The $20 million difference

Michael Alan Hamlin

Posted on January 31, 2008

Selfless, compassionate thoughtfulness?

Microsoft founder and chairman Bill Gates announced last week during the World Economic Forum that the $37.6 billion Bill and Melinda Gates Foundation has made a $19.9 million grant to the Philippine-based International Rice Research Institute (IRRI). The grant is part of a $306 million agricultural package that almost doubled the foundation’s support for the sector.

According to a statement issued by IRRI, the grant will be released over a three-year period and will benefit 400,000 farmers in South Asia and sub-Saharan Africa. These beneficiary farmers will receive improved rice varieties developed at IRRI that withstand environmental stresses such as flooding, drought, and salinity. All of the grants provided in the overall package are intended to benefit small farmers, and lift them and their families out of poverty.

“If we are serious about ending extreme hunger and poverty around the world, we must be serious about transforming agriculture for small farmers – most of whom are women,” said Gates in the statement. “These investments – from improving the quality of seeds, to developing healthier soil, to creating new markets – will pay off not only in children fed and lives saved. They can have a dramatic impact on poverty reduction as families generate additional income and improve their lives.”

The Gates’ foundation is the world’s largest, and according to a recent report in FORTUNE has dispersed $14.4 billion. If billionaire investor Warren Buffet carries through with a pledge to give $41 billion more to the foundation, the report said “Melinda and Bill will very likely give away more than $100 billion in their lifetimes.” The couple has said publicly that they will give away 95% of their personal wealth.

Besides agriculture, the Bill and Melinda Gates Foundation supports programs to improve the health of young children and mothers, fight HIV/AIDS and other diseases, notably acute diarrheal illnesses, TB, and malaria. Significant sums also go to education. In 2006, the foundation dispersed a total of $2.7 billion. The bulk, $1.8 billion, went to global health initiatives, while $462 million went to U.S. beneficiaries mostly in support of education. Another $443 million was directed to global programs in agriculture, financial services, and education.

Deciding who gets to benefit from the Gates’ largesse isn’t easy. For one thing, despite its status as the largest charitable foundation ever, it still needs partners. How far $40 billion stretches when the goal is to improve the lives of perhaps a billion distressed individuals globally becomes painfully clear when you consider that the state of California, with a population of 36.5 million, spends $41 billion a year on education alone. This year, California will try to make up a projected shortfall roughly equal to everything the Gates’ foundation has dispersed since it was founded.

According to Melinda Gates as reported in the FORTUNE, the couple does not personally review requests with budgets of less than $40 million. They can’t. There are too many worthy causes and too little time to evaluate them reasonably well without a necessary evil – bureaucracy. That’s the cost of deciding to give away billions of dollars. But it’s clearly an acceptable tradeoff for hundreds of millions of beneficiaries.

Once money is invested, does it accomplish what it was supposed to? The answer: sometimes. A global alliance – the GAVI Alliance – has vaccinated almost 140 million children in 70 poor countries. “Thanks largely to this alliance, immunization rates are at all-time highs in the developing world, and more than two million premature deaths have been prevented,” according to Patricia Sellers, who interviewed the Gates and others for the FORTUNE report.

On the other hand, grants intended to strengthen education in the U.S. by building schools have demonstrated erratic returns. Melinda Gates told Sellers that while the foundation was trying to build quality schools, “the system” was working to pull them down to the lowest common denominator. But there have also been successes. One with an unlikely twist.

In 43 New York schools funded by the foundation, graduation rates are 73%, compared to “35% for the schools they replaced.” Like other funding initiatives, the New York schools grant involves a partnership. This one is with Joel Klein, Chancellor of the New York City public schools. In a previous job, Klein led the U.S. government’s high-profile antitrust case against Microsoft.

The partnership with Klein demonstrates the Gates’ capacity for putting social and economic benefits of others ahead of personal feelings. While Bill and Melinda Gates may not have personally evaluated the IRRI grant, it no doubt was given in the same spirit with which this remarkable couple help children and their mothers all over the world: selfless, compassionate thoughtfulness.

To these beneficiaries, it’s not about the money. It’s about life.

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