The Bill Gates and Big Philanthropy Problems—and Ours

We do know, don’t we?, that money can, in fact, solve a lot of problems—maybe not all of them, and it can create or exacerbate some, but it can certainly be of help in trying to meet challenges, on either personal or societal levels. Most of us would take it.

Very-moneyed Bill Gates himself is also a problem, as is his philanthropy—institutionally, in the form of the Bill and Melinda Gates Foundation and as practiced by it and its many related entities—according to Tim Schwab’s The Bill Gates Problem: Reckoning with the Myth of the Good Billionaire. Gates personally and the Gates Foundation, which in January announced a 2024 spending budget of $8.6 billion, are representative icons of that which could and should be considered “Big Philanthropy.” It’s a problem—perhaps a challenge and/or opportunity, as well, but a problem. It’s ours, defined in more than one way. And we don’t need to take it.

Schwab is an investigative journalist whose work has appeared in The Nation and the Columbia Journalism Review, among other publications. His worldview is left of center, and his problem with Gates and the Gates Foundation is, at core, borne of his discomfort with their anti-democratic attitudes, tendencies, and behavior—in their arrogance and their giving—all of which is in tension with, if not outright contrary to, an actual or purely charitable impulse. The philanthropic problem described by Schwab in The Bill Gates Problem is first and foremost all of ours, in his view, as American citizens who may want at least something of a plain old democratic say in things.

“We must recognize at all times that billionaire philanthropists are not neutral charity workers or unimpeachable humanitarians, but, in fact, powerful political actors who seek to use their wealth to advance their own interests and reputations, often in ways that harm society and democracy,” according to Schwab, specifically citing Gates, Charles Koch, and Michael Bloomberg as examples. None of us needs to take it.

For conservatives who plausibly see big, establishment philanthropy as financially creating, sustaining, and enhancing a centralized system of elite, well-credentialed and -connected experts that overbearingly and coercively applies top-down, scientifically “proven,” data-driven, progressive solutions to social problems—one to which we never consented—Schwab’s Gates problem and the larger, Big Philanthropy one it exemplifies are ours in particular, too.

None of us needs to take it.

Made to Understand

The Bill Gates Problem convincingly and comprehensively makes a case that Gates is neither who you think he is, nor is he who he wants you to think he is, nor is he who he says to others and thinks he is to himself. “Bill Gates is not simply donating money to fight disease and improve education and agriculture. He’s using his vast wealth to acquire political influence, to remake the world according to his own narrow worldview,” Schwab writes. “[W]e’ve been made to understand that Bill Gates is a philanthropist when he is, in fact, a power broker. And we’ve been made to see the Gates Foundation as a charity when it is, in fact, a political organization—a tool Bill Gates uses to put his hands on the levers of public policy.”

Saying to others something about yourself that’s not true just means hypocrisy, of course; thinking to yourself something that’s not true is worse: it’s a self-lie—maybe the worst kind, giving rise to societally detrimental artifices in this case, but harmful to its individual or institutional propagator in almost all cases.

In Schwab’s journalistically damning indictment of a book, for instance, he describes the Gates Foundation as—again, contrary to that which you might think and what it says about and tells itself—in large part, really more of a Microsoft-like, monopolistic pharmaceutical company than anything else, including being the tax-exempt, charitable grantmaker that it’s supposed to be. This may be the indictment’s “Count One.” It is an eye-opening education.

“One reason Bill Gates has made health and medicine the central focus of his philanthropy is that this body of work allows him to draw so heavily on his experience at Microsoft,” as Schwab tells it. “As he explained in a 2019 interview, 40 percent of the foundation’s annual budget goes to research and development to bring new pharmaceuticals to market.” In this market, the foundation is essentially (and again) overbearingly, and sometimes underhandedly, competing with others that do not enjoy is tax advantages as a charity, moreover. A problem.

The foundation has put $500 million into its own nonprofit pharmaceutical enterprise, the Gates Medical Research Institute, according to Schwab, and it makes hundreds of millions of dollars in charitable gifts directly to for-profit pharmaceutical companies “in which the foundation’s endowment reported holding stocks and bonds, like Merck, Pfizer, and Novartis. This means the foundation is sometimes positioned to benefit financially from its charitable partnerships.”

Through its grant contracts and ownership stakes in pharmaceutical companies big and small, the elite foundation aggressively, and coercively, acquires useful knowledge about the intellectual property underlying all of the pharmaceutical products whose development it finances. In the education of policymakers and the public, it steadfastly defends the patent-system structure in which intellectual-property rights are exercised and monetized by it and Big Pharma, if those are even separate. It protects and defends specific patents in always implicitly threatened or occasionally actual lawsuits, as well.

