New Internationalist

The flip side to Bill Gates’ charity billions

April 2012

Microsoft’s former CEO has made record-breaking donations to global health programmes – but an investigation by Andrew Bowman reveals some unpleasant side-effects.

Last year, Bill Gates reminisced in the Huffington Post about his first trip to Africa in 1993. ‘I saw that many of the world’s lifesaving, life-enhancing discoveries were not available in Africa,’ he said. ‘That was deeply upsetting… I became convinced that if science and technology were better applied to the challenges of Africa, the tremendous potential of the continent would be unleashed and people could be healthier and fulfil their promise.’ Having spent 18 years making as much money as possible with Microsoft (the computer software company he co-founded in 1975), in 1994 Gates started giving it away.

Philanthropic funds are common among the super-rich in the US; they enable tax avoidance provided five per cent of net investment assets are given away annually. What quickly set Gates’ fund apart was its orientation towards the poor – rather than élite culture or religion – and its sheer size.

Photo of Bill Gates: World Economic Forum Under a CC Licence
Bill Gates Photo of Bill Gates: World Economic Forum Under a CC Licence

Targeting global health and US education, Gates’ giving rapidly ballooned into the billions. In 2006, his friend Warren Buffet (the business magnate currently ranked the world’s third richest person) pledged $31 billion in company stock to the Bill and Melinda Gates Foundation. Combined with Gates’ committed assets of over $30 billion, this made it arguably the biggest philanthropic venture ever. That year, its Global Development Programme extended its activities to agriculture and economic development and, with projects multiplying, Gates began working full-time on philanthropy in 2008.

In 2010, the Foundation gave $2.5 billion in grants – 80 per cent to international projects. In total it has disbursed over $26 billion, most of it to global health. To put these figures into perspective: since 1914 the Rockefeller Foundation has given $14 billion (adjusted to today’s values). Only the US and British governments give more to global health today. The World Health Organization (WHO ), meanwhile, operates on less than $2 billion a year.

The Foundation’s achievements are undoubtedly impressive. Through supporting vaccination programmes, for example, it claims to have saved nearly six million lives. With rich world enthusiasm for foreign aid wavering, on 26 January this year Gates committed a further $750 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria – an organization he claims saves 100,000 lives a month. Admirers credit the Foundation with putting global health back on world leaders’ agendas and, through Gates’ Giving Pledge initiative, encouraging several other US multi-billionaires to pledge their wealth to charity. What’s not to like?

Accountable to whom?

Philanthropy – and particularly philanthropy on this scale – isn’t a black-and-white issue though, and important questions have been raised about the way the Foundation operates, and the impact of its work.

The first question concerns accountability. While only around five per cent of the Foundation’s annual global health funding goes directly to lobbying and advocacy, this money (over $100 million) talks loudly. Gates funds institutions ranging from US university departments to major international development NGOs. The Foundation is the main player in several global health partnerships and one of the single largest donors to the WHO. This gives it considerable leverage in shaping health policy priorities and intellectual norms.

Gregg Gonsalves, an experienced AIDS activist and co-founder of the International Treatment Preparedness Coalition, welcomes the Foundation’s funding, but is concerned about its power. ‘Depending on what side of bed Gates gets out of in the morning,’ he remarks, ‘it can shift the terrain of global health.’

In 2010, the Gates Foundation gave in grants $2.5 billion The World Health Organization, meanwhile, operates on less than a year $2 billion

The Foundation’s 26 strategies are reviewed annually, and although CEO Jeff Rakes stresses that it is making ‘a systematic effort to listen’ to grantees, Gonsalves and others are sceptical: ‘It’s not a democracy. It’s not even a constitutional monarchy. It’s about what Bill and Melinda want. We depend on them learning, and it’s not as if there are many points of influence for this.’

‘The Foundation is more than a collection of grants and projects,’ says Dr David McCoy, a public health doctor and researcher at University College London and an advisor to the People’s Health Movement. ‘Through its funding it also operates through an interconnected network of organizations and individuals across academia and the NGO and business sectors. This allows it to leverage influence through a kind of “group-think” in international health.’ In 2008 the WHO’s head of malaria research, Aarata Kochi, accused a Gates Foundation ‘cartel’ of suppressing diversity of scientific opinion, claiming the organization was ‘accountable to no-one other than itself’.

