U.S. program that encompasses projects on education, libraries and Pacific Northwest giving.
The program succeeded at installing 40,000 computers at 11,000 public libraries. But the Gates Foundation did the project itself -- hiring staff who swooped in to set things up -- and had no long-term plan for maintaining it. And the way they did it, without much public communication, also raised the hackles of some who saw it as a stealthy way to build Microsoft market share, not motivated by helping the poor.
"We were just naïve," Stonesifer said. At the end of the project, the foundation let go more than 100 employees, she said, a wrenching episode that convinced everyone that they would never again run major programs in-house but rather would support independent projects with outside partners.
"Now, what we look for is the project has to be scalable, sustainable and catalytic," Mathews Burwell said. That is, she explained, the philanthropy wants to work with partners to create change that is both self-sustaining and easily expanded.
'Creative capitalism'
This is another key role Bill Gates says he will play at the foundation, reaching out at the highest levels of government and industry to encourage partnerships on projects aimed at reducing the global gap between the richest and poorest. He said he plans to really push corporations, especially the drug industry, to get more involved.
"There are also things around creative capitalism," said Gates, referring to the phrase he used at the 2008 World Economic Forum to describe his notion of redirecting the profit motive toward helping the planet's poorest. It is an idea he truly believes in, but one that many critics dismiss as, at best, wishful thinking and, at worst, a billionaire's attempt to gild over a largely exploitive system with a shiny layer of moral repurposing.
Perhaps the most successful example of the Gates Foundation's approach to working with partners to catalyze large, self-sustaining change is a project launched in 2000 that remains the biggest grant (at $1.5 billion) within the foundation's primary area of work -- global health.
The Global Alliance for Vaccines and Immunization, first administered by Seattle-based PATH (a top Gates grant recipient and nonprofit health organization) but now based in Geneva, was conceived back when the foundation was mostly run by the Microsoft chairman's father, Bill Gates Sr., in his basement and Stonesifer at the Redmond pizza place.
The initiative, which offers poor countries vaccines and support funding in return for measurable improvements in reducing childhood diseases, prompted many European governments to pitch in money and has vaccinated tens of millions of children in the world's poorest countries. Experts estimate at least 3 million deaths have been prevented so far.
"There are many ways to tackle poverty and inequity, but there's really nothing as impactful as improving health," the Microsoft chairman said. And there is probably no single tool that can do as much, so simply and cheaply, to improve global health as the vaccine, he said.
Delivering on health
Currently, about half of the Gates Foundation's money in the global health arena is being thrown at vaccines -- finding new ones against malaria, tuberculosis and AIDS, as well as improving the distribution of existing vaccines in poor countries.
"There hadn't been much investment in vaccines, partly because of the marketplace," Gates said. Drug companies don't make much money on vaccines, he said, and have recently tended to invest mostly in drugs.
The Gates Foundation's approach to this kind of market failure is to do its own "creative capitalism" by paying some of the upfront costs aimed at stimulating a "new market" for vaccines in poor countries. The philanthropy believes the drug industry will get more excited about vaccines for the developing world once it sees all the new money (from Gates and from governments) in this arena today.
It's an approach that has already paid off, with new vaccines recently approved or soon to come out for a variety of common afflictions that kill many children in the developing world -- rotavirus, meningitis and a variety of other deadly respiratory infections.
Unfortunately, this upstream scientific and technological success has not been matched with improvements downstream to assure that these new vaccines can actually get to those who need them most.
The Gates Foundation has been big on funding discovery and development, assuming the delivery would be taken care of by governments or other organizations. It didn't work out that way, and there are moves afoot within the global health program -- led by its third director, former drug company executive Dr. Tachi Yamada -- to address this.
"I really think they should be funding solutions to the delivery problem, not so much the science," said Dr. Peter Piot, a world-renowned infectious disease expert and outgoing director of the Joint United Nations Program on HIV/AIDS, or UNAIDS.
"The Gates Foundation has been wonderfully successful putting global health on the agenda," Piot said. But it still appears to be suffering from a fairly self-defined decision-making process and lack of adequate outside input, he said, "partly, I suppose, because so many people are afraid to criticize them publicly. Everyone wants a grant."
Learning from mistakes
The Seattle philanthropy leaves many with the sense that public scrutiny and outsider criticism is unwelcome.
Some see Gates' move to the foundation and the selection of Jeff Raikes, a top Microsoft executive, as the foundation's new chief executive as a sign of insularity and that the "Microsoft way" -- fast-paced, aggressively performance-based -- will increasingly define the work culture of the philanthropy.
"I think it's fair to say the Gates Foundation is not yet very transparent or accountable," said Joel Fleishman, a professor of public policy at Duke University and author of the book "The Foundation," about the growth and changing nature of philanthropy today.
The Gates Foundation, like all philanthropies, is granted tax benefits in exchange for the promise that what it does will provide public benefit, Fleishman said. In that sense, he said, philanthropies are obligated to be more open and accountable.
"But most foundations today still don't even produce annual reports," he said. (The Gates Foundation does.) Few philanthropic organizations today include the public in their policy debates or their self-evaluations, which he said in the long run tends to undermine public confidence in the mission of even the most well-intended foundations.
When Melinda Gates spoke at a conference last year and said they were "learning from mistakes," Fleishman contacted the foundation to ask for a description of those missteps. He was told that they were not really mistakes, but rather "learning opportunities," and he was never provided with any examples.
"It was pretty funny," said Fleishman, who was later invited to Seattle to help the foundation work on becoming more transparent. Stonesifer and Melinda Gates said they have since launched an effort to improve transparency and the philanthropy's dialogue with the public.
"It's a fair criticism," said Melinda Gates. "We do need to work on that."
Bill Gates has clearly become more comfortable with the idea that he is a public personality, both at Microsoft and at the Gates Foundation. He said he plans to speak out publicly more on the issues he cares about and to advocate for the kind of changes he believes are necessary to reduce the inequities caused by poverty, disease and lack of economic opportunity that threaten global stability and progress.
It's hard to change the world without getting involved in politics. But Gates, perhaps even more than many in the business community, has steadfastly refused to reveal his political views.
His father has taken political stands, on issues such as taxes, that some would characterize as progressive or liberal. His billionaire friend and fellow Gates Foundation trustee Buffett earlier this year said he favored either Clinton or Obama for president. Many of his top foundation employees, like Mathews Burwell, came to the Seattle philanthropy from the Clinton administration.
Will Bill Gates, the philanthropist, reveal that he is, in fact, a closet progressive?
"I believe in progress," he said with a chuckle.
INITIATIVES
The Seattle philanthropy is focused on three areas:
SAMPLE OF GRANTS
Global Alliance for Vaccines and Immunization, $1.5 billion: An effort to expand basic childhood immunizations in poor countries, started in 2000.
United Negro College Fund, $1.4 billion: The Gates Millennium Scholars program was started in 1999 to provide financial aid to minorities for college.
U.S. Libraries program, $325 million: The first major grant given by the philanthropy, in 1997, to reduce the "digital divide" by ensuring Internet access to all communities through publicly accessible computers in libraries.
Alliance for a Green Revolution in Africa, $265 million: A project launched in 2006, with further support from the Rockefeller Foundation, aimed at improving farmers' productivity in Africa.
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