What does Bill and Melinda Gates' divorce mean for their philanthropy?

The surprise announcement that Bill and Melinda Gates would be ending their 27-year marriage raises questions about the future of their individual and joint philanthropic efforts. There are no planned changes to their roles or the organization, according to a statement released by the Bill & Melinda Gates Foundation, which is the world’s largest private foundation and has major influence in global health and international development. But much of the couple’s fortune has not been donated to the foundation. Bill’s estimated net worth is around $130 billion, and he and Melinda may choose to use other mechanisms to direct grants and investments to the causes they care about. What could the split mean for the Gates Foundation? Headquartered in Seattle, the Bill & Melinda Gates Foundation has an endowment of $50 billion and 1,600 staff members around the world. Much of the foundation’s endowment comes from Warren Buffett, the billionaire CEO of Berkshire Hathaway Inc., who doubled the foundation’s resources when he directed the bulk of his stock holdings toward supporting its work. Few details were given about what the divorce meant for the running of the foundation, but many observers noted on Twitter how this private matter has massive public implications. “Bill and Melinda will remain co-chairs and trustees of the Bill & Melinda Gates Foundation. No changes to their roles or the organization are planned. They will continue to work together to shape and approve foundation strategies, advocate for the foundation’s issues, and set the organization’s overall direction,” the foundation statement said. The Gates Foundation is a nonprofit charitable trust, so the money Bill and Melinda have already put into the charity can’t be taken out for personal use, said Megan Tompkins-Stange, an assistant professor at the University of Michigan’s Gerald R. Ford School of Public Policy and philanthropy expert. “If you’re being pulled in two different directions, then what does the foundation do?” --— Michael Anderson, former CEO, Children's Investment Fund Foundation “Likewise, while they are benefactors and board members of the foundation, they can’t simply cease funding the initiatives and organizations they’ve given grants to,” she said in a Twitter thread. “Grants are legal contracts between grantees and the foundation as a corporation, not with the Gates as a couple. The divorce will have no impact on these grants.” The foundation was set up with a sunset clause, meaning all assets must be spent down within 20 years of the deaths of Bill and Melinda, Tompkins-Stange said. The only way the divorce might impact the foundation is if either Bill or Melinda decided to step away as a board member, which would likely change its direction — something the foundation stated is not happening, she said. In an email to foundation staffers Monday, CEO Mark Suzman said Bill and Melinda Gates had assured him of their commitment to the organization. “Today’s announcement is obviously deeply personal to Bill and Melinda, and we will not be commenting further,” he said in the email, obtained by Devex. “While there will be short-term adjustments to their schedules, they will be continuing to participate in key internal and external meetings.” Suzman noted that Bill and Melinda Gates would be addressing the staff directly in their upcoming annual employee meeting. ‘Equal partners’ go their separate ways In her 2019 book, “The Moment of Lift,” Melinda French Gates — who recently added her maiden name to social media accounts — expanded on the challenges of forming an equal partnership with Bill at the helm of the Gates Foundation. “He’s had to learn how to be an equal, and I’ve had to learn how to step up and be an equal,” she wrote. For years, the couple have co-authored an annual letter about the work of the foundation, but that was only after Melinda fought for the change, since Bill did not see why he shouldn't continue to sign the letters on his own. Melinda has since said that she and Bill “are equal partners” at the foundation. In fact, no major changes in strategy happen without joint signoff by the co-chairs, insiders tell Devex. And the implications extend beyond the couple’s own grant making and investments. The nature of the divorce, and the relationship between Bill and Melinda, could shape the decision-making of the foundation moving forward, as well as their efforts to mobilize other billionaire donors to sign The Giving Pledge, which the Gateses launched with Buffett. It could also impact their work in policy and advocacy on issues including global health and increased official development assistance. Global health has emerged as the major priority of the Gates Foundation, which directs most of its funding toward infectious diseases, especially those that affect the poor, and more recently has committed $1.75 billion to COVID-19 response. Bill and Melinda have different priorities and theories of change, but they also work together in ways that are synergistic, said Michael Anderson, former CEO at the Children's Investment Fund Foundation, or CIFF. “I have to say, when I heard the news, my heart went immediately to Mark Suzman, thinking of what he’s going through to manage all this. It’s challenging,” said Anderson. Anderson led CIFF through drawn-out divorce litigation between hedge fund billionaire Chris Hohn and then-wife Jamie Cooper, who had set up CIFF jointly. Last year, CIFF was ordered to pay £270 million to Big Win Philanthropy, which Cooper set up following their divorce. The divorce follows a trend of Bill and Melinda diverging in their interests and approaches, Anderson said. “If you’re being pulled in two different directions, then what does the foundation do?” he said. “To some extent, that happens already.” Beyond the foundation, the couple has other vehicles for giving This divorce will be the largest division of assets since Amazon founder and CEO Jeff Bezos and split with MacKenzie Scott in mid-2019. Bill and Melinda Gates have never signed a prenuptial agreement, but they do have a separation contract, according to court documents. Divorce filings reveal that Bill and Melinda Gates have agreed to a division of assets. A key question is whether the money they choose to direct to philanthropy will go into the foundation or their other vehicles for giving. Well before the divorce, Bill and Melinda each set up separate organizations to make grants and investments. In 2015, Melinda Gates set up Pivotal Ventures, an independent executive office that would allow her to pursue issues that might not fit within the structure of the foundation. Over time, women’s economic empowerment — a focus of hers — has become a larger priority of the Gates Foundation as well. Bill Gates has launched a number of efforts to pursue his interests, much of them run through his private office, Gates Ventures. For example, in 2015, he and a coalition of private investors launched Breakthrough Energy Ventures to support innovations for net-zero emissions. He’s also made investments in companies focused on a range of issues including plant-based and synthetic meat, both personally and through Breakthrough Energy Ventures. Global Good, a fund that was formerly housed within the patent-holding and technology company Intellectual Ventures to support inventions for low-resource settings, was created with funding from the Bill & Melinda Gates Asset Trust, which also funds the foundation. Its projects recently spun out into the foundation and Gates Ventures. Some observers wonder if Melinda Gates might take a similar path to Scott, who has given away billions of dollars in direct grants since her divorce. Melinda Gates could set up a new foundation, make direct gifts to causes she supports, or partner with other philanthropists, as she did last year when she teamed up with Scott to back the Equality Can’t Wait Challenge — an initiative supporting ideas to improve gender equality that is administered by Lever for Change, a nonprofit affiliate of the John D. and Catherine T. MacArthur Foundation. The divorce highlights some of the challenges that can arise among billionaires who make a pledge to give the majority of their wealth away in their lifetimes, like the other signatories of The Giving Pledge. “They both have really good senses of the boundary between the personal and the professional, so that bodes well,” Anderson said. “But divorces are always hard, and they don’t always bring out the best in people, so even people who have the very best will may struggle to always make the right choices in those circumstances.”