Seeking miracles

In what direction, then, has the Foundation been pushing global health policy? Warren Buffet once said of his approach to finance: ‘I don’t look to jump over seven-foot bars. I look around for one-foot bars I can step over.’ Gates asserts his philosophy of philanthropy to be the opposite: ‘We should be looking around for the seven-foot bars; that’s why we exist.’

This entails game-changing technologies, specifically vaccines – ‘a miracle because with three doses you can prevent deadly diseases for an entire lifetime’. Just as a vaccine eliminated smallpox in the 20th century, science could, Gates hopes, do the same for AIDS, malaria and tuberculosis in the 21st. Research on new drugs and vaccines has been the single largest destination for his funds, receiving 36.5 per cent of grants given between 1998 and 2007.

Through the public-private GAVI Alliance – which Gates helped found a decade ago with an initial grant of $750 million and which aims to increase access to immunization – vaccines for Hepatitis B and the HiB bacteria have been brought into widespread use. GAVI’s current focus is on new vaccines for pneumococcus and rotavirus – causes of pneumonia and diarrhoea – which could, it suggests, save nearly 700,000 lives by 2015.

Making greed good?

Coupled with a belief in science and innovation is Gates’ vision of ‘creative capitalism’. Setting out his approach at the 2008 World Economic Forum in Davos, he said: ‘There are two great forces: self-interest and caring for others.’ To reconcile the two, the Foundation pursues partnerships in which, guided by NGOs, academics and assorted ‘stakeholders’, donor funds are used to overcome the ‘market failures’ which deny the poor access to medicine, by paying pharmaceutical companies to sell their products cheaper and pursue research projects they would otherwise ignore.

Through GAVI, the Foundation claims to have lowered the costs of Hepatitis B inoculations by 68 per cent, and is supporting a $1.5 billion ‘advanced market commitment’ to develop pneumococcal vaccines.

For supporters, it’s a win-win: the poor get new medicines faster and cheaper; and, as the Financial Times explains, it’s a leg-up for pharmaceutical companies ‘seeking to expand into faster-growing, lower-income countries where they need to charge less and co-operate more’ to share the risks of development.

The arrangements have, however, created concerns. As Tido von Schoen Angerer, Executive Director of the Access Campaign at Médecins Sans Frontières, explains, ‘The Foundation wants the private sector to do more on global health, and sets up partnerships with the private sector involved in governance. As these institutions are clearly also trying to influence policymaking, there are huge conflicts of interests… the companies should not play a role in setting the rules of the game.’

The Gates Foundation is one of the single largest donors to the World Health Organization. This gives it considerable leverage in shaping health policy priorities

The Foundation itself has employed numerous former Big Pharma figures, leading to accusations of industry bias. Many campaigners see loosening intellectual property laws as a better way of increasing access to medicines, both in lowering prices through generic competition and in enabling innovation outside patent-hoarding companies.

However, Microsoft lobbied vociferously for the World Trade Organization’s TRIPS agreement (the agreement on trade-related aspects of intellectual property), which obliges member countries to defend patents for a minimum of 20 years after the filing date. As recently as 2007, Microsoft was lobbying the G8 to tighten global intellectual property (IP) protection, a move that would, Oxfam said, ‘worsen the health crisis in developing countries’.

Global access agreements – to keep prices low and share results – are required for companies receiving Foundation money, von Schoen Angerer says, ‘but could they go further? Definitely yes. In examples like GAVI, industry gets quite beneficial deals.’ Gonsalves, himself HIV positive, explains, ‘I would be dead were it not for the pharmaceutical industry. That said, a lot more people will be dead if we don’t have robust generic competition.’

The Gates’ mettle will be tested around the combustible issue of IP in middle-income countries. Big Pharma is sometimes willing to relax IP for the world’s poorest nations, but rarely in emerging markets – which still contain most of the world’s poorest people.

Philanthro-capitalism vs democracy?

