Philanthropy Inc

Times Staff Writer

John D. Rockefeller once brooded that giving away money intelligently was more difficult than making it. Bill Gates, who has surpassed the oil titan as history’s biggest philanthropist, doesn’t completely agree.

“I think both making money and giving it away well are quite difficult -- probably equally so,” the 49-year-old computer software giant wrote in an

e-mail exchange Tuesday night, just before he left for the economic forum in Davos, Switzerland.

“At one time I thought it would be confusing to be doing both at the same time,” Gates added. “But that has turned out OK.”


When the Microsoft co-founder and his wife launched the Bill & Melinda Gates Foundation five years ago this month, skeptics said he might be trying to win some friends -- at least some favorable attention -- amid his corporation’s antitrust struggle with the federal government.

Now, though, a growing chorus of outside admirers says that Gates and his $27-billion foundation are deeply involved in one of the most extensive philanthropic endeavors ever undertaken, one the World Health Organization says has already saved the lives of 670,000 children through vaccinations and will save millions more in coming years.

“This foundation has had an extraordinary impact on global health,” said Dr. Seth F. Berkley, president of the International AIDS Vaccine Initiative. “It has simply revitalized the entire field.”

Berkley pointed to the $750 million the organization had already donated to the global vaccination effort, an amount it pledged Monday to double. The British government singled out the Gates Foundation gift Tuesday in announcing its own $1.8-billion contribution over the next 15 years to the international vaccine drive.


With assets well more than twice that of any other foundation in the country, the Seattle-based Gates Foundation is swamped with requests for money -- 3,000 a month, including hundreds from people down on their luck, even though the organization does not make any grants to individuals.

Gates and his wife have concentrated on global health and U.S. education issues in the nearly $8 billion they have distributed so far. The foundation is headed by Patty Stonesifer, a close friend of Gates and former top Microsoft official, and by Bill Gates Sr., the software entrepreneur’s 79-year-old father, who is a lawyer. (Stonesifer is married to Michael Kinsley, The Times’ editorial and opinion editor.)

The younger Gates has thus inverted the historical model of Rockefeller, who chose his son, John Jr., to help run his philanthropy.

Despite Gates’ onetime prediction that he wouldn’t get seriously enmeshed in philanthropy until he was in his 60s, he is, by accounts of people in and out of the foundation, intensively focused on its work.

Gates and his wife personally sign off on any grant of more than $1 million.

Gates is especially interested in vaccines, lugging scientific journals on his travels and peppering experts with questions reflecting a broad and highly technical interest in vaccine development.

“He has really looked at the intricacies of this issue,” said Trevor Neilson, a former Gates Foundation official who is now executive director of the Global Business Coalition on HIV/AIDS, based in New York City.

“When he first got started,” Neilson said, “he read through an entire World Bank report -- only Bill would in his spare time be poring over World Bank reports -- that really explained how several million children a year die of vaccine-preventable diseases. He read that and it outraged him. And he really felt he had an ability to make an impact on the problem, sooner rather than later.”


Vaccinations, Gates said in the e-mail exchange, are a lot like software: “The upfront costs are very high,” he wrote, “but once you have a drug it can benefit everyone because of the low cost to manufacture.”

The $1.5-billion contribution to the global vaccine fund will be used to immunize children in more than 70 countries against a broad array of diseases, including diphtheria, measles, polio, whooping cough and yellow fever. It will also go toward efforts to develop vaccines for AIDS, meningitis and rotavirus, a diarrheal disease that kills 600,000 children a year, according to the WHO.

The foundation is also a big benefactor in the education field -- pledging, for instance, $1 billion for minority students majoring in technical fields, and dispersing hundreds of millions of dollars in grants to libraries and high schools.

Last summer, when Microsoft announced a major one-time cash dividend for stockholders, Gates said he would donate his estimated $3.3-billion share to the foundation, which would bring its assets to more than $30 billion. (Under law, foundations must generally disperse about 5% of their assets annually.)

Even in inflation-adjusted dollars, Gates has already easily surpassed Rockefeller as the largest donor ever, according to Dwight Burlingame, associate executive director of the Center on Philanthropy at Indiana University.

In comparison to the size of the nation’s economy, Rockefeller’s philanthropy may have been larger -- but with Gates and his wife personally owning about $50 billion in assets, mostly Microsoft stock, they may eclipse that benchmark as well, several philanthropy experts said.

“He’s not done yet. He’s not even 50 years old,” said Jean Strouse, a biographer of J.P. Morgan who is director of the Dorothy and Lewis B. Cullman Center for Scholars and Writers at the New York Public Library. “And he’s said he’s going to give away virtually his entire fortune.”

The foundation grew out of informal philanthropic work taken on in the early 1990s by Bill Gates Sr., who offered to help when his son told him he was enmeshed in Microsoft issues and swamped by requests from charitable groups. (Mary Gates, the elder Gates’ wife and the Microsoft chairman’s mother, died in 1994.)


In a speech last fall at the University of Washington, Gates, seemingly only half-jokingly, said success in the philanthropic field was much harder to measure than success in his other endeavors.

“In business, the market tells you when you’ve failed; in science, your instruments tell you,” Gates said. “In philanthropy, no one tells you. Everyone wants to be your friend.”



Giving giant

The Gates foundation is by far the largest in the U.S., with more than double the assets of the next biggest. Most of the Gates grants since its inception in 2000 have been to global health concerns. Largest U.S. foundations as of fiscal year end date:

Foundation: Bill & Melinda Gates Foundation

Assets (in billions): $26.8

2003 year end: Dec. 31


Foundation: Lilly Endowment Inc.

Assets (in billions): $10.8

2003 year end: Dec. 31


Foundation: Ford Foundation

Assets (in billions): $10.0

2003 year end: Sept. 30


Foundation: J. Paul Getty Trust

Assets (in billions): $9.1

2003 year end: June 30


Foundation: Robert Wood Johnson Foundation

Assets (in billions): $7.9

2003 year end: Dec. 31


Foundation: William and Flora Hewlett Foundation

Assets (in billions): $6.2

2003 year end: Dec. 31


Foundation: David and Lucile Packard Foundation

Assets (in billions): $6.0

2003 year end: Dec. 31


Foundation: W. K. Kellogg Foundation

Assets (in billions): $5.7

2003 year end: Aug. 31


Foundation: Gordon and Betty Moore Foundation

Assets (in billions): $4.8

2003 year end: Dec. 31


Foundation: Andrew W. Mellon Foundation

Assets (in billions): $4.7

2003 year end: Dec. 31


Gates grants

Global health: 54%

Education: 29%

Special projects: 7%

Pacific Northwest: 7%

Global Library program: 3%


Sources: Bill & Melinda Gates Foundation; the Foundation Center

Graphics reporting by Tom Reinken