Gates’ divorce and the road ahead for the foundation
The shocking announcement of divorce made by Bill and Melinda Gates after 27 years of marriage sent a wave of speculation and uncertainty about their billion-dollar worth charity.
- How will the foundation function after the split?
- What impact will the divorce have on fund flows into the foundation?
- Is there a parallel with MacKenzie Scott and Jeff Bezos?
The Bill and Melinda Gates foundation was established right after they became parents. The couple was deeply troubled to read about millions of children from developing countries in Asia and Africa losing their lives to curable diseases. The use of wealth for solving pressing issues and offering quality life to every person was a driving force behind the launch of the Gates foundation. This billion-dollar philanthropy focuses primarily on tackling issues around global health, poverty and education. The foundation funds annually an average of about $5 billion towards projects in global health, education and bridging income inequality. The charity is worth nearly $50 billion.
The foundation has so far spent nearly $54 billion in various countries and through various initiatives. When the world came to a standstill due to COVID-19, the foundation reportedly spent $1.75 billion on projects to fight the pandemic. Some of the funds were used for the distribution of jabs of the COVID-19 vaccine, procuring personal protective equipment for frontliners, and for supplying testing kits to some of the poorest parts of Sub-Saharan Africa and South Asia. In the past, the foundation has also been lauded for supporting efforts to fight epidemics like ebola outbreak in 2014.
Major investment changes were made right before their divorce including the sale of all their Apple and Twitter stocks. They also bought new stakes in a South Korean e-commerce company Coupang.
How will the foundation function after the split?
Currently, Bill and Melinda are co-chairs of the Gates foundation. Business tycoon and philanthropist Warren Buffett is the trustee of the foundation. The foundation has investments in Microsoft stock worth $20 billion as well as a vast portfolio of stocks in companies such as Berkshire Hathaway, Walmart, Caterpillar, US company Waste Management, and the Canadian National Railway Company.
Bill and Melinda seem to have different interests when it comes to funding social causes. Bill for decades has been a proponent of clean energy and has invested his time on global health issues. Melinda has been a champion of gender equality, focusing on girls’ health as she strongly believes that poor health has consequences not only in women’s domestic lives but also in their professional lives. She also has her own venture capital fund called Pivotal Ventures that supports gender empowerment. The foundation has adopted a decoupling strategy for several years now. The common interests are pursued through the foundation and their personal passion projects through independent entities and this may continue after their divorce.
The Gates launched the Giving Pledge with Buffet. It is a campaign that encourages the wealthy to give away at least 50% of their wealth to charity. It currently has 200 pledgers including the Gates.
What impact will the divorce have on fund flows into the foundation?
The distribution of family assets following the separation is complicated by the fact that they are much larger than the money invested in the foundation. It will be up to the terms of the divorce to determine the future of the foundation and how funds will be allocated and distributed. Bill Gates is the fourth richest man in the world and his wealth is estimated by Forbes at $130 billion. Both he and Melinda are determined to work together for the charity.
Their marriage was a union of different approaches when it came to pursuing philanthropy. Bill brings his technocratic, data-centric ideas while Melinda adds more humane and community-rooted values. How the divorce affects this amalgamation of ideas and values will be something to look out for.
Is there a parallel with Mackenzie Scott and Jeff Bezos?
MacKenzie Scott after her divorce with Amazon founder Jeff Bezos diverted a large bulk of her wealth towards charity and later became an influential philanthropist. After Scott’s divorce to Bezos, she received 4% stake in Amazon, estimated to be worth about $36 billion, with which she started her philanthropy.
Since her divorce she has funded projects with non-profits, universities, community development groups and legal organisations and donated nearly $4 billion of her shares. She has also signed the Giving pledge, promising to give away half of her fortune to charity over her lifetime. Comparing Melinda to her maybe unfair as Melinda has already established herself as a serious philanthropist.
Bill had reportedly planned to leave $10 million each for their three children while Melinda has expressed the desire to increase the inheritance following the divorce. No specific details have been disclosed. The high-profile split has set new precedents in philanthropy for other wealthy couples.
Keywords: Philantrophy, Education, Poverty, Global Health, Pandemic, Giving Pledge, Covid-19
Institution: Gates Foundation, Amazon, Berkshire Hathaway, Walmart, Caterpillar, US Company Waste Management And The Canadian National Railway Company, Pivotal Ventures
Country: United States, Africa, India
People: Bill Gates, Melinda Gates, Jeff Bezos, MacKenzie Scott, Warren Buffett