Visions dawned on Monday of a new golden age of philanthropy with Bill Gates atop a mammoth $60-billion charity machine, with a global punch to rival world aid bodies and even governments.
Investment guru Warren Buffett’s $31-billion donation to the Bill and Melinda Gates Foundation will double the size of Gates’ fund and make it by far the world’s largest charitable foundation.
The gift, born from Berkshire Hathaway tycoon Buffett’s decision to hand over 85% of his estimated $44 billion wealth, represented the biggest to single philanthrophic giveway to date, analysts said.
It came weeks after Gates signalled he would soon give up daily duties as head of Microsoft in favour of his foundation, famous for work in the developing world including on HIV/Aids and for United States education initiatives.
“The Buffett gift is astonishing, and given that the Gates Foundation already had 30-billion, you add another 31 to that and you have something that is of an extraordinary scale,” said Kathleen McCarthy, director of the Centre on Philanthropy and Civil Society at City University, New York.
Professor Michael Bisesi, director of the Non Profit Leadership Centre at Seattle University said Buffett’s gift, which will be accompanied by giveaways to smaller foundations, was unprecedented.
“This is the single largest gift at one time, it will have a significant impact.”
The Gates Foundation’s heft can be seen by comparison to the United Nations Educational, Scientific and Cultural Organisation (Unesco) — which had an biennial budget for 2004-05 of $610-million.
The Bill and Melinda Gates Foundation paid out $1,36-billion in grants on global health, libraries, educational and other initiatives in 2005 alone.
But even Gates cannot match the giving power of governments — though experts say foundations have the advantage in speed of response and targeting of aid.
According to the Organisation for Economic Cooperation and Development (OECD), official development assistance from governments topped $100-billion in 2005, a quarter from the United States.
However, the figures may not be directly comparable, as last year they included money written off as debt relief for nations like Iraq and Nigeria and “one time” tsunami disaster payments.
Some observers have questioned whether it is desirable to have so much wealth, so concentrated, as in the Gates Foundation.
“It is up to us to make sure we build advisors in and around our programmes,” said Melinda Gates on Monday.
“The money is not coming to us, it is being entrusted to us to give back to society.”
Business logic would question whether doubling the size of an organisation will necessarily double its effectiveness.
“I have watched the Gates Foundation for a number of years, I think in their field, I would be amazed if results diminished proportional to capital,” Buffett said at a news conference on Monday.
Foundations are also reined in by the necessity to report tax information to the US government — so their accounts are essentially a public document, and open to press scrutiny.
The software mogul said his foundation’s mission could be seen in its funding for research into diseases in the developing world which might not make sense for pharmeceutical giants.
“Our key role is where the market isn’t going to come up with and develop a solution,” said Gates.
McCarthy suggested private foundations had an edge over governments as they are untamed by red tape.
“It can turn on a dime in a way a government cannot, when you have an entrenched bureaucracy.”
An organisation like the Gates charity giant, could also offer leadership, said Bisesi.
“Beyond the dollars … it serves as a powerful symbol about dealing with world issues.
“Instead of sprinking their money across the world to every conceivable cause, they have made a decision about targeting their funds where they can have the most impact.”
Independent bodies were also insulated from political pressure, McCarthy said.
“[Gates] can give the money on the basis of need and not on the basis of political agendas,” she said.
Bisesi added : “Private philanthropy is able to address issues for which either a legislative majority or an elective majority cannot be mobilised.”
The Buffett gift spurred comparisons to the 20th century when philanthropy by the likes of the Rockefeller Foundation and Ford Foundation spurred advances in US health care, and social improvements. – AFP