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Buffet's donation greatly strengthens the Gates Foundation. (Photo: AP)
The world of global health philanthropy was still buzzing from the announcement that Bill Gates would take a more active role in the Gates Foundation when even more momentous news arrived. Warren Buffett, trailing Gates as the world's second-wealthiest man, said he would give a majority of his fortune—estimated at more than $30 billion—to the Gates Foundation. In a press conference with Bill and Melinda Gates, Buffett explained, "I've found some people who are better at giving away money, and I'm turning it over to them" (WashPost). He also announced he is trying to convince several business partners to follow suit.
This was the latest validation of the Gates Foundation, an organization that has only been focusing on global health promotion for a half-decade or so. But in that time, it has spent an estimated $6 billion to fight diseases such as malaria and tuberculosis and stimulated "new knowledge, new products or just new thinking," (LAT) says the acting director of the World Health Organization. The foundation's impact and its possible new role are explored in this Backgrounder.
The Washington Post reports some experts believe the fifty-year-old Gates "could fundamentally alter the methodology of philanthropy" after he begins to spend more time at the foundation. The Buffett grant likely means Gates will substantially alter the scale of giving for global health causes. Buffett says he plans to give shares worth about $1.5 billion this year to the Gates Foundation, followed by yearly gifts of around the same amount each year thereafter, and it will be required to annually spend that amount (Fortune). That total is roughly what the foundation doled out last year on its own and is about equal to what UNICEF spent in 2004. Overall, the Buffett grant combined with Gates Foundation assets creates a $60 billion colossus dedicated mainly to global health issues. Newspaper reports have compared that to the $12 billion or so UN agencies spend per year. The new endowment still does not compare to yearly sums given out by rich countries and the World Bank, which totaled about $106 billion in 2005, says the Financial Times. But the paper notes private foundations can be more flexible and less vulnerable to political pressure than government-linked aid agencies, citing the Soros Foundation and its work in the former Soviet bloc as an example.
It was not immediately clear how the new money would be spent. Gates indicated in a press conference Monday that health causes would be a main feature, saying "There is no reason we can't cure the top 20 diseases" (AP). His foundation has already been closely involved in Africa, from vaccinations to trying to stop the spread of HIV/AIDS. The new money could allow Gates to expand into development work. A recent CFR Task Force on Africa notes the U.S. government's rising commitment to humanitarian spending but says long-term investments for growth are flat and little is set aside for democracy promotion.
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