The $31 Billion Behemoth

Warren Buffett’s June announcement of the $31 billion gift to the Gates Foundation is arguably one of the most significant events in the history of philanthropy. For many foundations, having too much money to give may seem to be great problem to have.

Now that the Gates Foundation is facing the challenge of making effective change with twice the amount of money to distribute and double the efforts of its current staff, the reality of managing a gift of this magnitude and what that really means is finally emerging in Stephanie Strom's article "Gates’s Charity Races to Spend Buffett Billions" published Aug. 13 in the New York Times.

One statement in this article particularly stuck with us:

“One out of every 10 foundation dollars spent is going to have the Gates name on it, and that gives it influence that is impossible to calculate,” said Rick Cohen, executive director of the National Committee for Responsive Philanthropy, a research group.

“And as currently structured, just four people are deciding how to spend all that money,” Mr. Cohen said, referring to Mr. and Mrs. Gates; William Gates Sr., Mr. Gates’s father; and Patty Stonesifer, the foundation’s co-chairwoman and president."

The potential impact of this gift to the philanthropic sector has been discussed and analyzed and written about (check out Tom Watson’s roundup of blogs about Buffett’s gift), we know. However, for FLiPs, the Gates Foundation will also set precedents that will have an affect on our own processes and functions in the future.

The question we’d like to pose is: what kind of affect will this have on your organization?