Does Gates Foundation Give Till It Hurts?


Looks like Bill's baby just downloaded some new software into her recycle bin.

Dayo Olopade looks into the Bill and Melinda Gates Foundation's simultaneously accelerated and old-fashioned approach to philanthropic giving in the American Prospect.

There are no stunners in here. During my brief stay at the L.A. Times, the paper devoted vast resources to a Pulitzer fishing trip attempting to find the Gates Foundation's sordid underbelly, and failed. But Olopade makes a fresh point: That the Foundation's biggest weakness may be its traditional, grant-based approach to do-gooderism, which mostly ignores microlending, "social entrepreneurship" and other market-oriented approaches to charity:

The concept is catching on quickly. Echoing Green, a foundation working with social entrepreneurs, reports that over 37 percent of its partners have structured their ventures as "hybrid organizations" operating in both the private and public sector. Just as 1298 saw India's lack of emergency response as a chance to turn a profit, a company called M-Via uses mobile phones to circulate remittances from global migrants to their relatives back home. Plagued by poor lighting and inspired by the Avon model for selling cosmetics, hundreds of East African women now make money selling solar lamps in rural areas. Business schools have begun to offer classes in social entrepreneurship, and even the U.S. government has jumped on the bandwagon, convening a major summit on entrepreneurship and offering cash prizes for projects with social missions. "The mainstream is going to shift profoundly in the next several decades," says John Elkington, an advocate of corporate social responsibility. "Most entrepreneurs will fail, and fail repeatedly—but they'll eventually create change."

Jacqueline Novogratz, CEO of Acumen, agrees that such for-profit ambitions can mean the difference between short-term poverty relief and long-term economic opportunity. "Money really isn't the issue," she says. Rather, "it's finding individuals with the capacity to do the work,"—dynamic local partners who will lift a venture to its feet. The proliferation of charity work in poor nations can actually make that task more difficult. "By the time the NGOs are done with them, there isn't an ounce of entrepreneur left," says one information-technology entrepreneur in Ethiopia.

Bill Gates gave a much-discussed speech at the 2008 World Economic Forum in favor of "creative capitalism," defined as "an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities." But in practice, there hasn't been much capitalism at the Gates Foundation. Less than 2 percent of its funding goes to for-profit efforts. "In the case of supporting small to medium-sized businesses and ventures, it has not been Gates that is the market mover," says Kempner, who works with a network of development entrepreneurs at the Aspen Institute.

In 2009 Olopade charitably sat down with three sad middle-aged men for an appearance on the Reason TV talk show.

NEXT: Is Proposition 19 Unconstitutional?

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The left now hates Bill Gates because he has successfully pushed for the use of DDT to stop the spread of malaria.

    Left wing hit pieces are expected.

    1. By the way here is a great article on why Bill Gates is the new awesome and why the left are proven moral bankrupts for outlawing DDT use.…..nceptions/

    2. We do?

    3. I’ll tell you what gets my liberal knickers in a knot, is myself and every other computer user for the last 20 years has made Bill Gates rich beyond comprehension and yet he spends his money overseas and not “at home.”

      I’ve got a great idea for Bill and Melinda, get a researc project going that takes apart the 70,000 page federal tax code, parse out all the little exemptions and tax breaks, find out who exactly qualifies for them and then find out how much money and to whom they’ve paid in Congress in the last 40 years.

      This way every American who pays taxes can see exactly who has been screwing them, at least when it comes to paying federal taxes.

  2. I don’t share the enthusiasm some libertarians have for micro-finance. It ends up just being a new version of the sort of debt peonage that went on in impoverished villages beforehand.

    When men lend money to women who can’t read, they become the most powerful people around, and it ends just like you might imagine.

    1. So what’s the alternative? Women who still can’t read, but also have no assets or income, and still at the mercy of the most powerful men around.

      At Hernando de Soto has made quite clear, unless and until property rights are codified and enforced there’s no hope for real economic growth. In places like Africa, where women have no property rights at all, the death of a husband means impoverishment for you and your kids, since his assets go to his brothers. You have to hope a brother takes a shine to you and is willing to take care of you, or you can turn to a life of prostitution.

      Now if feminists on the left actually gave a fuck about women in Africa they’d be banging the drum about their lack of property rights, but they don’t, so they won’t, and these poor women have to turn to gimmicky shit like micro-lending to acquire any wealth.

      1. Illustrative Cases: Kenyan Women Tell of Property Rights Abuses

  3. Let’s just make sure that Avon method of selling doesn’t turn into the Amway model of selling.

  4. I like the concept of funding for-profit self-help programs. But it’s difficult to criticize Gates when so many projects that need money don’t lend themselves to for-profit activities.

  5. It’s Bill Gates foundation, the foundation can give money/grants to whatever it wants…end of the discussion.

  6. Was your stay brief at the LA Times, Tim, because you’re a shitty writer with nothing to say that hasn’t already appeared in the libertarian catechism? Just wondering.

    1. Max where can I find your latest reporting for the LA Times?

    2. …Oh wait, you don’t write for the LA Times.

      The LA Times apparently doesn’t hire losers with no talent, no life, and no one that cares about them.

    3. No talent? check out the alt-text!

  7. On a related note, there’s a lot of evidence that charity from the wealthy mostly goes to already-rich organizations, rather than the small non-profits that do a lot of the dirty but highly important work. My experience is mostly with animal shelters and similar non-profits, but the principle applies much more broadly.

    In addition to encouraging the promotion of small-scale for-profit activity, what can be done to encourage more funding of the teeny-tinies that are really starved for funds, rather than the national or international organizations that are already flush?

  8. But in practice, there hasn’t been much capitalism at the Gates Foundation. Less than 2 percent of its funding goes to for-profit efforts.

    Doing what you want with your own money isn’t capitalist?

    1. Actually, no, unless you want to invest in new >capital

      1. Capitalism is a system in which the means of production and distribution are privately owned. Decisions regarding supply, demand, price, distribution, and investments are made by private actors. This includes transactions in which charity is exchanged for nothing.

  9. I like your blog,and also like the article,and thank you for provide me so much information :))

  10. Another approach would have been to use the money for lobbying instead.

    A pollution tax would do more for global warming than any grants the foundation could write.

    Foreign aid for educating woman in developing countries would do more for population control and the environment than anything else.

    US education reform from the federal level through federal funding to the states would impact many more students than what the Gates Foundation is currently doing.

    Changing the NIH targets for grants and setting up grants that fund clinical trials (in exchange for revoking patent rights) would make a bigger impact on diseases like malaria than anything the Gates Foundation can do on its own.

    I think there is some question as to whether philanthropy is a better strategy than lobbying to effectively create big change.

Please to post comments

Comments are closed.