.
Gates Foundation gave WHO $300 million in 2013. “Few policy initiatives or normative standards set by the WHO are announced before they have been casually, unofficially vetted by Gates Foundation staff.”
11/10/2015, “The Philanthropy Hustle,” Jacobin, Linsey McGoey
“Most innovatively of all, he [Mastercard’s Banga] has narrowed his gaze on the world’s 2.5 billion “unbanked” inhabitants. As a feature in Fortune describes,
Banga realizes that “much of the opportunity for the company is in
parts of the world where a digital wallet is still decades away.” He’s at the forefront of a growing group of business leaders who appreciate that there are profits to be made in global poverty
What Fortune doesn’t add is where the money for Banga’s investments in the “unbanked” masses is coming from.
A good deal of it is, in fact, not coming from the company he leads.
It’s not coming from Mastercard shareholders, and it’s certainly not
coming out of his ever-expanding pay packet. It’s coming from the coffers of the world’s most powerful philanthropic organization: the Bill and Melinda Gates Foundation.
In 2014, the Gates Foundation announced an $11 million grant to Mastercard to establish a financial inclusion “lab” in Nairobi, Kenya.
The grant will last three years, after which Mastercard has indicated
that, should the venture prove sufficiently lucrative, the company may
be willing to foot the bill for further financial expansion in the
region.
Mastercard’s management rationalized the grant in economic terms:
investing in developing nations such as Kenya is risky, and there’s no
guarantee that investments will pay off. As Mastercard explains in a press release, the money from the Gates Foundation enables the company to reach “new markets that may otherwise be commercially unviable.”
The gift to Mastercard — and it is a gift, rather than a loan or an equity investment — is the latest in a long list of donations that the Gates Foundation has offered to the world’s wealthiest corporations.
From Vodafone, a British company notorious for paying zero corporate
tax in the United Kingdom, to leading education companies such as
Scholastic Inc., the Gates Foundation doesn’t simply partner with for-profit companies: it subsidizes their bottom-line.
The Business of Altruism
Increased charitable giving to the world’s wealthiest corporations is simply one novel aspect of a much bigger phenomenon: the growing power and clout of private philanthropic actors over global institutions such as the World Health Organization.
With an endowment of $42 billion, the Gates Foundation spends about $3 billion each year towards causes that, at first glance, seem irreproachable. But the giving has hidden costs.
Take donations towards the World Health Organization. In 2013, the Gates Foundation gave over $300 million to the UN health agency
— the largest contribution from any donor that year, including the US
government. What the Gates Foundation spends on global development
yearly is almost as much as the overall operating budget of the WHO, and that doesn’t include its other philanthropic programs.
The foundation expects something in return for its efforts. As Laurie Garrett suggested in a 2012 Foreign Affairs article, “few policy initiatives or normative standards set by the WHO are announced before they have been casually, unofficially vetted by Gates Foundation staff.” Some
people argue this is a positive development. The Gates Foundation is
praised often for its results-oriented philanthropic approach. Peter
Singer, the controversial Australian philosopher who helped launch the “effective altruism” movement, has praised Gates and Warren Buffett for being the “most effective altruists” in history.
The problem is that there’s little evidence to back this remarkable assertion.On
the one hand, there’s no doubt that the Gates Foundation has done some
good in the field of global health. But at the same time, it’s clear
that, whatever the opinions of Singer and others, the foundation is not spending its money on the largest global health killers.
Until recently, Gates was not even a proponent of a decades-long goal — championed since the WHO’s 1978 Alma-Alta Declaration — to strengthen primary health care systems and achieve universal health coverage. Far from being uniquely “effective,” grants made by the Gates Foundation “do not reflect the burden of disease endured by those in deepest poverty,” as the editors of the Lancet, the world’s leading medical journal, pointed out in 2009.
The Gates Foundation has also aggressively called for US-based multinationals such as Monsanto to gain a stronger foothold in African nations, a move that worries observers like Daryll Ray, an agriculture expert based at the University of Tennessee, who fear the economic consequences of the foundation’s interventions for small farmers:
“[We need] to take farmers exactly where they are at the moment, and help them be more productive using their knowledge, and technology that would be appropriate to add to it, and then gradually move them into a higher rate of production, rather than talking about them buying Monsanto products, or other kinds of products that they can’t afford and have to buy every year, as in the case of hybrid seed.”
Criticism has also come from unexpected corners: Howard Buffett, the eldest son of Berkshire Hathaway CEO Warren Buffett, suggested on 60 Minutes in 2011 that the Gates Foundation’s bullish optimism about hybrid seeds is blind to the circumstances of developing nations: “We need to quit thinking about trying to do it like we do it in America.”
In a 2011 book chapter, Oxford health economist David Stuckler and his colleagues argue that “global health is ruled by a few private donors who make decisions in secret. The capacity to decide what is relevant and how it will be addressed is in the hands of very few, who ultimately are accountable to their own interests.”
Alms for the Wealthy…
Corporate philanthropy today is about private, tax-exempt donors such as the Gates Foundation giving their charity to corporations.
The Gates Foundation is not the only philanthropic foundation offering donations to for-profits such as Mastercard. Other institutions such as the Ford Foundation have also given direct donations to for-profit firms, especially media companies, while the Wellcome Trust, Britain’s largest philanthropic organization, often makes grants to pharmaceutical companies.
But the pace and scale at which the Gates Foundation has ramped up its donations to corporations has increased at such a speed
that some of the most thoughtful experts on philanthropy aren’t even
aware of the practice. To understand the novelty of the Gates
Foundation’s grants to companies such as Mastercard, it’s useful to know what the grants are not.
These are not endowment investments. Over the years, the
Gates Foundation has faced a steady chorus of complaints for its
penchant for investing its endowment in the same companies that
perpetuate the environmental and health problems
that its gift-giving aims to ameliorate. This practice is different,
however. The Mastercard donation is also not an equity investment,
either. They are donations that help to reduce corporate overhead, allowing some of the world’s wealthiest companies to offset the cost of expanding in new markets. Companies are not obligated to repay the grants, regardless of how profitable the gifts end up being.
The Gates Foundation’s donations are just that: donations. For the corporations, they’re a freebie. For US taxpayers, they are a drain on public money.”…
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