So the financial market meltdown is hurting even the Gates Foundation. In an announcement on November 21st, Jeff Raikes, the Foundation’s CFO, said that it would not be increasing giving in 2009 by as much as it had planned. The good news is that it still plans to give away 10% more in 2009 than in 2008, which is not exactly the end of the world. Indeed, it is possible that the Foundation is grateful for an excuse to expand a little less rapidly, given the constant chatter we hear about the difficulty it has had finding good ways to give away an unprecedented amount of money.
On the other hand, both Bill Gates and Warren Buffett now have significantly smaller fortunes than they did even a few months ago, which may eventually require the Foundation to scale back its long-term ambitions.
Another cause for concern is that, whilst the Foundation has diversified out of its exposure to Microsoft’s share price, all its gifts from Buffett are due to come in the form of annual blocks of shares in his company, Berkshire Hathaway. After Buffett’s recent statement that shares look cheap has come to be viewed as premature, at best, Berkshire Hathaway’s shares have fallen amid speculation that Buffett’s golden run of success may be over. The sage of Omaha has proved his doubters wrong many times before. Yet Raikes could be forgiven for wishing that Buffett’s promised gift was in a more prudently diversified form.
Meanwhile Raikes said that the Foundation would continue to concentrate on keeping operating costs low, continuing to learn, and focusing on its core issues. In particular, it would become an even more committed advocate, trying to persuade government, businesses and other foundations to continue to do their part. Raikes is surely right to say that “advocacy is especially important in tough times. When government officials write next year’s budgets, it may be tempting to cut back on the very programs our grantees care most about.” Rumour has it that the Foundation now has around 50 lobbyists in Washington. Can even lobbyists be virtuous?