Rich philanthropists have the power to fund risky, long-term projects. So why don’t they?by Elizabeth Pisani / October 21, 2009 / Leave a comment
Published in November 2009 issue of Prospect Magazine
Last year, the Bill & Melinda Gates Foundation asked HIV specialists what the charity should do to fight the virus in the developing world. More investment in vaccines, said some; more work on bug-killing microbicides, said others. More clean needles for drug injectors, said I. There was only one creative suggestion: “Treat HIV as if it were Netscape. Crush it like a bug.” Remember Netscape? The successful internet browser was manipulated out of existence as Microsoft skewed market incentives and bundled Internet Explorer with Windows. Could we do the same with HIV?
Maybe. When Thailand started closing brothels that didn’t enforce condom use, infections plummeted. Grants from charities like the Global Fund have bribed governments to do things voters don’t like paying for, such as free clinics for prostitutes.
So is the Gates Foundation rolling out similar programmes globally? Sadly not—it is too risk averse. People who give away their own money don’t need to worry about politically popular causes, or delivering measurable results in the short term. They could spend on the problems which charities can’t rattle collection boxes for, or development agencies won’t touch for fear of alienating voters. But, to do this, donors must want to touch the untouchable, and their staff must dare to propose it.
And that’s rare. As one foundation worker told me recently, “A lot of staff sit around anticipating what the Dear Leader will want.”
Few philanthropists can compete with Bill and Melinda Gates for sheer generosity. The market hiccup wiped $7bn off their foundation’s assets but that still leaves $30bn to play with. This year they expect to dole out $3.5bn in grants, more than the World Health Organisation’s annual budget. However, it’s the growth of smaller-scale charities, with individuals as the main source of income, that is most notable. According to the consultancy New Philanthropy Capital, 180 charities of this ki…