Bill and Melinda Gates have given away more than $45 billion through the Bill and Melinda Gates Foundation, which primarily works to combat global poverty. Their work has saved millions of lives. At the same time, the Gateses themselves have just kept getting wealthier. (Gates’s fortune surpassed $100 billion once before, briefly in 1999 at the height of the dot-com boom. Adjusted for inflation, that’d be $150 billion today.)
“[Bill] Gates was worth $54 billion in 2010, the year the Giving Pledge debuted; he’s worth $97 billion today. [Warren] Buffett’s wealth has also nearly doubled, to $90 billion, despite annual transfers of Berkshire Hathaway stock to the Gates Foundation and the four foundations controlled by his three children,” Callahan wrote.
With some billionaires, there’s a simple explanation for why they don’t give away more money: They don’t really feel like it. The Senate just took a step toward actually lowering US greenhouse gas emissions
But that doesn’t seem like a fully satisfying explanation when it comes to Gates, Buffett, or other billionaires who’ve pledged to give away their wealth before they die. I want to speak up in their partial defense here: It’s actually shockingly challenging to effectively give away vast sums of money, especially at the rates billionaires would need to give to keep up with their recent gains on the stock market.
Philanthropy is harder than you think
It can strain credulity that it’s really that challenging to give away money. But when you look at the track record of many poorly planned, failed philanthropy projects, it gets clearer.
The charity evaluator GiveWell, which researches promising interventions, found that these failures aren’t the exception but the norm. “We think that charities can easily fail to have impact, even when they’re doing exactly what they say they are,” they write .. https://www.givewell.org/giving101/The-Wrong-Donation-Can-Accomplish-Nothing . “[M]any of the problems charities aim to address are extremely difficult problems that foundations, governments and experts have struggled with for decades. Many well-funded, well-executed, logical programs haven’t had the desired results.”
GiveWell recounts what went wrong with one intervention that didn’t live up to expectations: PlayPumps .. https://www.vox.com/2015/8/4/9092053/facebook-givedirectly-donation-cash , a merry-go-round that was also supposed to pump water and which replaced standard pumps in some villages. “Children found playing on the PlayPumps exhausting and women ended up having to push the merry-go-round around themselves to pump water; the PlayPumps were more expensive, pumped less water, and were more challenging to maintain than the hand pumps they had replaced.”
A history of such disappointments can make donors understandably unsure where their money will actually do good. And, Callahan observes, billionaires are really leery of spending money in a sector they don’t understand and where they know many things don’t work.
I want to be clear here: Program failures are to be expected, even applauded. If a nonprofit is trying new things, which it should be, and conducting careful research to determine whether its programs are cost-effective or have unintended consequences, which it also should be, then sometimes it’ll find that a program failed. Trying new things, learning about them, and adjusting accordingly is the right way to make progress in a new domain.
But this also suggests that it’s going to be difficult to spend money usefully fast. It’s unwise to start a program at large scale, affecting hundreds of thousands of people, because it might not be effective — and you might even do harm if your program has unintended consequences.
When the Gates Foundation has found an intervention that works and continues to work at scale, it’s poured in more money. Fighting malaria .. https://www.gatesfoundation.org/What-We-Do/Global-Health/Malaria , for example, is a case where money continues to make a big difference even at scale, and the Gates Foundation has committed $2 billion to the fight.
But if foundations aren’t giving away money as fast as we’d like, that reflects, in part, that most causes aren’t like malaria: the fact that there’s an urgent need for $50,000, or $100,000, doesn’t mean that there’s a good opening to spend $2 billion.
Grants can go wrong — and require a lot of due diligence
I think a lot of what’s at work there is that foundations are understandably risk-averse, concerned with their own reputation, with avoiding disastrously bad grants, and with not getting scammed. Any foundation re-granting to smaller charities will worry a lot about the potential for a grant to backfire. One way that can happen, of course, is the program turning out to be a bad idea and hurting the people it was meant to help. Another way is the program being corrupt, a fraud, or worse.
Last fall, one case came to light that I expect every grant-reviewing officer has in the back of their mind as a worst-case scenario: A school in Liberia .. https://features.propublica.org/liberia/unprotected-more-than-me-katie-meyler-liberia-sexual-exploitation/ , funded by eager Western donors, allegedly ignored warning sign after warning sign as a senior staff member assaulted many of the young girls attending the school. Consistently applied accountability standards could have flagged what was happening at More Than Me .. https://www.vox.com/future-perfect/2018/10/24/17995536/liberia-girls-more-than-me-katie-meyler , the Liberian organization. A thorough grant reviewer would at least have noticed that the teachers had no teaching experience and the administrators no administrative experience.
So while due diligence doesn’t eliminate the risks of funding something really bad, it definitely reduces them. But it’s expensive and time-intensive. It also requires significant back-and-forth with nonprofits, meaning it isn’t costless for grant applicants either.
To make many more grants, an organization like the Gates Foundation needs to scale up its staff, oversight, and procedures. The Gates Foundation as an existing institution has some huge advantages here compared to any billionaire who wants to do good; a smaller or newer institution would have to develop, from scratch perhaps, the organizational capacity to evaluate grants carefully.
There really are a lot of ways for money to do good in the world
Callahan observes that the difficulty of giving — while a very real challenge any megadonor will run into — can also slide into a justification for ignoring the challenge entirely. And that’s tragic, as philanthropy remains a way to do extraordinary good.
Looking at a charitable landscape where many programs are ineffective, others can’t absorb tens of millions in new funding, and some inflict harm might make billionaires (or the rest of us) decide that there’s nothing we can do. But that’s not true at all.
There are absolutely high-impact, well-established giving opportunities out there, and many of them can make use of hundreds of millions of dollars in new funding .. https://www.vox.com/2015/12/1/9826838/best-charities-donate-2018-giving-tuesday . Many global health interventions scale well and need more money than they are getting. Charities that work for animals are typically profoundly underfunded. And there are lots of important problems where we still need to fund more basic research.
The challenges are real, but they’re surmountable. Moving slowly on donating your billions makes sense, as long as caution doesn’t slide into inaction