The Philanthropic Family

Bill and Melinda Gates made the independent and widely-applauded decision to spend down their  foundation 50 years after their lifetime. In fact, foundations who elect to attempt perpetuity are often criticized for their ego.  But the decision to sunset means they have to spend a few extra billion dollars each year. This is the down side of sunsetting: you have to get the dollars out the door. I won’t bother to ask for your sympathy over how hard it is to give away money, but I will at least ask that the global health community at large withhold the snark and judgment evident in a study as unhelpful as the one just published in the Lancet.

In one example of absurd critique, the authors of the study note that “65% ($5.82 billion) of all Gates Foundation global health funding was shared by 20 organisations, including five global health partnerships—such as the Global Fund to Fight AIDS, Tuberculosis and Malaria and GAVI Alliance, which together received a quarter of all funding through ten grants.” The study expresses concern that so few organizations receive such a large chunk of the funding.

If the foundation didn’t give large, multi-million dollar grants to trusted intermediaries, they would be attempting to get to know hundreds of smaller organizations, administer thousands of grants each year. To reach $2 billion–the amount the foundation distributed in 2007– in increments of $250,000, you’d have to give out 8,000 grants.  The staffing needed for Gates to do due diligence, coordinate the logistics and effectively gather data from 8,000 smaller organizations would be overwhelming–and the “watchdog” community would be frothing at the mouth over the “wasteful overhead.” The Gates Foundation offers this explanation on its web site: “Most of our grantmaking goes to large intermediary partners—organizations that in turn provide funding and support to those doing the work in the field. This lets us take advantage of expertise that others already have, and it builds up expertise among people in the field rather than simply on our staff.”

A Question of Influence

In reality, the use of well-respected, widely-connected global health partnerships and intermediaries like the Global Fund is the only viable option for distributing billions in philanthropic funds.  At the same time, after first criticizing them for being too narrow and playing favorites, the authors then fault the Gates Foundation for being too widely-connected to the global health community:

“The Gates Foundation funds a wide range of contributors to global health, extending from UN agencies to global health partnerships, the World Bank, universities, and non-profit and non-governmental organisations. All the key contributors to global health have an association with the Gates Foundation through some sort of funding arrangement. Coupled with the large amount of money involved, these relations give the foundation a great degree of influence over both the architecture and policy agenda of global health. Through its funding of non-governmental organisations and policy think tanks, the foundation also confers power and influence on a selected number of organisations and in doing so, establishes some leverage over the voice of civil society.

These observations are pertinent because the Gates Foundation is not a passive donor. The foundation actively engages in policy making and agenda setting activities; it has representatives that sit on the governing structures of many global health partnerships; it is part of a self-appointed group of global health leaders known as the H8 (together with WHO, the World Bank, GAVI Alliance, the Global Fund, UNICEF, the United Nations Population Fund [UNFPA], and UNAIDS); and has been involved in setting the health agenda for the G8.

Actually, this coordination role of the Gates Foundation is in some ways its most important function.  A private foundation has the luxury of independence.  Without the need to raise money like the charities or earn votes like the government actors, the foundation has its own endowment that provides seed money for a thorough investigation of the problem.  In the worst case, that can mean a foundation operates at the whim of the founders but in the best case it means that the foundation can play an important coordinating role among many actors.

“Strategic Philanthropy”

I used to work for the Pew Trusts, a foundation that develops their programmatic strategies with input from a cadre of experts, drawn from academic, practical, public and private organizations.  They assess the problem, look for the points where the infusion of money and know-how can make a difference, evaluate the capacity and reputation of organizations in the field, and get the various pieces all moving in the same direction.  Where many actors on the public stage have a particular capacity, and they may execute their programs exceptionally well, few have the independence and wide-ranging expertise to handle all aspects needed to create systemic change. Foundations can bridge these worlds, between academic research, front-line service delivery, grassroots community development,  grasstops advocacy, for-profit entities, and so many other silos, to get all the oars rowing in the direction of an achievable solution.

Let’s be realistic: most foundations aren’t operating in such rarefied air.  That why we like to critique them for not being as effective as they should be at creating (supporting?) measurable social change. And yet, whenever foundations actually do this, when they are actually effective at influencing society, somebody starts attacking them for being influential.  Damned if they do, damned if they don’t.

