Bill Gates shows what the end of perpetual philanthropy looks like

For the last quarter-century, Bill Gates has been the donor behind what has long been one of the nation’s largest private philanthropic foundations, a behemoth that has long dwarfed nearly all other charitable institutions. The Gates Foundation, in its commitment to a large, professionalized staff, driven by quantifiable data, and with its focus on global health, has served as a model for many other donors. And as an individual, Gates has long been the world’s most recognized philanthropist, in terms of media attention, accolades, and public knowledge. As one of the co-founders of the Giving Pledge, the campaign to get the world’s billionaires to donate more than half their wealth to charitable causes, he has also been the individual most closely identified with efforts to shape global philanthropic norms in an age of super-wealth. (Disclosure: I am an employee of the Urban Institute, which receives funding from the Gates Foundation.) That, in fact, is the best context in which to understand the significance of Gates’s recent announcement that he will give virtually all this wealth to the Gates Foundation over the next 20 years, and that the foundation would “close its doors permanently” by the end of 2045, after all that money has been given away. With Gates’s own wealth listed at north of $100 billion, and his foundation sitting on an endowment of more than $75 billion, Gates estimates that his foundation “will spend more than $200 billion between now and 2045.” As he explained it: “I have decided to give my money back to society much faster than I had originally planned.” In sheer monetary terms, this pledge, if honored, would be a very big deal. It would require the foundation to maintain an unprecedentedly high level of annual spending, likely doubling its current $9 billion per year. And it would require contemplating a world in which the Gates Foundation no longer exists. But the extent to which Gates’s announcement might encourage important shifts in broader philanthropic norms may be an even bigger deal. To put it simply: It could galvanize billionaires to give more — and perhaps more importantly, to give more faster. Please give — faster “You could say this announcement is not very timely,” Gates quipped to the New York Times in an interview accompanying his announcement. He meant by this that his new pledge was fueled by an optimism about philanthropy’s power to dramatically improve global health that sits oddly with a prevailing sense that progress seems to be eroding. But looked at another way, what was most significant about Gates’s announcement was not the sheer dollar figure that received so much attention, but its embrace of the importance of timeliness in philanthropy. By philanthropic timeliness, I mean that he’s elevated his responsibility to the current moment, to contemporary needs, exigencies, and opportunities, as the driving motive in his giving. In the rollout of his announcement, Gates has made clear that he is placing a premium on getting more money out the door now. He told the Times that “this is a “miraculous time,” ripe with all sorts of possibilities for astonishing advances in global health, like single-shot gene therapy for HIV/AIDS and new tools to prevent maternal and childhood mortality, like portable, AI-enabled ultrasounds. Given all these opportunities, Gates says, “It makes a big difference to take the money and spend it now versus later.” That might seem obvious. But for many philanthropists, foundations are instruments designed as much to warehouse wealth as to give it away. Gates is now putting his celebrity brand behind the latter, pushing for present-day concerns to be met by large-scale philanthropic contributions. But there’s obviously another reason why the current moment matters. Gates’s announcement acknowledged that he’s committing additional funds at a time when governments around the world, especially in the US, are slashing their own funding for global aid. He has maintained his insistence that philanthropy can never adequately stand in for government funding for global health — in 2023, USAID managed more than $35 billion in appropriations, for instance — and he’s situating large-scale giving less as confirmation of the superiority of private philanthropy than as an urgent argument that Elon Musk’s team got it wrong in gutting aid. “It’s unclear whether the world’s richest countries will continue to stand up for its poorest people,” he wrote in a blog post explaining his decision. “But the one thing we can guarantee is that, in all of our work, the Gates Foundation will support efforts to help people and countries pull themselves out of poverty.” For this reason, Musk, who has bragged about “feeding USAID into the wood chipper,” has emerged as a sort of nemesis in the rollout of the announcement. “The picture of the world’s richest man killing the world’s poorest children is not a pretty one,” Gates commented to the Financial Times. It’s an uncharacteristic public feud for Gates, who until recently has studiously cultivated a public persona that avoided any hint of partisanship. Still, his comments did conjure up one inconvenient fact: Musk has actually signed the Giving Pledge (in 2012). But Gates took this on directly, and in doing so, offered an implicit critique of the system of philanthropic norms that he had taken the lead in developing. “The Giving Pledge — an unusual aspect of it [is] that you can wait until you die and still fulfill it,” he said in the New York Times interview. And it’s true that from its conception, the Giving Pledge was agnostic on the question of timeliness. The metric of success for the Pledge was getting “this set of billionaires to think earlier