Gates Foundation Expects Giving to Be Flat This Year

The Bill & Melinda Gates Foundation plans to hold its giving steady at roughly $3-billion this year, with new commitments to fight polio to be announced this fall, according to its chief executive, Jeffrey S. Raikes.

In his annual “state of the union”-style report released today, and in an interview with The Chronicle, Mr. Raikes discussed the foundation’s key next steps to meet its mission and to improve its communications with grantees following sharp criticism in a survey this summer.

The Gates fund’s giving will probably remain flat for now. After losing about 23 percent of its value in 2008, the foundation’s endowment recovered somewhat, from $29-billion to $33-billion last year.

Mr. Raikes said the foundation has for a time been distributing nearly 7 percent of its assets, above the legally required 5 percent a year, but that it will gradually scale back to roughly 5 percent as its endowment recovers.

Mr. Raikes—a former Microsoft employee who celebrates his two-year anniversary as president of the Gates foundation this month—has gotten kudos for discussing what he calls the “sobering” findings of an anonymous survey of grantees, conducted by the Center for Effective Philanthropy, that the foundation released in June.

Likening the survey results to customer surveys he found useful while at Microsoft, Mr. Raikes said that the foundation has taken some initial steps to smooth relations, such as ensuring that all nonprofits know who their program officer is and creating “orientation kits” for new grant recipients. Other more specific steps will be unveiled this fall, he said.

Turnover at the foundation was frequently cited by grantees in the survey as a problem. Mr. Raikes said the challenge at Gates hasn’t been people leaving the foundation for other employers—he says that rate is consistent with other organizations—but the huge growth Gates has gone through in recent years.

The foundation has tripled in size since 2007, so new hires have been assigned to grantees with high frequency.

In the future, Mr. Raikes said, “We won’t be growing at quite the same percentage.” He added, “We’re much more attuned to the stress that this puts on our connection to grantees, and we’ll be able to handle it that much better.”

While some high-level employees have left the foundation, sometimes to go into government, Mr. Raikes said it’s a good thing to have Gates alumni in high places.

Improving Communications

Foundation officials say Gates’s latest annual report—published this week—represents another step toward improved communication.

The Gates foundation abandoned printed annual reports in favor of online versions in 2008, and this year’s report incorporates video interviews with staff members and tries to take a more interactive approach. The Web report is arranged not by grant-making programs but by “stakeholder”categories (employees, grantees, local community, for example).

In its report, the foundation touts its embrace of Twitter and Facebook, its partnership with Good magazine to draw attention to U.N. antipoverty benchmarks known as the Millennium Development Goals, and its sponsorship of the live-streamed TEDxChange conference to discuss the goals.

“We really stepped back and said, Who are our readers and who is going to be our audience?” Mr. Raikes said. “We tried to design it in a way that I think will be much easier for them to engage with.”

Fighting Polio

In his letter, Mr. Raikes highlights polio, whose eradication he says is achievable but has been thrust into question due to decreases in government spending as a result of the global economic crisis. The Gates fund plans to step up its giving to polio over the next several years—although the fund won’t be announcing until the fall exactly how much it more it will spend. (Last year, the Gates foundation gave $253-million toward eradicating polio).

Foundation leaders will be increasingly speaking out about the importance of wiping out the disease, Mr. Raikes said.

“If we backslide now, the challenge of then trying to go back later and undertake eradication may just be too great,” he said.