Gates’ philanthropy seeks not just to make businesses more charitable, but to make charity more business-like. Dubbed ‘philanthrocapitalism’ or ‘venture philanthropy’, the approach is based on NGOs competing for grants with their performance evaluated using business metrics.

According to Gates, ‘our net effect should be to save years of life for well under $100; so, if we waste even $500,000, we are wasting 5,000 years of life.’ Under these terms, the best results are achieved through ‘vertically’ funded projects – interventions targeted at specific diseases or health problems, largely bypassing existing health systems. The pay-offs from ‘horizontal’ integration with public-health systems can, in contrast, be comparatively slow to materialize and hard to measure.

A study in the Lancet in 2009 showed only 1.4 per cent of the Foundation’s grants between 1998 and 2007 went to public-sector organizations, while of the 659 NGOs receiving grants, only 37 were headquartered in low- or middle-income countries.

Depending on what side of bed Gates gets out of in the morning, it can shift the terrain of global health

In many Majority World countries, state healthcare was eviscerated by structural adjustment programmes enforced by the World Bank and International Monetary Fund, and by the continued loss of skilled personnel in globalized labour markets. Now, says McCoy, NGOs have stepped into the breach but have also created a ‘fragmented “patchwork quilt” landscape of healthcare provision’ which governments struggle to co-ordinate and align to national priorities.

This has potentially serious implications. Polly Clayden of i-Base, an HIV information and activist organization, says, ‘some of the research Gates funds is ill-advised, but if you had HIV and somebody was paying for your antiretroviral drugs in a trial, perhaps you wouldn’t really care [who provided it]. What you really want is for those people to be treated.’

‘However,’ she warns, ‘the problem is sustainability. Donors are quite capricious: AIDS might be the priority one year, and then suddenly they will go on to something else.’

Research by Devi Sridhar at Oxford University warns that philanthropic interventions are ‘radically skewing public health programmes towards issues of the greatest concern to wealthy donors’. ‘Issues,’ she writes, ‘which are not necessarily top priority for people in the recipient country.’

The situation is replicated at an international level. With the rise of health partnerships, the proportion of global health funding channelled through the UN fell from 32 to 14 per cent between 1990 and 2008, placing major limits on the possibility for poorer nations to influence international health policy. Although the Gates Foundation provides considerable support to the WHO, the money is, as with much of the WHO’s funding nowadays, earmarked for preconceived projects rather than the decisions of the World Health Assembly.

For critics, then, the way ‘venture philanthropy’ focuses on measurable impact may obscure the less tangible, but equally important, goals of democracy and empowerment. As the philanthropy analyst Michael Edwards has asked: ‘Would philanthrocapitalism have helped fund the civil rights movement in the US? I hope so, but it wasn’t “data driven”, it didn’t operate through competition, it couldn’t generate much revenue, and it didn’t measure its impact in terms of the numbers of people who were served each day. Yet it changed the world forever.’

The fruit or the trees?

Mark Harrington, Director of the Treatment Action Group, an AIDS advocacy thinktank which has received Foundation money in the past, also feels that, ultimately, democratically accountable governments should solve global health problems, but that in the absence of their commitment there is a need for pragmatism.

‘Medical research and global health are both public goods: the benefits accrue to everyone, even though only some people pay for them. Industry will only do it if they see return on investment; and philanthropists, well, it’s better Gates doing this with his money than what the Koch brothers [funders of the rightwing Tea Party political movement in the US] are doing with theirs. Do I think it’s good that we live in a world where some people have so much money? Not really, but I don’t get to choose that. We have to work with the world the way it is.’

Appealing to the mega-rich to be more charitable is not a solution to global health problems. This kind of philanthropy is either a distraction or potentially harmful

McCoy insists, however, that it is important to mount a challenge: ‘Appealing to the megarich to be more charitable is not a solution to global health problems. We need a system that does not create so many billionaires and, until we do that, this kind of philanthropy is either a distraction or potentially harmful to the need for systemic change to the political economy.’