in their life about how they’re going to give money back, whether it’s during their lifetime or at their death,“ as Melinda French Gates said during a 2010 interview with Charlie Rose. Gates is now signaling a call for donors to do more than start thinking about giving — and start actually giving more now. As he has explained it, he is now pushing the wealthy to increase not just the scale of their giving, but the pace of their giving too. It’s something Gates learned from the example of Chuck Feeney, the co-founder of a duty-free shopping empire. Feeney gave significant amounts anonymously for years, only willingly embracing a public identity as a mega-donor as a means of spreading a gospel of “Giving while Living.” It’s an ethic that Gates namechecked in his announcement as having “shaped how I think about philanthropy.” The need for giving while living There are a host of reasons why donors have generally preferred to defer giving, from not having the time to devote to philanthropy, to the compulsion to get the gift exactly right, to a desire to maintain funds to address future problems, to the simple fact that for some, it’s just hard to let go of wealth. On an institutional level, one of the main challenges is the commitment to perpetuity, which imposes a certain ceiling on spending levels so that the endowment isn’t drained. For much of the final decades of the 20th century, and for the first decade of the new century, perpetuity was something of an implicit default in the philanthropic sector. In the deliberations over the Tax Reform Act of 1969, which established the regulatory regime under which foundations would operate for the next half-century, Congress considered imposing a 40-year time limit on foundations. The proposal, championed by Sen. Al Gore Sr., was ultimately rejected, and in its stead, a 6 percent (changed a few years later to 5 percent) annual payout requirement was passed, as part of a “Grand Bargain” that exchanged some commitment to “philanthropic timeliness” for the legitimation of perpetuity. But over the last two decades, the tendency to treat perpetuity as the default mode of philanthropy has eroded. The reasons behind that shift are varied, from the urgency of the environmental crisis (several of the first wave of 21st-century spend-down foundations devoted themselves to the cause), to the propensity of young tech donors who had made their fortunes relatively quickly to look to spend their philanthropic resources quickly as well. In a 2020 global survey, Rockefeller Philanthropy Advisors found that nearly half of the organizations established in the 2010s were founded as time-limited vehicles, up from around 20 percent in the 1980s. A 2022 survey found that, “Of the responding philanthropies established since 2000, almost one quarter (23 percent) were established as time-limited, representing an increase of 22 percentage points.” In fact, Bill and Melinda French Gates had never really committed their foundation to perpetuity. Seven years after creating the foundation in 2000, they had pledged to shut it down 50 years after their deaths. At an event in 2022, Gates had suggested that the foundation would last another 25 years. But the new announcement of the 2045 date is a much more definite endorsement of “time-limited philanthropy.” So this might very well be a pivotal moment for the norms surrounding philanthropic timeliness. We’re living through a period defined by cascading crises — climate, racial justice, Covid, and now those related to the Trump administration’s budget cuts. In response to each, a handful of foundations have significantly increased their spending rates; some have committed to spend down their assets. It’s also been a period characterized by the proliferation of high-profile billion-dollar philanthropic pledges from individual donors. These are timely to the extent that they draw immediate public and media attention, but they have not necessarily translated into the commensurate timely disbursement of philanthropic funds. In recent years, MacKenzie Scott captured considerable attention, and for a moment rivaled Gates as the nation’s most prominent public philanthropist, with the speed and urgency with which she embraced the challenge of directing her Amazon fortune to philanthropy, and with a commitment to “keep at it until the safe is empty.” She’s given some $19 billion away in the last five years, though even she has struggled to keep up with the relentless pace of compounding interest and Amazon’s surging stock price; her total wealth has barely budged since. Taking it all in, then, there hasn’t yet been a definitive shift toward giving now in philanthropy. Might Gates’s announcement help precipitate one? If it does, Gates will cast light on a whole other assortment of debates within the philanthropic sector. One of the most important of these relates to a chief paradox of contemporary criticisms of philanthropy, which boils down to the old joke: “The food here is terrible — and the portions are too small!” Alongside demands for more and faster giving sit concerns about the ways mega-philanthropy can warp democratic norms and institutions. Gates has not merely been one of the most recognized and celebrated philanthropists, but also one of the most criticized, on precisely those terms. Whether the surge of giving that will be coming from the Gates Foundation is compatible with democratic demands — whether, for instance, it can help shift power to local communities and institutions — will likely be as important a question to the construction of the next generation of philanthropic norms as those related to scale and pacing.

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Bill Gates shows what the end of perpetual philanthropy looks like