The Bill & Melinda Gates Foundation will speed up its giving by increasing its annual payout by 50% to $9 billion within the next four years, the foundation announced Wednesday. It currently pays out around $6 billion annually.
The increase would propel the Gates Foundation — already the world’s leading private family foundation — further beyond other funders in the global development sector.
The additional funding will be used to advance the foundation’s work in existing focus areas, such as global health, gender equality, and education. The move comes in response to the “compounding global crises” that include the COVID-19 pandemic, rising inflation, war in Ukraine, and climate change, according to a press release.
Foundation Co-Chair Bill Gates also announced Wednesday via his Gates Notes blog that he would make a $20 billion gift to the endowment this month to help support the ramp-up in annual spending. The foundation said the gift “meets and exceeds” the pledge that Gates and ex-wife Melinda French Gates, also a co-chair, made last summer to contribute an additional $15 billion to the endowment.
Coupled with a $3.1 billion annual gift from former trustee and longtime friend Warren Buffett last month, Gates’ latest gift brings the foundation’s total endowment to roughly $70 billion. It has already spent $79.2 billion since 2000.
“Our focus will remain the same — but at this moment of great need and opportunity, this spending will allow us to accelerate progress by investing more deeply in the areas where we are already working,” Gates wrote in the blog post.
He urged governments and the private sector to do their part to combat “huge global setbacks” amid a pandemic that has stalled or reversed progress in areas such as poverty reduction, education, and the eradication of polio and other preventable diseases, among others.
Speaking at the Devex World conference Tuesday, Gates told Devex Editor-in-Chief Raj Kumar that because “pandemic preparedness is a benefit to the rich countries, it shouldn’t be thought of as aid in any way, shape, or form.”
“My giving this money is not a sacrifice at all. I feel privileged to be involved in tackling these great challenges, I enjoy the work, and I believe I have an obligation to return my resources to society in ways that have the greatest impact for improving lives,” Gates wrote, adding that he hoped “others in positions of great wealth and privilege will step up in this moment too.”
Gates also said that he plans to give all of his wealth, currently estimated at $114 billion, to the foundation — “other than what I spend on myself and my family” — and expects to move down and eventually off of the list of the world’s richest people.
Unlike her former husband, French Gates has not said whether she will leave the bulk of her estimated $10.2 billion fortune to the foundation. Interactions between Gates and French Gates since their 2021 divorce have been closely watched by philanthropy experts and grantees for clues about how the two might work together over the long term. The former couple have agreed that French Gates could leave the foundation next year if either she or Gates decides that they can’t work together.
The announcement of Gates’ large gift to the endowment comes amid speculation about whether Buffett, who had previously indicated plans to direct the majority of his wealth to the foundation upon his death, still intends to do so.
Anonymous sources recently told The Wall Street Journal that Buffett, the CEO and chairman of Berkshire Hathaway, was considering leaving his remaining undistributed shares in the company to the Susan Thompson Buffett Foundation. Buffett has so far not commented on the report beyond saying that it includes a “significant number of inaccuracies.” He did not specify what they were.
“Warren speaks for himself,” Mark Suzman, the CEO of the Gates Foundation, told Devex when asked whether the foundation could still count on receiving most of Buffett’s remaining wealth.
“We’re incredibly grateful for his ongoing support, and I do feel comfortable saying we have shared, discussed these spending plans with him, and he’s very excited by them,” Suzman said.
The foundation will remain focused on existing priority areas such as agricultural development, financial inclusion, sanitation, and education in the United States, he said. But that doesn’t mean it will just be “topping up and expanding our approaches in every case,” he added. The foundation will look to see if there are different models or approaches that could be adopted to help address issues like food security, Suzman said.
“I actually am literally in a set of meetings in the next couple of days with our teams to see whether, how we might be able to do some more both in the short term around the food security crisis but also ways in which we can more smartly link the response to longer-term climate adaptation issues,” he told Devex.
He cited CGIAR as an initiative that deserves more funding.
The foundation also is looking to see where there might be “some interesting overlap” between its domestic education program and its more modest global education program in areas such as the use of digital curriculum tools that have been developed throughout the pandemic.
“These are the kind of areas where we want to take a hard look at and see whether there are some real opportunities. And with our additional resources and our existing resources, we could make a signature contribution,” Suzman said.
Gates told Forbes that he consulted with French Gates, Suzman, Buffett, and the foundation’s board before moving forward with plans for the $20 billion gift to the endowment.
Ramping up its annual spending is among a series of consequential changes that the foundation has made over the past year amid the divorce of Gates and French Gates. Notably, approval of the plan to increase the payout to $9 billion by 2026 is the first major action by the foundation’s independent advisory board, which was formed earlier this year as part of a series of governance changes made after the couple split.
“Philanthropy has a unique role to play in helping people around the world recover from the pandemic and rebuild the underlying systems that left so many so vulnerable to begin with,” French Gates said in a statement. “The foundation has spent more than two decades forging relationships with a broad range of partners with the vision and expertise to accelerate the pace of progress for everyone. This additional spending will support our partners’ important work to promote a fair and inclusive recovery and a healthier, more equal future.”
Update, July 13, 2022: This story has been updated with additional details on the Gates Foundation and its endowment, as well as comments from CEO Mark Suzman.