Carlos Slim, the Mexican multi-billionaire who replaced Gates at the top the world’s richlist (due to Gates’ charity), likened philanthropy to owning an orchard: ‘You have to give away the fruit, but not the trees.’ He and Gates are products of an economic system that has produced monopolies and redistributed wealth upwards for 30 years. Parallels may be drawn between the inequalities of today and the Victorian era, when health provision for the poor depended on the largesse of the rich. Oscar Wilde observed of the philanthropists of that era: ‘They seriously and very sentimentally set themselves to the task of remedying the evils that they see in poverty, but their remedies do not cure the disease: they merely prolong it.’ Then and now, as Wilde said, ‘the proper aim is to try and reconstruct society on such a basis that poverty will be impossible.’

Front cover of New Internationalist magazine, issue 451 This feature was published in the April 2012 issue of New Internationalist. To read more, buy this issue or subscribe.

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  1. #1 Jolayemi Olakunle Isac 05 May 12

    I want to show my great appreciation and delight to great people with LARGE HEART to help humanity and environment of which BILL GATES is great amongst other cheerful giver
    I will appreciate to get more information in grant, AID and funding of medical waste

  2. #2 David Rubenstein 09 May 12

    The headline suggests that the charitable giving of Bill Gates has negative consequences, but the article doesn't provide much evidence for that suggestion.

    The article suggests that people are dying because capitalism provides excess rewards to a small number of individuals, but the article doesn't provide much evidence for that suggestion.

    What a waste of time.

  3. #3 ciderpunx 09 May 12

    <q>The article suggests that people are dying because capitalism provides excess rewards to a small number of individuals,</q>

    It does? Whilst I have some sympathy with that point of view I don't see where is is stated or implied in the article.

    If anything the OP is talking about the danger of handing control to private business rather than states, especially in a context of state healthcare provision having been largely dismantled as a result of structural adjustment policies. Private mega philanthropy provides large subsidies to selective parts of the healthcare establishment. With no state presence to counteract that market distortion -- thus destabilizing an already volatile situation. I think that that is what the ’flip-side’ in the title is referring to.

  4. #4 Briang 16 May 12

    It is nice that these foundations can help smooth the rough edges of capitalist greed, but why don't those corporations forget the loopholes and pay their taxes so the governments have money to operate effectively and deal with their priorities.

  5. #5 Tom Ash 18 May 12

    Briang: ’It is nice that these foundations can help smooth the rough edges of capitalist greed, but why don't those corporations forget the loopholes and pay their taxes so the governments have money to operate effectively and deal with their priorities.’

    Western governments rarely devote much of their tax revenue to the global poor (as opposed to, say, domestic eduction/military spending/culture/etc.), so this would hardly be equivalent...

  6. #6 Ahmad seeyar kakar 14 Jul 12

    We belive on life after death so what are you doing with your life you are old now like old lion when thinking of dying your money will eat you. you know here is an advise just leave every thing and be ready for death.

  7. #8 Timothy White 22 Dec 12

    re David Rubenstein's comments. No David you're right, it is hard to specifically produce hard evidence when the scope of the issue is vast. Normally, in evidence-based reasoning the testimonials of experts, in this case the various aid-workers and organisations referred to would be considered an adequate source of supporting information, given that these are the front-line workers with practical knowledge and experience in the field.
    On the other hand, you have proffered not one piece of experience-based evidence to support your own view. Perhaps you have first-hand experience dealing with some of these issues?

  8. #9 Simon Barnett 08 Jan 13

    The web is in serious need of more articles like this exposing Gates' ’philanthropy for what it is. It's very evident he is a malevolent social darwinist. ’Philanthropy’ in association with Monsanto is anything but.

    This is not conspiracy theory - it's right-out-there imperialism:

  9. #16 John Fro 12 Nov 13

    A lot of McCoy's comments in the article sound like sour grapes for the most part. ’Why does BG get to make these decisions and not me?’ could summarize the laments very well. No, the problem is not that his money is not controlled by unaccountable bureaucracies, but that he essentially uses aid money to greenmail third world governments into buying products he gets a share of the profits in, whether it's software, or patent-related vaccines, or patent-related refrigeration units, etc. He's making more money on his charity than he's losing, once you account for all the things he gets people to buy from him. His net worth has gone up not down since this all began.

