Disbursal Of Fortune
"In business you look for the easy things to do . . . and fortunately you find them sometimes," Warren Buffett said yesterday. "Philanthropy is a tougher game."
Buffett, the legendary investor who started 50 years ago with $105,000 and turned it into $44 billion, explained that in business you seek the path of least resistance and don't go looking for problems. The whole purpose of philanthropy, though, is to wade into the gnarliest, most intractable problems you can find and then try to solve them.
Following that logic, the world's second-richest man has just made life a lot tougher for Numero Uno.
Buffett's remarks came at a ceremony at the New York Public Library in which he formally pledged the bulk of his fortune -- a total gift of $31 billion, give or take -- to the Bill & Melinda Gates Foundation. There's one big string attached: The money will come in yearly installments of roughly $1.5 billion, and the Gates Foundation has to spend every penny that same year.
Spending an extra $1.5 billion a year sounds like a problem any institution would love to have, but think about it. The Gates Foundation, already the biggest philanthropy in the country by far, has to double its annual spending. That means finding productive ways to disburse an extra $4 million a day, including Saturdays and Sundays -- and Bill and Melinda won't be allowed to just take the money out into the back yard and burn it. Buffett will be watching, and he joked to Gates that "I won't grade you more often than daily" on how the money is being used.
I should note that both Warren Buffett and Melinda Gates sit on the board of directors of The Washington Post Co. It's hard to write objectively about people who help run the company you work for, especially when they do things that are praiseworthy; you risk sounding like a suck-up. But there are two fascinating stories here, neither of which I could ignore.
One is the story of Buffett, who spent his life amassing unimaginable wealth, but "all the way along," he said yesterday, "felt that it should go back to society." He famously announced years ago that he would not bequeath his fortune to his three children for their personal use; now he has followed through. He will give roughly $1 billion each to the three charitable foundations the children have established -- a fraction of what he's giving to the Gates Foundation. Buffett said he considered himself just a man who was lucky enough to be born in the right place at the right time, with the "right kind of wiring" to be successful in the American system.
The other fascinating story is that of the Gates Foundation, which is set on changing the world.
Bill Gates announced earlier this month that he will surrender some of his duties at Microsoft in order to spend more time on the foundation. Listening to him and Melinda speak at yesterday's ceremony, you got a sense of how mind-blowingly ambitious the foundation's agenda really is.
They talked about the critical health issues facing billions of people around the world who live in dire poverty, especially HIV-AIDS, tuberculosis and malaria, which Melinda Gates called "the big three." They talked about rural development in sub-Saharan Africa. They talked about microlending, which they've been studying with an eye toward a new initiative.
Then they switched gears and talked about the foundation's campaign to reshape secondary education in the United States. The foundation has been focused on trying to reform failing high schools, with mixed results. Gates now operates 19 small high schools in New York City where graduation rates have improved dramatically, although test scores have lagged. An attempt to rescue failing Manual High School in Denver, on the other hand, didn't work -- the Gates prescription of splitting it into several smaller schools turned out, in that case, to be precisely the wrong approach.
The real question, it seems to me, is whether any one organization, even one with essentially unlimited resources and world-conquering managers at the helm, can get its arms around so many big issues. Then again, Buffett has a pretty good track record of evaluating a given organization's prospects. I hope he's right this time.
Buffett recalled yesterday that he amassed his original stake of $105,000 from people who thought he would do a better job than they could of investing the money. Now he has decided that Bill and Melinda Gates can do a better job than he could of dispensing that money. "It was a simple decision," he said.