In fact, Gates—whom Schwab does concede is “well-meaning, but imperfect”—often touts its close relationship with big pharmaceutical companies as societally beneficial. Big Pharma and Big Philanthropy in the form of Gates get along quite well with each other, mostly because Big Pharma can’t really ignore Gates; it’s so big and has a lot of acquired/purchased knowledge that it can and does powerfully, self-interestedly, and self-confidently broker.

There’s a plausible “worry that the Gates Foundation is preventing better, cheaper products from reaching the marketplace and that lifesaving drugs, diagnostics, and vaccines may be held up by the foundation’s meddling, micromanaging, and malign influence,” Schwab notes. “The foundation believes that its” well-credentialed,

in-house expertise and its ability to scrutinize … many competing technologies give it the unique ability to know what products will work and what won’t. And it believes that its charitable mission justifies its extreme interventions in the marketplace because these efforts will bring new lifesaving pharmaceuticals to the global poor.

But “across most of the diseases the Gates Foundation works on, its track record of innovation is quite weak,” Schwab writes. A problem indeed—perhaps also including in the context of its high-profile work on Covid-19, which he covers in an ending chapter of the book.

One reason the World Health Organization (WHO) “didn’t have the expertise or capacity to manage the pandemic is that its authority had been eroded by the rise of the Gates Foundation,” according to Schwab. “As the initial weeks of the pandemic became months, Bill Gates reached the absolute zenith of his philanthropic career.”

The foundation “had created financial relationships with a wide variety of Covid-19 vaccine companies, through either direct charitable donation or by overseeing large donations from” the Coalition for Epidemic Preparedness Innovations that the well-connected, WHO-supplanting foundation helped create and substantially supports. Gates “had placed its biggest bets on AstraZeneca, Novavax, and Serum. One important takeaway from the limited success of these efforts concerns Gates’s claimed authority in pharmaceutical development—and whether Gates’s far-reaching influence over private markets can be rationalized through the foundation’s supposedly unique expertise.”

Unsurprisingly, Schwab does not see this top-down rationale working in practical application as well as Gates and his foundation say and would have us think it did, or as they say and think to themselves that it did, either. Most important, the global poor—which they claim to prioritize—remained unvaccinated long after those in wealthy nations got their doses, as supply could not meet demand, or at least not quickly enough in the emergency. Schwab quotes Gates as defensively writing that the Big Pharma patents he so stoutly defends were not the cause of this problem, but rather that “there aren’t enough factories capable of handling the more complicated process of making vaccines.” As if Gates couldn’t have easily financed their construction and staffing, were its omniscient staff wise enough to have foreseen the need for them.

A Blisteringly Disheartening Education

Schwab has many more “counts.” Because of the same or similar personal, institutional, and sectoral characteristics, or flaws, Gates and his foundation are neither who you think they are, nor who they want you to think they are, nor who they say to others and think they are to themselves in many additional contexts, as well: dealing with the poor, with blacks, and with women, for example, and regarding eugenics(/family planning) or agriculture or education. The foundation is not so efficient or transparent in its operations either, moreover, both of which it purports to be. There are hundreds of pages of details about the Gates’ and the foundation’s, including their self-, deception. As what would be “exhibits” of the indictment, they are a blisteringly disheartening education.

After overviewing some of Gates much-ballyhooed anti-poverty work in Africa, Schwab quotes David McCoy of the United Nations University in Malaysia as telling him, “They really epitomize a form of charity which is disempowering to the people they claim to benefit.” Contra to being a true philanthropist, “Gates might better be described as a misanthrope—if he does not hate his fellow man, then he certainly views himself as superior,” Schwab writes. “Gates’s dead-eyed belief in himself and his powers, and his wholesale disregard for the wishes, needs, or rights of the poor people he claims to be serving, speaks to the fundamentally colonial lens through which he views his charitable giving.” Another problem.

Conservatives, as humans, and conservative philanthropy, as human institutions, are susceptible to the same and related sets of problems, of course. Arrogance, self-importance, and hypocrisy are universal temptations and traits. Note to selves: avoid them. If however clumsily, numerically measured in mere donated dollars, the damages these traits cause do not—they cannot, really—occur on the same scale as when exhibited by Gates and his foundation.