  10. #17 Future Goy 14 Nov 13

    Only somebody from Microsoft could look at a place like India or Bangladesh and conclude that what it really needs is more people.

    The road to a depleted environment is paved with good intentions.

    Future generations will curse Norman Borlaug and Bill Gates as they fight each other for the last scraps of Soylent Green.

  11. #18 Takele 03 Feb 14

    I like this article which supports my doubts about this big fans of African development. If we ever continue investigating, there will be more horrible hidden things underneath.

    God May Protect the Poor from the voltures’’

  12. #20 anon 20 Mar 14

    Briang: ’It is nice that these foundations can help smooth the rough edges of capitalist greed, but why don't those corporations forget the loopholes and pay their taxes so the governments have money to operate effectively and deal with their priorities.’

    'governmnets... to operate effectively'

    What. You think this is how it works? Just look at the US government, you can see how 'effective' shutting down for 16 days is. Congress is clearly inept, we need leaders like Gates to try to set things straight.

    True about the loopholes though.

  13. #24 tobi tayo 25 Oct 14

    I really appreciate this organization for his hand of generousity extended to the less priviledged...and also I want to humbly know how I can also benefit from Bill nd Melinda...thnxs and God bless u

  14. #28 misterfloppy 03 May 15

    This is all very nice, patting Bill on the back, and all that. Unfortunately some of the vaccinations have been found to include a steralisation drug.
    Furthermore, the polio vaccine used in India leaves live polio bacilli in faeces for several days, responsible for a sudden increase in cases.
    The latter may be excused as an oversight, but the former is rather sinister and suggests that Bill and co have overstepped their stated brief into eugenics territory. Perhaps we shouldn't be surprised from someone who has mostly been surrounded by sycophants for decades. It must affect one, making you lose touch with normal everyday people - and ethics even, when you can influence the lives of so many.

  15. #32 Thomas Lundgren 20 Nov 15

    This is about a new Medical Preventiv Reseach Charity MPRC
    This information is about a Charity that want to support Medical Prevention Reseach around the globe, as prevention reduce the suffering from diseases.
    This charity will support local medical professionals ( human Dr and Veterinarians)
    who have got in touch with local diseases and started medical research to find the cause,how to treat and prevent the disease
    Look at the web page for Donation information
    If you donate to this charity you become a member of this MPRCharity
    We apreciate any kind of donation that support this preventive medical reseach Charity
    This charity have supported a medical research to find a new method of Buruli Ulcer treatment to reduce the need of amputations of legs / arms on kids in tropical climate and also research to find Xenoestrogens behind reproductive organ diseases as fibroids and breast cancer in ghana
    And we need donations now to continue the support of Medical Preventive Reseach
    Best regards MPRCharity president Thomas Lundgren

  16. #33 Sudha Bhasin 04 Dec 15

    Bill Gates has done tremendous work by helping billions of people in curing their disease.NGo's etc. I am really thankful to him for thinking about others. Out of this so many people must have survived and some of them must have also got new lives. Very few people think on these lines. I really have no words to express for his kindness. And I also hope Carlos Slim also will do something like this. And would also like to ask if Indian NGO requires some fund for dumb and deaf children. Will we get some help for this. It is a humble request from my side if some fund can be raised for such type of children. Even still if Bill Gates would like to extend some help it will be our pleasure.


