IT’S ELECTION SEASON, and teams of journalists are avidly tracking the flow of big money into political campaigns. Sifting financial records and filings, they are laying bare the activities of Super PACs, 501(c)(4)s, and campaign committees. There’s a parallel realm of big-money activity, however, that receives much less attention: philanthropy. With the explosion of the billionaire class, the number of deep-pocketed donors and foundations has mushroomed as well. Many of the new benefactors are Wall Street and Silicon Valley moguls who are seeking to apply to social and economic problems the same zest for innovation and entrepreneurship that they showed in their business ventures.
The creed of these new philanthropists was brashly outlined in June by Sean Parker, the co-founder of Napster and founding president of Facebook, in an article appearing in the Wall Street Journal under the headline, “Philanthropy for Hackers.” Traditional philanthropy, he declared, is “a strange and alien world made up of largely antiquated institutions.” These old-timers have long favored “safe” gifts to well-established institutions, “resulting in a never-ending competition to name buildings at major universities, medical centers, performing arts centers and other such public places.” The new breed, by contrast, has a hacker mindset: It is anti-establishment, believes in “radical transparency,” is given to problem solving, and has an ability to identify weaknesses in long-established systems and to disrupt them. With this “hacker elite” now seeking to upend philanthropy, Parker exhorted them to resist the urge to institutionalize and instead treat philanthropy as “a series of calculated risks” and “big bets.” In a bid to put these principles into practice, Parker launched a foundation bearing his name, with an endowment of $600 million and a commitment to finding new ways to fight allergies, malaria, and cancer.
Interestingly, there are two members of the hacker elite who for 15 years now have practiced this style of philanthropy in a big way: Bill and Melinda Gates. The Bill and Melinda Gates Foundation is by far the largest such institution in the world. Its assets of $41 billion are more than double the combined assets of the “Big Three” foundations — Ford ($12 billion), Rockefeller ($4 billion), and Carnegie ($3 billion). The Gates Foundation has all the traits Parker extols, and its work has served as a sort of grand experiment in the new “venture philanthropy,” as it’s sometimes called.
Gates is the largest philanthropic supporter of primary and secondary education in the United States. Together with the Walton Family Foundation and the Eli and Edythe Broad Foundation, it has helped reshape national education policy. Gates has been no less influential in international public health. Over the last 15 years, it has spent billions of dollars to fight polio, malaria, tuberculosis, HIV/AIDS, and other diseases. Though the World Health Organization spends more than Gates does on health, the foundation, by virtue of its high profile and skillful marketing, has played a key part in setting the global health agenda. On top of it all, the foundation in recent years has invested heavily in agricultural development in Africa, joining with the Rockefeller Foundation to build on the “Green Revolution” that Rockefeller helped launch after World War II. Not since that earlier initiative has a foundation left such a large imprint on the world as the Gates Foundation.
Despite its impact, few book-length assessments of the foundation’s work have appeared. Now Linsey McGoey, a sociologist at the University of Essex, is seeking to fill the gap. “Just how efficient is Gates’s philanthropic spending?” she asks in No Such Thing as a Free Gift. “Are the billions he has spent on U.S. primary and secondary schools improving education outcomes? Are global health grants directed at the largest health killers? Is the Gates Foundation improving access to affordable medicines, or are patent rights taking priority over human rights?”
As the title of her book suggests, McGoey answers all of these questions in the negative. The good the foundation has done, she believes, is far outweighed by the harm. In education, she maintains, most of its initiatives have either gone bust or failed to deliver on their promises. The foundation’s first great education initiative focused on creating small schools in place of big ones, on the assumption that doing so would allow students to receive more individualized attention. From 2000 to 2008, it spent $2 billion to establish 2,602 schools across the United States, affecting a total of nearly 800,000 students. Unfortunately, the experiment failed to improve college acceptance rates to the degree that the Gateses had hoped, and so they abruptly terminated it.
Instead, the foundation channeled its resources into a host of other initiatives — increased data collection on teacher effectiveness, the introduction of performance-based teacher pay, more standardized testing for students. The foundation has invested heavily in charter schools and vigorously backed the Common Core, which sets national reading and math standards. These are all key elements of the so-called school reform movement. Arne Duncan, as head of Chicago’s public schools, worked closely with both the Gates and Broad foundations, and as President Obama’s secretary of education he sought to implement many of their ideas.
McGoey (along with many others) is sharply critical of this movement. She cites studies that show that charter schools have performed no better or worse than traditional public schools, and she notes that the Gates Foundation itself has backed away from its once vocal support for assessing teacher performance on the basis of student test scores. While the willingness of the Gateses to change their minds in the face of evidence is admirable, McGoey writes, the reforms they championed “are now entrenched. For many teachers and students, their recent handwringing over the perils of high-stakes testing has come a little too late.”
