Off the Sidelines: Is Bill Gates Gearing Up To Give Away More of His Vast Private Fortune?

Bill Gates has $78 billion sitting in private investments. That fortune is almost twice as large as the assets of the Bill & Melinda Gates Foundation, and this money is sitting on the sidelines even as Gates urges greater giving by other billionaires around the world and talks about the clear-cut ways in which more philanthropic spending now can save lives. 

Recently, though, for the first time in years, Gates made a sizeable donation to the foundation—transferring $1.5 billion in Microsoft stock in November to bolster an endowment that was last reported to stand at $42.3 billion. This is the biggest gift Gates has made since 2004, when he gave $3.3 billion to the foundation. Since then, Gates has only given $770 million in gifts—during a period when Warren Buffett has given far greater sums to the foundation.

So what accounts for the new Gates donation? 

Well, naturally I'd like to think that Bill read my article back in May "Why Isn't Bill Gates Giving Away More Money, Faster?" and then did some thinking. Or maybe he thought I raised a good point with my article in July, "Four Reasons Why Warren Should Stop Giving Bill His Money," in which I argued that Buffett shouldn't be fueling the Gates Foundation while Bill and Melinda's wealth was sitting on the sidelines. Or perhaps he didn't want see the kind of tougher article I wrote last month, "Bill and Melinda Gates Have a Big Vision. So Why Aren't They Writing Bigger Checks?" in which I contrasted the sense of urgency laid out in the Gates annual letter with all the money the Gateses aren't spending to make the world a better place.

That third article was written before the new $1.5 billion Gates gift became public, but it made the (obvious) point that Bill and Melinda will inevitably start to expand their giving in coming years, since nearly their entire fortune is eventually destined for philanthropy. The only question is when the spigot is really going to turn on.

As for that timing, I can't imagine Bill and Melinda Gates care a whit about what I or any other outside observer has to say about their level of giving. Instead, the main person they surely listen to is Michael Larson, the man who manages the Gates fortune, the majority of which is in venture investments that may take years to mature.

The Gateses may believe, and perhaps rightly so, that they'll have a greater impact over the long-term if they grow their fortune substantially before harnessing it to philanthropy. Think of the question this way: Would it be better to start spending down that $78 billion starting today—or wait for key investments to mature and then, say a decade from now, have $150 billion to spend? Or even more?

Put this way, you can see the argument for waiting, especially if the Gateses believe they need more time to figure out exactly how to deploy so much additional wealth in the most effective way. 

Of course, the other scenario is to somewhat ramp up their giving now, while leaving the bulk of their investments untouched. Significantly, the recent $1.5 billion gift took the form of Microsoft stock and didn't require liquidating any venture holdings. 

In closing, let me come back to a point I've made before: While the Gateses are smart people and surely have a wise game plan to maximize the impact of their wealth, it would be helpful for them to be more public about that plan.

Otherwise, we're left to ponder the seeming contradiction between the couple's self-imposed limits on their own giving even as they make urgent calls for action to improve humanity and push for greater philanthropy by other rich people. 

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