The impact of Gates’ divorce may have nothing to do with the Gates Foundation

Divorce is generally a private matter that affects a family, with few consequences for the general public.

But the split between Bill and Melinda Gates could have dire consequences for global health and American life, as they are the nation’s largest charitable donors – a sure sign of the central role billionaire philanthropists play in our society.

Immediately after the surprise announcement, everyone from billionaire critics to former Gates Foundation executives were looking for explanations of what this could mean for the world’s most important philanthropy. For some, the divorce suggested that major strategic changes could emerge in the years to come, with entire nonprofits and hundreds of billions of dollars at stake. For others, the Gates’ divorce was not so different from that of other couples – a reflection of the flawless legal commitments they had already made and the family’s stated commitment to working together.

“I think the real story here is not the divorce itself that has an impact, but the public reaction to the news,” said Megan Tompkins-Stange, a professor at the University of Michigan who studied from near the Gates Foundation. “There was widespread fear and anxiety on the part of the foundation’s current beneficiaries, which in itself illustrates how Gates’ actions are causing ripple effects across the rest of the philanthropic industry.

The angst surrounding Gates’ divorce isn’t surprising considering what happened when Jeff Bezos and MacKenzie Scott announced its split in 2019. While we didn’t know it at the time, the philanthropic world ended up transformed through their $ 36 billion divorce settlement. What’s different about this Seattle tech billionaire divorce is that we know that this deal will reverberate through the world of mega-charities in one way or another due to their track record as major donors.

Bill and Melinda Gates created a charitable trust that today manages around $ 50 billion on behalf of the Foundation – this money is donated irrevocably and cannot be redirected. But there is another one estimated at $ 150 billion approximately of Gates’ wealth which is currently outside the Foundation walls, an amount that will likely be shared between the couple as part of a divorce settlement to be announced.

Now that money depends on their individual whims – rather than collective ones, it is possible that fortune will end up funding work different from what it would normally have. When the Gates launched the pledge ten years ago, the couple wrote that they “had dedicated the vast majority of our assets to the Bill & Melinda Gates Foundation.” We don’t know if this will always be the case after the divorce.

So in some ways the bigger story is the money that has yet to be allocated to the Gates Foundation and is currently in places like Cascade Investments, the Gates family’s personal investment store.

That money, Gates insiders speculate, could theoretically have gone to the Gates Foundation over the next several decades, but it could now go to companies like Pivotal Ventures, Melinda Gates’ equality-focused personal investment company. of the sexes; or at Gates Ventures, her husband’s investment store.

A former Gates Foundation executive, anonymous for the frank point of view, questioned whether Melinda Gates, over time, would focus her energy more on Pivotal and less on their jointly managed foundation.

The Gates Foundation itself presents a calm face: the $ 50 billion philanthropy has said Bill and Melinda Gates will remain as trustees of the foundation. “They will continue to work together to shape and endorse the foundation’s strategies, advocate for foundation issues and set the overall direction of the organization,” a spokesperson told Recode.

But while that may be true now, divorces are complicated, and even an initially friendly split can become acrimonious or strained over time. It is therefore impossible to know exactly how the next few years, or decades will unfold.

“Even though they both clearly run the foundation, I see no scenario where it doesn’t turn into what is close to his heart and what he holds dear,” said another former leader, who described as already being a “massive and complex field of landmines between the foundation, Pivotal and Gates Ventures”.

Even people who worked closely with the Gates couple disagree on how the divorce might affect the foundation. Asked how big the situation is for the Gates Foundation, on a scale of 1 to 10, a former executive indexed it with at least a 7. Another former Gates aide gave him a 3. A third was still more optimistic, stating regarding the program, the impact would be a 0 or a 1.

Big changes could come, an insider said, but only after Doors are no longer concerned with what is sure to be a complex legal process. In the meantime, at least, some of the former leaders predict that day-to-day internal issues could become more crippled if the couple end up struggling to cooperate, especially for people like Mark Suzman, CEO of the Gates Foundation, who will have to manage the council.

But when it comes to the nonprofits themselves that depend on the Foundation’s largesse? There may be anxiety, but less drama than it seems.

For now, the prevailing sentiment in the Orbit of the Doors is a brooding gloom for their mentors.

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