The people who start attacking them, though, always seem to be the people whose personal passion, or whose pet project, wasn’t funded.  People who disagree with the foundation’s conclusions.  That is, because the Gates Foundation didn’t choose their preferred program areas, they assume there was no legitimate process for selecting program areas. Ironically, if they actually did examine and analyze the foundation’s method for selecting program focus areas, THAT would be relevant and useful.  Given the inevitable influence of the Gates money, it’s important that their decision-making process be carefully designed. Did the Gates Foundation solicit input from a wide range of medical practitioners, scientists, global health experts, international development organizations, etc.? Or is their circle of advisers too insular? Did they successfully explain and defend their analysis of the problem? Or were they drawn too early toward one theory, like a homicide cop focusing on one suspect without properly investigating the others? What assumptions are built into their decision-making, and is there evidence to defend those assumptions?  What is their basis for believing their portfolio of grants will make a meaningful impact on the problem? Are they watching for signs of success, of failure or of unintended consequences and reacting to them? Or do they set the programs in motion and wait and hope they have the intended impact?*

Process Evaluation

With these questions in mind, this paragraph from the Lancet study is one of the most egregious: “Grant making by the Gates Foundation seems to be largely managed through an informal system of personal networks and relationships rather than by a more transparent process based on independent and technical peer review.”  Well, that sentence “seems” to be largely conjecture from someone who didn’t have a seat at the table. You don’t like the conclusions (the authors think they focus too much on vaccines and technology instead of infrastructure and want more money for maternal health) so you start trashing the process, an unfortunate logical fallacy. It’s legitimate to ask about the process, if a bit too early to conclude that it was insufficient. What do we know about their process?

On their own web site, the Gates Foundation lays out its decision making at a fairly high level.  You can read an entire document dedicated to explaining how they make decisions, but here are a few excerpts:

“Long before we make a single grant for any given issue, we listen and learn about problems that cause great inequity. Whether the challenge is low-yield crops in Africa or low graduation rates in Los Angeles, we begin by immersing ourselves in information about problems that cause great harm and get far too little attention.”

“As we learn about an issue, we ask whether we can make a difference with our money and our ability to bring partners together. We get involved only if we believe we can make a unique contribution.”

“For each opportunity, a program area considers its cost, the risk associated with it, its long-term viability, and, most important, its potential impact on people’s lives. Based on the answers to these criteria, and after extensive discussion, the program identifies a strategy, which includes a budget, the results they hope to achieve, and a plan to measure those results over the short and long term.”

This general explanation of process is a nice start, but if the Gates Foundation wants to counteract this criticism (and avoid being compared to evil genius Dick Cheney and his secret meetings with anonymous energy advisers) more specific transparency about the foundation strategies, who was consulted in developing them, what approaches were considered and discarded and why, etc. would be a great set of information to release to the global health community. The problem is, I’m honestly not sure what the Gates Foundation gets out of it.  People will take potshots at the experts they consulted, complain that their personal expertise wasn’t represented, disagree with the foundation’s assessments (and complain loudly that they were scaring away other funders) and generally be a pain in the ass. Practically speaking, it’s hard to overcome this set of disincentives.

Let’s Get Good Critique

I agree with some comments from study co-author McCoy that, given the huge amount of influence wielded by the Gates Foundation, it’s important to our collective global health that we have some degree of comfort with how this private entity makes their funding decisions.  That said, I’d be far more interested in an analysis of Gates Foundation activities by fellow change makers. By someone who truly understands the context of a U.S. private foundation, the realities of distributing huge amounts of money, and can ask the right questions about whether the foundation’s decision-making process is sufficiently robust to overcome the challenges of getting good information when everyone is motivated to tell you what you want to hear. On their own, the foundation has established a set of best practices for strategy development and grant selection, one I think the global health community would find quite acceptable, if only they’ll read it.  It’s that process to which they should be held accountable. If it’s all talk, the Gates Foundation gets an F and should be shamed into doing better for all of us. But if they walk the talk, we can argue about their conclusions and try to change their mind but we have to respect that they went through a good faith process.

Perhaps the answer here is to call on the Gates Foundation to hire someone to undertake an independent evaluation of whether they have followed their own process and how they could make their process more rigorous. Ask them to publish those findings and follow up on the recommendations.

In the end, I can’t help but wonder if that widely-applauded decision to sunset the foundation–the fact that’s forcing them to shovel billions out the door each year–might be reconsidered in light of the fact that so much money creates so much influence for a private actor.

“Disclosure: I was briefly a consultant to the Gates Foundation in 2004 and 2005 as they considered these questions and how to evaluate and hold themselves accountable as the world’s largest grantmaker. I also used to work in Planning and Evaluation at The Pew Trusts and was one of the authors of the document linked above.