The philanthropic story of the year and maybe even forever is Warren Buffett’s gift of over $30 billion to the Bill and Melinda Gates Foundation, thereby doubling over time the assets of the largest foundation in the world. When the second-wealthiest man in America gives away about 85% of his wealth to the foundation run by the wealthiest man in America, we all pay some kind of attention.
All our lives have been touched by the cyber revolution for which our neighbor down I-5, Bill Gates, Jr., is the most visible spokesperson. Love him or hate him or somewhere in between, Bill Gates has already moved from a symbol of greed and monopoly to one of generosity by putting much of his Microsoft wealth into tackling some of the world’s most difficult problems via the Bill and Melinda Gates Foundation. Along the way on his very public personal journey, he has found a true friend and admirer in Warren Buffett.
The purpose of this column has always been to shed some light on local philanthropy, comparing it to larger trends and serving as a bully pulpit to encourage more local charitable giving and volunteering in ways that enrich us all. Therefore, it seemed like a good idea to de-code this most amazing of charitable commitments to elicit some lessons that we can adapt right here in our little piece of paradise up the road from the Gates Foundation.
The first lesson to be learned is that even Warren Buffett, a man of almost unfathomable wealth who is very tough-minded about his money, understood that wealth alone has its limits. When he decided to give his vast assets away to help those whose lives are much less fortunate than his has been, he chose an organization with which he had a close personal connection in Bill Gates. He knew and trusted the work the Gates Foundation was doing in addressing such difficult issues as AIDS in Africa and other health problems. As successful as Mr. Buffett has been in his own sphere of investing, he was smart enough to put his money where strategic attention is being paid to improving people’s lives. As Buffett himself put it, “In business, you look for the easy things to do. In philanthropy, you take on important problems and it is a tougher game.” It is extremely rare for a man of such power and influence to show this kind of humility and generosity. Contemplate for a moment, if you will, that his name will not even be on any institution with this unprecedented gift. The size of his philanthropy is almost unfathomable: more than double the gifts of John D. Rockefeller and Andrew Carnegie combined in today’s dollars.
Even though we are not likely to see gifts of this magnitude within sight of Bellingham Bay, the principle holds that the smart way to do charitable giving is to turn to those who have a track record, are open to all inquiries about their work and are taking an informed and strategic approach to the work they could potentially be doing with your money.
As the initial reaction to this enormous gift has died down a bit, there have already been some thoughtful commentaries in the Chronicle of Philanthropy by experts and practitioners in the field. What seems like an enormous gift is in fact only slightly over 10 percent of the charitable giving of $260 billion by Americans last year (see the July 10 Newsweek’s special double issue on “Giving Back”), and that is based on the total Buffett gift that is going to be spread out over many years. “Only” $1.5 billion of the $260 billion is going to be given to the Gates Foundation in the first year, and it must be invested in charitable work within the year it is received. So, what is the lesson here? Things are not as large as they seem at first, especially when they are to be used to take on enormously complex and intractable issues such as poverty or disease on entire continents.
Two more related lessons from this gift can be deduced and applied to our local philanthropy. The first is that no one philanthropic source can be expected to eliminate or even significantly reduce any major issues even in Whatcom County, and that is probably a very good thing. Just as an economy that depends too heavily on a particular business or sector is always at risk should that business or sector experience a sharp downturn, the very same thing is true of any nonprofit organization that does not have a diverse funding base.
The final local lesson from Buffett’s charitable gift is that all philanthropy taking on a problem or an issue that is very deeply rooted will need to engage in a collaborative effort of some scale. Despite the vast amount the doubled Gates Foundation will be investing, say, in Africa, it will still be only a drop in the bucket of solutions needed. Even if the vaccines are discovered to end AIDS in Africa, it will take massive government efforts to implement systemic changes.
This need to collaborate with a variety of partners is the proverbial double-edged sword: Collaboration is necessary in order to be fully effective, but each partner has its own agenda and is not always as open to change as will be necessary for the resolution of some problems. This is as true here in Whatcom County as it is on the grand scale on which the Gates Foundation will use the Buffett gift.
While the Buffett gift to the Gates Foundation was in a league by itself, the rules of the game by which the money will be invested for community – and even national – improvements will be pretty much the same as they are here in Whatcom County. The important thing, regardless of the location or scale, is that integrity, collaboration, accountability and vision are at the core of the philanthropic effort. Nice to know we are playing with the big boys, isn’t it?
Don Drake was President of Whatcom Community Foundation from 1997 until September 2005. During that time he never secured a $30 billion gift.