As he often does, news comedian Stephen Colbert has the line that sums it all up somehow: “Warren Buffett is so rich, he’s hired Bill Gates to spend his money".
In case you haven't heard the news yet (that may happen, particularly in Europe in this World-Cup-saturated month), on Monday the second-richest person in the world, the legendary American investor Warren Buffett, announced his intention to give away about 85 percent of his fortune, most of it - shares currently worth some USD 31 billion - to the foundation of the richest person in the world, Bill Gates (another 7 billions will go to other foundations). That will almost double the wealth of the Gates Foundation, and probably double its annual grant-making as well (currently nearly 1.4 billion USD) because foundations, under US law, have to give away at least 5 percent of their assets every year.
After the gift was announced in New York, discussions have mostly focused on the size of the check (the biggest philanthropic donation in history, although the shares will be transferred in installments over the years) and on the difficulties of giving away so much money well (the Gates Foundation is heavily engaged in healthcare - fighting malaria and tuberculosis and finding a vaccine for AIDS - and education). This being contemporary America, the news has also sparked a controversy on fiscal policy (Gates and Buffett are opposed to repealing the estate tax, a Bush pet policy).
What I find more interesting are two other facts. First: Buffett is giving the money to an existing foundation that doesn't even carry his name. This is a significant departure from past practices of using foundations and charitable gifts to erect mausoleums - although benevolent ones - to oneself. Second: the gift hugely extends the already huge reach of the Gates Foundation and creates what can be considered the first global philanthropic superpower (for comparison, consider that the overall budget of the UN, including all programs, agencies and funds, is about 20 billion USD), one that is run like a business (focusing on solving problems and seeking measurable results) and which, starting next year, will benefit from Bill Gates' full attention (he recently announced that he will step down from his operational role at Microsoft).
We may even be witnessing the birth of the first of a breed of new global actors - the apolitical global organization with significant own resources. Imagine other Buffetts and Gateses of the world concentrating their money in a few entities of this kind - entrepreneurial in spirit and efficiency-driven. In an international system structured around governments (resources: taxes), non-governmental organizations (resources: fundraising) and globally integrated corporations (resources: revenues), their exact collocation is not clear yet. This "corporatization" of philanthropy may be a concern to some (resources that otherwise would flow towards the government through taxes in order to be "redistributed" in the classical ways are diverted towards private organizations that assign different redistribution priorities). My impression however is that the financial muscle, rigor, efficiency and scientific soundness of such an organization - maybe working in parallel with the political agency and diplomatic skills of, say, the Clinton Global Initiative - may be the answer to global issues that governments and the UN and the EU and the market have proven unable to give - such as fighting ignored "southern" diseases.
I'm even wondering whether we may soon see the partial or total "outsourcing" of the fight against some diseases and of the research for vaccines (or even of some educational programs) by the global community to the Gates Foundation and other similar institutions that may appear in the near future. I'm not advocating it (also because there are many unanswered questions: for example, these organizations act within the legal framework but are tackling issues of public interest without democratic legitimacy - basically on a "trust me" basis): just wondering what the consequences of that would be. Your thoughts?