Gates foundation to spend all assets within 50 years of trustees' deaths
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Friday December 1, 2006
The world's second richest foundation, The Bill & Melinda Gates Foundation, announced that all assets of the organization will be spent no later than 50 years following the death of the longest serving trustee, today's Wall Street Journal is reporting.
The foundation has assets of over $32 billion and has a commitment from financier Warren Buffet to donate an additional $31 billion.
In May, the Economist reported that with its current level of assets, the Gates Foundation is second only to to Stichting Ingka Foundation among foundations worldwide. Stichting Ingka Foundation owns the international furniture and home store giant, IKEA.
In related news, the Associated Press has reported that the Gates Foundation will be restructured to separate the management of assets from the organization's grantmaking arm.
Excerpts from the Wall Street Journal subscription only article follow:
The Bill & Melinda Gates Foundation said it will spend all its assets within 50 years of the death of its last trustee, a decisive move in a continuing debate in philanthropy about whether such groups should live on forever.
The foundation said the move reflected a decision by its three trustees, Bill Gates, 51 years old, Melinda Gates, 42, and investor Warren Buffett, 76, to do "as much as possible, as soon as possible" to further its work. Its main programs involve improving health and economic development globally, and improving education and increasing access to technology in libraries in the U.S. In June, Mr. Buffett pledged $31 billion to the foundation.
The decision is expected to influence other charities to consider following suit. The Seattle-based foundation separately plans to increase spending to about $3.5 billion a year beginning in 2009 and continuing through the next decade, up from about $2.75 billion this year.
Establishing a lifespan for a foundation "puts a lot of money back into circulation that otherwise would just be sitting there earning income," says Joel Fleishman, professor of law and public policy at Duke University. The risk, he says, is "you may end up wasting money in the process" of boosting spending, though he believes that risk is mitigated by the long period of time before the Gates foundation phases out.