Schwab contrasts Gates’ evolvingly and contradictorily described personal connections to Jeffrey Epstein and allegations about the ways in which he has treated particular women with Gates’, his ex-wife Melinda French Gates’, and their foundations’ publicly professed commitment to empowering women. More largely, “[e]ven if we accept Gates’s hard-to-believe explanation of his relationship with Epstein—that it was organized entirely around charity—this still leaves us to contend with a deeply troubling question,” according to Schwab. The question: “If Gates was willing to partner with a monster like Epstein to raise money for global health, what else is he willing to do to advance his agenda?” The Gates-Epstein saga, Schwab observes, also raises questions about the foundation’s “apparent inability to address the questionable behavior of its founder.” A dilemma.

Conservatives and conservative foundations are vulnerable to the same and related dilemmas. Picking the wrong friends or associates, much less behaving questionably, can happen to all of us. Another note to selves. Whether the degree to which Gates exploited his and his foundation’s much-larger wealth to facilitate or allow those vulnerabilities made it easier for them get the best of him may or may not be morally relevant, but as a practical matter, it does seem fair to wonder.

Eugenics, as one of my mentors and fellow Giving Review co-editors William A. Schambra labeled it, is progressive establishment philanthropy’s “original sin.” The Gates Foundation’s family-planning work echoes that shameful history. Schwab quotes Melinda French Gates as saying in 2010 that she and Bill had an “a-ha” moment during an anti-poverty tour in India. “[I]f you get into this work and you start to save these children,” she says, “will women just keep overpopulating the world?” In this “obsession with population growth” on the part of both Gates, “we get a glimpse into the troubled origins of the family planning movement,” Schwab writes, which has historically been “a tool of wealthy governments and philanthropists to limit the ability of poor people and people of color to reproduce.”

In its population-control work, which Schwab outlines, Gates’ “philanthropic interventions, in practice, appear far more concerned with meeting numerical targets and managing corporate partnerships than supporting the rights of poor women to make their own decisions about their bodies.” In the work’s way of deploying Gates money to alter the behavior of women—who are practically presented with a narrow set, in many cases a “set” of one, of Gates-financed “options”—Schwab sees “the bigger theme of coercion in all of the Gates Foundation funding.” A predicament.

Given the power imbalances inherent in all grantmaking, just as in the case of the progressivism that defines contemporary establishment philanthropy, there can be and is conservative philanthropic coercion, too. Note. Here too, though, if measured merely in money, its negative ramifications don’t—can’t—occur on the same scale.

In K-12 education reform, as well, Schwab finds failure in Gates’ effort to develop, promote, and implement the Common Core state educational standards, a nationwide effort to build smaller schools, and projects to push new teacher evaluations and charter schools. In all this work, according to Schwab, “we see that the foundation operates in very much the same way at home as it does abroad in poor nations—orchestrating controversial, undemocratic, top-down policy changes by working behind the scenes.” A quandary.

For conservative givers, again here too: as bad—but the negative effects of which are necessarily smaller in scale—as almost all of the other quandaries for progressivism and Gates.

The Mirror

While the bases for many of the other “counts” in Schwab’s journalistic indictment against the progressive Gates and his foundation in The Bill Gates Problem may also have what could be considered “mirror equivalents” among conservative grantmakers, they’re really not necessarily mirrors of, but are basically the very same pitfalls. The Gates Foundation sophisticatedly takes full advantage of the latitude within the nonprofit sector’s very legal structure—or, really, of unchecked broad interpretations of legal and regulatory definitions in that structure’s unenforced strictures. This sophistication is employed in the contexts of avoiding transparency, engaging in politics and lobbying, and evading taxation.

The humongous Gates Foundation does these things, it says to us all and says and thinks to itself, to legally (or, okay, not-illegally) effect its agenda. It thinks it’s right, and smart. We should too, it thinks. If and when the large—but decidedly less large; in fact, compared to Gates, small—conservative givers legally(/not-illegally) do them, it’s to achieve admirable aims, too, they say and think to everyone and themselves. Often, a stated aim is to “fight,” “take on,” or counter the progressive project of Gates and his, and its, allies.

In the context of transparency, “there is nothing secret about our objectives as a foundation. We are committed to being open about what we fund and what the results have been,” Schwab quotes Melinda French Gates as having written in 2018. “It’s an odd rationalization,” Schwab then rebuts, “one that seems to argue that the foundation’s professed transparency justifies its deeply unfair exercise of power. And it’s based on a wholly false premise—that the foundation is open.”

