Gates Foundation to Increase Funding to $8.3 Billion This Year

The chief executive of the Bill & Melinda Gates Foundation offered a vigorous defense of the power and influence wielded by the nation’s largest private philanthropy as he announced that the foundation would award $8.3 billion in grants this year, a new high.

In his annual letter, Gates chief executive Mark Suzman wrote that the grants, a 15 percent increase over the amount the foundation gave in 2022, according to preliminary figures, were spurred by global failures to adequately respond to the spread of infectious diseases, reduce poverty, promote gender equality, and address the effects of climate change.

The grant maker predicts its annual grant budget will grow to $9 billion by 2026.

In an interview, Suzman said the increase in grants is a “call to action” to better respond to problems that have worsened around the world. European nations, he said, have diverted global health funds to support refugees from the war in Ukraine, and nations in the developing world are largely tapped out financially after three years of Covid.

“The global response has been far short of what it really should be,” Suzman said.

He listed some of the criticisms that have been leveled against the mega philanthropy in the letter — and made no apology for the reach and influence the foundation has at its disposal. Many critics, he said, have suggested that when the grant maker focuses its attention on a specific problem, other issues are left by the wayside. What’s more, because the foundation is able to give so much money, critics say, it is able to set global agendas without being held accountable and squelch dissenting opinions.

Suzman wrote that it’s true that the foundation’s ability to make large grants and the star power generated by founders Bill Gates and Melinda French Gates gives the foundation a lot of sway among world leaders. But, he said, that’s precisely the point. Because the foundation is not constrained by term limits or the pressures of quarterly profit statements, it is able to support and advocate for novel approaches companies and elected governments cannot.

Many Ways to Give

Suzman’s letter is the second high-level explanation of the foundation’s approach in recent months. In December Bill Gates wrote an essay in which he defended his preferred philanthropic approach: a large foundation well-staffed with experts. The institutional approach he champions seems at odds with the giving style of his former wife, French Gates, and of MacKenzie Scott, who have both pushed for philanthropy to yield decision-making power to grantees — although he didn’t mention either in his essay.

There should be a diversity of ways in which philanthropists give, Suzman said in an interview, explaining that while Scott’s no-strings-attached model has merit, so does the Gates foundation’s approach, which involves identifying areas where governments and the private sector have failed to address a problem and getting partners to join Gates in making large commitment to fill those gaps.

The result, Suzman wrote in his letter, is not “a couple of unelected billionaires setting the agenda for global health and development.”

The letter seeks to demonstrate that the foundation is guided by a set of priorities agreed to internationally in the United Nations Sustainable Development Goals and the input of leaders at the global, national, and local levels.

“It’s important that we be more proactive and forthright in explaining that model and approach to try and prevent some of the misunderstandings and sometimes outright misrepresentation of what we do,” he said. “We’re often just seen as a kind of big black box.”

By stressing the foundation’s collaboration with other organizations and national leaders, Suzman acknowledges that improvements in public health can be trickier to attain than developing a new technology or vaccine. Progress depends on changes in policy and attitudes, which can take time.

As a result, he said, he suggested to Bill Gates that he change his frequent description of himself as an “impatient optimist.” Suzman prefers instead to say that the Gates foundation is full of “patient optimists” who act with urgency.

So if the foundation has supported a new drug, “we’re constantly thinking about how it’s actually going to reach the people and feel owned and driven and endorsed by those that we’re working to help,” Suzman said.

In three examples of the foundation’s work — in agriculture, combating malaria, and education — Suzman stressed that the foundation is responding to agendas set by national and local governments and local nonprofits. For instance, he wrote that Gates is working with local institutions to put women farmers at the “heart of solutions” by providing help to access markets and provide leadership training.

While some observers point out that the Gates foundation’s grant-making budget is small compared with national governments’ to support things like global health, the grant maker remains a key donor to organizations like the World Health Organization and Gavi, the Vaccine Alliance, which the foundation started with a 1999 grant.

The power the Seattle grant maker has over global health organizations concerns Brook Baker, a law professor at Northeastern University School of Law and senior analyst for the Health Global Access Project, an international advocacy organization that pushes to make HIV treatments available.

The Gates foundation, he said, is heavily invested in the discovery of new drugs and defends pharmaceutical companies’ intellectual property rights at the expense of responding to health needs around the globe. The grant maker’s focus on a market-based approach means other ideas don’t get a fair hearing.

“Its fingerprints are all over the policies that are adopted,” Baker said. “There’s a fundamental problem when a person who has amassed great personal wealth, who has made some important commitments towards improving global health has unreviewable power to influence policy.”

A New ‘Social Compact’

The power a foundation like Gates wields should not prompt a policy debate over whether the tax code should limit charitable giving incentives or the size of endowments, as a way to hobble the influence private donors, said Melissa Berman, CEO of Rockefeller Philanthropy Advisors. It’s more important, she said, to focus on other areas of the tax code that relate to wealth inequality, like taxes on capital gains and income, and the strength of the social safety net.

“This is a question for capitalism and wealth accumulation, not philanthropy,” she said. “Philanthropy is the tail, not the dog here.”

By publicly addressing questions about its own influence, Berman argued, the Gates foundation is attempting to respond to questions that all major philanthropies are dealing with as a new “social compact” develops between donors and the people they support. The evolving relationship and the public’s changing expectations of philanthropy, she said, will be a departure from the top-down approach employed by many foundations, where experts develop theories for how to generate social change or develop medical and technical fixes to problems.

The Gates Foundation is starting to realize that not all the answers lies within its walls, Berman said. As evidence, she points to the Gates foundation inviting outsiders to join its expanded board last year and Suzman lauding the work of regional organizations and highlighting what he described as the foundation’s dedication to transparency.

“Twenty years ago, that letter would have been about the organization’s theory of change and logic model and the ROI that it was getting — period,” Berman says.

The first annual letter from the foundation, written by Bill Gates in 2009, contains pages of charts showing success in reducing childhood mortality, increasing agricultural yields, and an expression of confidence from Gates that “our maniacal focus on drawing in the best talent and measuring results will make a difference.”