In McGoey’s view, the Gateses’ missteps stem mainly from their refusal to see that the real problem in American public education is not failing public schools nor ineffective teachers but poverty. If Gates and other wealthy backers of charter schools were to admit this, she writes, they would have to face the question of why people like themselves are allowed to make so much while so many others have so little. This is a standard critique of the wealthy elites who support the school reform movement. It’s persuasive, in its way, but too easy. Many public schools clearly are substandard, and many teachers are ineffective. Assuming that poverty is not going to be solved overnight, what other, more immediate steps might be taken to address these problems? How might Gates spend its money more wisely? McGoey offers little guidance on this. She seems to have visited few schools and talked to few teachers or parents. Nor does she give much space to the perspective of the Gates Foundation itself. As a result, her conclusions carry less weight than they otherwise might.
The same is true when it comes to the foundation’s work in public health. As McGoey briefly acknowledges, the foundation’s investment of more than $15 billion in this field “has done considerable good.” That seems an understatement. Thanks in part to the Gateses’ strong investment in vaccines for infectious diseases, deaths from measles in Africa have dropped by 90 percent since 2000. Over the last quarter century, tuberculosis mortality worldwide has fallen by 45 percent, while over the last dozen years the number of new malaria cases has dropped by 30 percent. And polio, which in 1988 was endemic in 125 countries, is today endemic in only two. The foundation has also played an important part in fighting the spread of HIV and helping those infected with the virus to lead productive lives. For this, Bill and Melinda Gates deserve much credit.
The question is, has this been the best use of their money? As McGoey notes, chronic diseases, as opposed to communicable ones, exact a staggering toll worldwide, yet the foundation has invested less than 4 percent of its funding in research on them, and the global health community has largely followed suit. “The failure to combat obesity, cancer and heart disease epidemics in poor nations,” she observes, “has been one of the most glaring mistakes of global development efforts in recent years.” An equally serious shortcoming has been the neglect of primary-care facilities in the developing world. The initial problems that the nations of West Africa faced in combating the Ebola outbreak stemmed in part from the weaknesses in their overall health systems. Interestingly, in late September, the Gates Foundation, together with WHO and the World Bank, announced a joint partnership aimed at improving access to primary care in poor and middle-income countries — a dramatic (if tacit) acknowledgement that the emphasis on fighting individual diseases has been too narrow.
I wish No Such Thing as a Free Gift had delved more deeply into this. The book offers few comments from practitioners on the ground in the developing world and scant firsthand information about the needs of villages and their populations. McGoey spends much more time discussing whether the Gates Foundation is protecting the patents of pharmaceutical companies and whether it is making common cause with Monsanto to spread genetically modified crops in Africa — popular concerns on the left — than exploring the critical matter of the possible distortions that the foundation, through its tremendous influence, has introduced into global health policies.
On one point, however, McGoey is convincing — the need for more analysis of this powerful foundation and the man and woman at its head. Bill and Melinda Gates answer to no electorate, board, or shareholders; they are accountable mainly to themselves. What’s more, the many millions of dollars the foundation has bestowed on nonprofits and news organizations has led to a natural reluctance on their part to criticize it. There’s even a name for it: the “Bill Chill” effect.
That’s not to say that there has been no critical coverage of the foundation’s work. Diane Ravitch has excoriated Gates along with the rest of the school reform movement in her book The Death and Life of the Great American School System, as well as on her blog. The New York Times and other papers have offered occasional close examinations of Gates’ work. And Joanne Barkan, in a 2011 article in Dissent titled, “Got Dough? How Billionaires Rule Our Schools,” offered a thoroughgoing critique of the education work of Gates and its fellow foundations. In another Dissent article on “how big philanthropy undermines democracy,” Barkan complained that “the mainstream media are, for the most part, failing miserably in their watchdog duties. They give big philanthropy excessive deference and little scrutiny.”
That may be changing. Alessandra Stanley, writing in the Times in late October, offered a skeptical assessment of the outsized claims made by Sean Parker and other Silicon Valley philanthropists. “Tech entrepreneurs believe their charitable giving is bolder, bigger and more data-driven than anywhere else — and in many ways it is,” she observed. “But despite their flair for disruption, these philanthropists are no more interested in radical change than their more conservative predecessors. They don’t lobby for the redistribution of wealth; instead, they see poverty and inequality as an engineering problem, and the solution is their own brain power, not a tithe.”
Dale Russakoff, in The Prize: Who’s in Charge of America’s Schools?, described the dysfunction that resulted from the $100 million contribution that Mark Zuckerberg made to the city of Newark in a bid to remake its schools and create a national model. Spending time with politicians, administrators, teachers, and parents, Russakoff showed how the “reformers” — convinced that they knew what was right for Newark — largely excluded teachers and parents from the policymaking process. That sparked strong grassroots opposition, and in the end little headway was made. Sobered by the experience, Zuckerberg and his wife last year announced $120 million in grants to schools in disadvantaged neighborhoods in the Bay Area, with the express intention of getting more input from teachers and community leaders.
We need more probing accounts of this sort. The power of the new barons of philanthropy is only going to grow. The risks they take and the bets they make will no doubt become bolder. If journalists don’t hold them accountable, who will?