First, foundation employees have to sign agreements, upon both hiring by and separation from it, to not speak about the foundation. Recipients of grants from the foundation also have to sign agreements to not discuss it. “Nondisclosure, nondisparagement, and confidentiality agreements appear to be a deeply institutionalized part of Bill and Melinda Gates’s personal and professional lives,” according to Schwab.

Then, and perhaps more sector-structurally important, an “additional difficulty in following the money concerns the use of ‘sub-grants,’” he writes. “The foundation publicly reports the primary recipient of its money,” as it’s required to do as a tax-exempt private foundation, “but these recipients then parcel the money out to other groups,” the names of which are not reported. These recipients include the New Venture Fund (NVF), which is run by the Arabella Advisors consulting firm, in Washington, D.C.

InfluenceWatch describes NVF as “specializ[ing] in passing grants from its donors to left-of-center political causes and activist groups as well as sponsoring new ‘pop-up’ groups[]or websites dedicated to pushing left-of-center policy while disguised as independent activist nonprofits.” By Schwab’s telling, Arabella’s NVF can be seen “as acting as a kind of middleman, or funnel, for wealthy donors. Instead of the Gates Foundation giving money directly to an organization, it gives money to the New Venture Fund, which then administers and funds other groups—at times making it impossible to follow the money.” Gates’ “$490 million in donations to the fund make it one of the single largest recipients of the foundation’s giving. How this is used, however, is often unclear and, at times, seemingly unknowable,” he notes.

Gates also gives billions of dollars to other private foundations”—like the Hewlett Foundation, the United Nations Foundation, and the Bill, Hillary and Chelsea Clinton Foundation—which then distribute the money to other groups,” Schwab reports. In addition to “sub-grants” and the use of “fiscal sponsors,” the known effects of which are to conceal ultimate actual individual grant recipients, there are also contracts and professional fees that are not individually reported. There is a high level of (high-priced) sophistication all around.

“The endless layers of obfuscation create a never-ending, Russian-nesting-doll effect in which the Gates Foundation appears able to fund, create, and direct new independent-seeming organizations through opaque clearinghouses like New Venture Fund, but to minimize the public appearance of its involvement,” according to Schwab. “This allows it to build political power through creating a network of allies and the appearance of diverse and robust support for its agenda, an echo chamber of Gates-funded organizations.

“Equally troubling, if the foundation did open its books, it would only reveal another labyrinth of puzzles,” Schwab writes elsewhere in the book. There is “an endless array of ‘controlled entities’ and independent organizations and financial instruments: grants, contracts, loans, endowment investments, program-related investments, purchase guarantees, and on and on. … The size and complexity of the foundation and Bill Gates’s broader empire is very much a part of the lack of transparency.” Purposeful sophistication, certainly; opaque (on purpose and?) in effect. All letter of the law, albeit labyrinthian.

In politics directly, “Bill and Melinda French Gates have put well over ten million dollars of their personal wealth into campaign contributions and political contests, including supporting a wide range of candidates” of both parties.

Gates’s financial contributions can also be seen in its charitable giving to politically connected organizations, including the nearly $10 billion the Gates Foundation has donated to organizations based in the nation’s capital—three thousand charitable grants, including donations to a never-ending stream of advocates who help put Gates’s agenda in front of Congress and other political tastemakers. If we expand the geography slightly to the Beltway suburbs that comprise the DC metro area, Gates’s giving crests to $12 billion. That’s more than twice as much money as the foundation gives to the whole of Africa, a clear signal of where is real priorities lie.

Relatedly—in purportedly accountability-bearing, and increasingly nonprofit, journalism—“[b]y funding news outlets and also the expert sources these outlets cite in ways that that are often not transparent to news consumers,” according to Schwab, who provides several examples, “the foundation has an extraordinary ability to shape the public discourse, to change the very intellectual firmament around what we know about it and how we think about the topics it works on.” Instead of journalists playing their proper role of holding power to account, he laments, “they have been unwilling or unable to understand that the Gates Foundation is a structure of power, a political organization whose billions of dollars in charitable giving present exactly the kinds of conflicts of interest and money-in-politics problems that journalists are built to interrogate.”

The larger statutory and regulatory structure of nonprofitdom in which Gates operates allows for its anti-democratic activities, Schwab thinks. An oft-used defense against this “count:” all of us, though, including conservatives, could do the same, of course, and at the same scale. Technically correct. Usually elided in this defense is a potentially relevant practicality …: if only we had the same wealth.