  17. #38 Craig Talbert 30 Jul 16

    Hi Mr Gates I wrote a rather long letter to you a few minutes ago and I went to send it and found that I had lost my WIFI connection I hope it found it's way to you because it took quite while to write. I just now noticed the letters that other people wrote and confirms what I told a friend of mine that you are a humanitarian and have deep regard to your fellow humans. This friend of mine and I were having a discussion about Mr Trump and I brought your name up. I said Mr trump does not have the deep regard of his fellow humans the way you do and the topic of tax's came up I said Mr Trump is having a problem with showing where his tax dollars are and even though my friend said he would not vote for him he came to his defense saying he shouldn't have to show where his tax dollars are. I did not dispute this because I have no idea of the legality of it and then I brought your name up and said how much you have done for your fellow human beings and he said it's all a tax write off for you. I couldn't disagree because I don't know but I could say however those funds are used I know they were used in a positive function. I just recently went back to school taking advantage of my GI bill at the age of 63 I registered in to EvCC started in spring quarter of 2015 took the summer off and went back for fall and winter quarters and the day spring quarter of 2016 started I got double pneumonia and missed spring quarter and summer quarter which I would have gone but I was still on oxygen until well into June I held B average in math and a C in English and once I got those two subjects out of the way I could concentrate in music and I accidently enrolled into Drama I found that I really liked it. I was going to school and having the time of my life before this I was a Tile setter for forty years and now I'm embarking in a whole new career again at the age of 63 but then as luck would have it I got pneumonia but I hope to go back this fall again I hope. when I was at home recovering FAFSA sent me my grant anyway. They sent three checks at $1,000 plus apiece and being short of finance's I used it for rent and so forth so I hope I can get reinstated at EvCC anyway enough about me I told my friend that regardless of whether it was a tax write off or not I said what you were doing far out weighed what Mr Trump was doing with what ever his plans are.Which I'm sure to try and become president it seems to me that he has never even been a school principle let alone president of the United States.So when I got to this site it confirmed my statement to my friend about the humanity in your doings and there wasn't much more he could say.I'm a big Bernie Sanders fan and hearing all the negativity I have heard about both of the other people running for president I could not think that the voting system is not right. the last presidential campaign it was collage votes and now its super delegates and delegates along with Paul Ryans outraised whatever like I said I have no idea what all these new terms are. I hope the first letter I wrote to you and Mrs Gates about an hour ago got through because this letter is not very heart felt than the one I wrote earlier. I'm really tierd I will try to write again in the morning Sincerely, Craig A.Talbert born and raised in Seattle (Ballard)Thank You for your time and caring for people.

  18. #45 David Williams 06 Dec 16

    It's the New World Order. Where government or others dole out healthcare as they seem fit and to those they determine as acceptable recipients. If they determine there is no cure, will they want try for the cure. Bill Gate's vision seems a little like it is from 1984. Doled out by tghe United Nations, we the people of the United States can never allow that or the internet passing control over too the U.N.

    It's has a song, and it goes like, Hey Big Brother,... Don't need or want, I'm all for better health care. But not when it is controlled by a government of gov like entity. We had an attempt at that with Obamacare and it has been a financial mess. This is a very Liberal site, they keep pushing for a one government ewe

  19. #48 Mary Rosealee 11 May 17

    Why is there such an emphasis on vaccinations to help manage disease in the world? I am not a scientist but I know there is an enormous amount of scientific data on the negative impact of vaccinations. Why not, as Oscar Wilde has suggested, work to eliminate poverty and not just seek to put a band aid on its wounds?
    Philanthropy exists because of the prevailing attitude towards labor, in other words, huge fortunes are build using the labor of others re: not paying a living wage, not providing health care benefits, abusing cheap foreign labor, and so on. If everyone were paid a ’Living Wage’ the huge fortunes would not be built in the first place.
    There is an enormous disparity between wealth and poverty in this country. And the gap is getting larger.
    As for me, I am what is referred to as a 'non-traditional' read: older student at Portland State University and last year enrolled in a course called 'Service Learning' where we engaged in community, service-learning projects. Our class volunteered at the Oregon Food Bank for a day, per our instructors suggestion, helping package large donations of food, for shipping to rural Oregon counties. At the time there was a visiting scholar from Japan, attending the course and accompanying us on field trips.
    When asked if such large food bank operations existed in Japan, his response was, ’no, not at all, we do not have such extremes of wealth and poverty in Japan. We take care of eachother,’ he continued.
    Again I must revisit the question, in a country with as many resources and with such advanced technology as ours, why do we have such great accumulations of wealth and conversely, such extreme poverty?
    There are many factors contributing to this and to simplify here, saving money on labor is but one example. We must stop enacting laws that support and protect the wealth of the few. We must think and behave like a 'civilized country' and realize that everyone deserves access to health, education not to mention, the realization of their potential.

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This article was originally published in issue 451

New Internationalist Magazine issue 451
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