Gates Foundation. Good Charity or Bad Charity? Part 1

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My wife and I had a great discussion after my last post about the Gates Foundation’s instance that U.S. poverty could be overcome by better schools and teachers instead of a broad-based approach (like the Foundation uses overseas).  She led off by saying, “Isn’t Gates a good guy?  He’s giving away his money trying to help people.”  My response was that putting money into bad ideas doesn’t necessarily help people.  With all the publicity about philanthropy lately this has been a topic of discussion (see the New York Times Op-Ed piece “Good Charity, Bad Charity“).  To be fair, I really couldn’t tell my wife if all the K-12 education projects the Gates Foundation funds are good or bad ideas.

To their credit, the Gates Foundation maintains a list of all the projects they have funded on their website.  I cut and pasted information about the 128 “College Ready” (K-12 education) projects they funded in 2014 into a spreadsheet (ironically a MicroSoft product).  Note: K-12 education projects are not limited to public schools, as will be discussed in Part 2.

So to start with, Wow!  $93.3 million was given out in support of K-12 education projects in one year.  That’s a lot of money but let’s look at it in context.  According to Wikipedia the Gates Foundation has a $42.3 billion endowment ($28 billion from Gates, billions more from Warren Buffett).  Assuming the endowment funds are properly invested, let’s say that portfolio grows at 10.3% per year (the average historical increase of the markets).  That means that the Foundation’s portfolio should increase by $4.4 billion per year.  That Wow! of $93.3 million is only 2.1% of the possible earnings of their portfolio and only .2% of the entire endowment.

Two brief thoughts about $93.3 million.  First, when you spend that kind of money every year it’s going to make a difference – good or bad.  Second, if they really wanted to change (good or bad) K-12 education they could be spending a heck of a lot more.

In order to get a better understanding of what the Foundation was supporting I categorized each of the 128 projects according to the blurb provided on the Foundation’s website (or if that was too vague I went to the project recipient’s website to see what their mission is).  I ended up with 12 major categories plus an “other” category.

Want to know what the top-funded category was?  You’ll be surprised – I think it falls in the “good” category.  Read all about it in my next post.

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8 thoughts on “Gates Foundation. Good Charity or Bad Charity? Part 1

  1. I had a similar debate with my 24-year old daughter who graduated from Stanford last June. Bill Gates gave the commencement address to her graduating class and that might explain why she still hero worships Bill Gates. I haven’t managed to educated her yet on the damage Gates is causing.

    For her, it is a see no evil, hear no evil, speak no evil of Bill Gates attitude—-proof to me that Bill Gates has a great PR machine. Any image, Bill Gates had was paid for and bought—and not earned.

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  2. One thing I thought about as I wrote – it seems like Buffett gets off a lot easier than Gates in most cases. He’s into the Gates Foundation for billions, yet I have rarely connect him to what the Foundation is doing. I will in the future.

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  3. A decade ago Bill Gates wrote “The Road Ahead”. Chapter nine talked about education. The title of the chapter was, “Education: The Best Investment”. If it is the best investment, why only 2%.

    As to the good and bad, I worked for Bensenville District 2 when they received a grant from Sam Walton. The New American School grants were used locally to develop the prototype standards, we worked on multimedia in education that now resembles the web and the life-long community learning center still exists. At the time there were many that argued we were doing things that would hurt education. Others claimed that we were changing the world. Reality, and the advantage of 20 20 vision looking backwards, is that the truth lies somewhere in the middle.

    Bill Gates, Buffet, the federal government and others may hold the purse-strings, but the local educators and those that implement the programs will be the ones that do good or bad for kids. As much as I see people slamming those that donate or fund, what we all need to remember is that my offering in my house of worship (temple, church, mandir or mosque) isn’t bad or good, it is what happens to the money after it leaves my hand.

    Before we slam the donor we need to ask ourselves, “what did I do today to make the future of a child brighter?”

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