Protect, Preserve, and Promote

As part of that structure, all of us, including conservatives, mandatorily contribute through tax payments to the pool of funds used to incentivize the tax-exempt “charitable” activities in which both Gates, though disproportionately highly, and its smaller conservative counterparts are engaged. In much of its philanthropy, Gates helps protect, preserve, and promote that structure.

“The super-wealthy can reap tax benefits of up to 74 percent through philanthropy—from avoiding income tax, capital gains tax, and estate tax they would otherwise pay,” according to Schwab, citing work done Boston College law professor Ray Madoff and Catholic University law professor Roger Colinvaux. “In essence, every dollar a multibillionaire donates can generate up to seventy-four cents in personal benefits in the form of tax saving,” Schwab continues. Very bothersomely to Big Philanthropy’s defenders, “[t]ax scholars widely describe this relationship as a tax subsidy: we, the taxpayers are richly subsidizing the Gates Foundation.” Schwab writes that he thinks a “fairer, if conservative, assessment of the tax benefits that … the Gates personally receive is something on the order of 50 percent,” and that it should also include the low, 1.39% rate of excise taxes on its endowment income. “Some years, the Gates Foundation actually generates more money from its investment activities than it gives away in charity.”

Given this tax-subsidization—a characterization Schwab prefers over “-incentivization” (which might also be overincentivization)—he asks, “Insofar as philanthropy in the hands of someone like Bill Gates is clearly a tool of political influence, shaping all manner of public policy, why don’t we scrutinize and regulate the Gates Foundation as a political organization just as we scrutinize and regulate lobbying or campaign contributions?”

Schwab writes that “across the political spectrum, writers, thinkers, and scholars widely cite a pressing need to rethink the current carte blanche that Big Philanthropy enjoys,” citing libertarian Stephen Moore, among others. Moore “has proposed that wealthy donors like Bill Gates should have to pay capital gains tax on money they donate” and that “Congress limit charitable deductions to $250,000 per household per year.”

Anticipating other oft-employed defenses of Big Philanthropy, Schwab reminds the reader “that philanthropy, as a tax-privileged entity, is not some immutable feature of the law. Congress had to create a pathway for the ultrarich to turn their personal fortunes into political power via tax-exempt philanthropy. And Congress can also dissolve this benefit.” Here Schwab actually echoes, from yet another point on the ideological spectrum, populist J. D. Vance. In proposing that “we should eliminate all special privileges that exist for our nonprofit and foundation class” to a Claremont Institute audience in 2021, before he began his successful campaign to become a U.S. Senator, Vance said, “The decision to give those foundations and those organizations special privileges is a decision made by public policy. It was made by man, and we can undo it.”

To prevent, or maybe just delay, any such Schwab-suggested dissolution or Vance-urged undoing, or seemingly even any discussion, or contemplation of such—there is “a growing number of efforts that wealthy philanthropists deploy to advance their goal of protecting, conserving, and enhancing the privileges of the billionaire class by reminding us just how good they really are,” Schwab writes in a November 2023 Baffler article. “The Gates Foundation has empowered an army of advocates to amplify this message, giving more than $500 million in charitable donations to groups that help advance the philanthropic sector’s interests, publicize its good deeds and big donations, and set the acceptable boundaries of debate.

“Gates and his fellow billionaires,” Schwab’s Baffler piece observes,

have carte blanche to use charity as a money-in-politics tool, like lobbying and campaign contributions, but with virtually no oversight. In this perversely unregulated system, the richest people on earth pay the least in taxes and are celebrated as saints, even as their donations are directed to projects that advance their own political interests, including enlarging the special-interest political power of the new philanthropist class. It’s an extraordinary entitlement and Big Philanthropy knows it needs to vouchsafe both hearts and minds to lacquer its claim on these privileges, lest Congress get any big ideas, or, even before that, the public puts ideas in the head of its elected representatives.

Us

Money, including when it comes in the form of big donations, can solve a lot of problems, yes. Most of us would take it, along with the problems. The deceptive, and self-deceptive, Bill Gates and Big Philanthropy also present problems, to all of us, as Schwab well tells in The Bill Gates Problem.

To the degree that efforts to conserve and enhance monoculturally progressive Big Philanthropy’s policy-provided prerogatives include conservatives who would normally stand and act against—and even more, would proudly and loudly say to all and believe themselves that they aggressively and effectively “fight,” “take on,” or somehow counter—it, conservatives in particular may have something of their own Bill Gates problem, too. We may not be who we say and think we are, either.

Need we take that?

This article first appeared in the Giving Review on March 18, 2024.