|Less Charity, Mr. Microsoft|
Why does Bill Gates, a man clearly so talented in doing business, in earning money, decide that The Poor must be helped through charity, asks Andrea Bohnstedt
He is the ultimate geek done good: Bill Gates. Chairman of Microsoft, Master of the Universe, one of the richest men in the world, with a personal wealth of an estimated USD60bn.
That is, roughly, twice Kenya’s 2008 GDP: twice of what all of Kenya produced in one year. Or, if you take the 2010/2011 budget, he could finance all of Kenya’s spending for nearly six years. In fact, before the dotcom bubble burst, in 1999, his wealth was estimated at USD100bn. Let’s not quibble over a billion more or less: this is clearly a man who knows how to create products and services, run a business, make money.
And then, I guess, Bill got bored. Or maybe just wanted to try out world domination another way – by being nice. In 2006, he announced that he would only work part-time at Microsoft, and full time at the Bill and Melinda Gates Foundation. By 2007, he and his wife had given an estimated USD27bn to charity. Like his Microsoft success, Bill Gates’ charitable activities are XXXL, too.
By the end of last year, the charity had an endowment of USD33.5bn, and Warren Buffet as a trustee together with Bill and Melinda Gates. The foundation’s status as a charitable organisation requires it to donate at least 5% of its assets every year, i.e. at least around USD1.5m. Just to put this in perspective: The USD800m that the foundation spends under its health programme are roughly equivalent to the entire budget of the UN’s World Health Organisation (WHO).
People who have been wildly successful in their career in the north will not bring that talent to developing countries. Instead, they bring charity, turning Africa into a theme park for good intentions.
So, given that there’s much poverty, surely bigger is better? The Guardian recently published an interesting analysis titled 'Inside the Bill and Melinda Gates Foundation’ and this was one of the questions that the author pursued. The foundation has quickly become ubiquitous, thanks to both its generous finances and its star power: '’Every conference I go to, they're there. Every study that comes out, they're part of. They have the ear of any [national] leadership they want to speak to. Politicians attach themselves to Gates to get PR. Everyone loves to have a meeting with Gates. No institution would refuse," the author cites a charity professional.
Much of this - star power, access, finances - is good: Fast and unbureaucratic spending decisions, speedier and more flexible than e.g. the UN. The ability to attract co-funding and the best human resources in the market. Private-sector management practices.
But then there are also some less comfortable issues: Complain about the aid agencies for all you want, but they are ultimately – admittedly, often very ultimately – the outcome of a political process in the agency’s home country.
The Gates Foundation, in contrast, is subject to no controls, and the article tellingly describes a meeting of Gates with some of the richest individuals who allegedly refer to themselves as the Good Club and muse how to fix the world. The article also raised the issue that the foundation sometimes invested its endowment in industries and sectors that were seen as detrimental to the poor who the foundation aims to help. The only sector that the endowment cannot be invested in is the tobacco industry, but apart from that it seeks to maximize returns.
I was mulling this 'venture philanthropy’ with the niggling feeling that I had overlooked something. Eventually, I realized what it was: That Bill Gates, a man clearly so talented in doing business, in earning money, decides that The Poor must be helped through charity.
This bifurcation has preoccupied me for a while: People who have been wildly successful in their career in the north will not bring that talent to developing countries. Instead, they bring charity, turning Africa into a theme park for good intentions.
Bono and Geldof don’t play African concert tours. They collect donations for Africa, but don’t seem to invest in plain old boring regular companies around here. Bono’s wife runs an ethical clothing company that will get Kibera school kids (because it’s gotta be Kibera, right?) to design t-shirts. Why doesn’t she invest in mass production of regular t-shirts? After he sold Celtel to MTC, Mo Ibrahim has set up a private equity fund, Satya Capital, but makes more headlines with his Mo Ibrahim Foundation. Why can’t Bill Gates bring his immense business talent to, well, business?
If the Gates Foundation prides itself on doing things a different way, it still does not challenge the aid industry as such: it gives grants to intermediary foundations, many of whom represent the business-as-usual of the aid industry and the illusion of the fixability of single issues. And charity is limited, as the article points out: 'For all the charity's resources and connections, for all the attendant risks of over-confidence and over-mightiness, on the ground in Africa or Asia the foundation's immense-sounding grants are a miniscule fraction of what is required to create a fairer world.’
In contrast, a successful business has no such limit. Microsoft is everywhere. It pays taxes for governments to fund their own healthcare system. Employs people so that they can buy their own mediation.
Really now, Bill – I had expected more!
Andrea Bohnstedt is the publisher of Ratio magazine (www.ratio-magazine.com). Andrea has written on business, economic and political issues for, amongst others, Dun and Bradstreet, African Business, Africa Investor, Afrika-Wirtschaft, Control Risks, and Oxford Analytica.