November 14, 2016 | Read Time: 5 minutes
Bill and Melinda Gates, who have funneled billions of their own dollars to their foundation, are now looking to attract contributions from rank-and-file donors.
The Bill & Melinda Gates Foundation announced Monday the creation of Gates Philanthropy Partners, a nonprofit set up to receive donor contributions. Through it, donors can piggyback on the foundation’s work of supporting global health, international development, and American education.
Gates Philanthropy Partners will be led by Robert Rosen, a director at the Gates Foundation who oversees the grant maker’s efforts to strengthen philanthropy. It’s work that includes the Giving Pledge, a commitment by ultra-wealthy people to give most of their fortunes to charity within their lifetimes.
Mr. Rosen will now also solicit gifts from everyday donors. He sees Gates Philanthropy Partners as a way to connect with new donors who seek guidance on where their gifts will have the most impact.
It might seem ironic that the Gates Foundation is taking in donations. After all, the foundation is the nation’s largest private philanthropy, with nearly $44 billion in assets. But Mr. Rosen said the selling point of the new nonprofit is that foundation’s expert staff can help would-be donors, who often get flummoxed when trying to decide which charities are doing the best work. In many cases, they don’t have the wherewithal to research the full range of options and end up deciding not to give at all, Mr. Rosen said.
“Navigating that space can be quite complex,” he said. “We’re looking at what might be done to excite support and reduce some of the friction that comes into people’s giving.”
Any gift to the new nonprofit will be distributed among current Gates grantees after the donor consults with the foundation’s staff about where the need is greatest. Donors will benefit from the due diligence provided by the foundation and later will be able to check out what sort of impact their gift had by reading the foundation’s annual report.
Quick Turnaround
This won’t be he first time donors will have contributed to the foundation. Gates has received more than $32 million in unsolicited gifts since 2000.
Many of them have been small. In 2015, for instance a group of California high-school students sent in a check for $25 to be used for HIV research, according to the foundation. Others mark milestones in donors’ lives: One newlywed couple gave on behalf of their guests in lieu of wedding favors.
“In the coming years, we would like to personally thank each and every one of you for enriching our lives,” the couple wrote. “In the meantime, we have elected to donate money on your behalf to the foundation formed by two of our heroes — Bill and Melinda Gates.”
Mr. Rosen declined to predict how much money Gates Philanthropy Partners would raise.
In some ways, the nonprofit will work like a community foundation, Mr. Rosen said. Community grant makers sift through charities in a region to decide which ones have the most worthy projects and invite local philanthropists to give through donor-advised fund accounts managed by the foundation. But there are key differences: The Gates organization is not a donor-advised fund, it doesn’t manage money for donors, and any money it receives, says Mr. Rosen, will be given to charity within a year. There is no time limit for the distribution of donor-advised funds.
“We don’t want to sit on that money,” he said. “We want it to be deployed as rapidly as possible.”
Talks With Donor-Advised Funds
The nonprofit is in early talks with commercial donor-advised funds about how they can combine efforts to encourage giving, Mr. Rosen said. One of the strengths of the large commercial funds, which have emerged as the largest charities over the past decade, is their ability to absorb illiquid assets, such as art and closely held stock, and turn them into philanthropic dollars. Gates Philanthropy Partners will not do that, Mr. Rosen said. Rather than working as a money manager, the nonprofit will focus on channeling funds where the needs are most critical. He said discussions with donor-advised fund organizations are at an early stage but that the new nonprofit could wind up receiving gifts from donor-advised fund account holders.
The Gates imprimatur could yield more donations, according to recent research.
In field tests conducted in 2012, researchers Dean Karlan of Yale University and John List of the University of Chicago found that when international aid groups got matching gifts from the Gates Foundation, more people gave in response to the match — even donors with a limited history of giving to aid groups — than if it had come from another source.
With the cooperation of the Gates Foundation, the researchers sent fundraising letters on behalf of TechnoServe, a charity that focuses on international development and poverty reduction. Half of the letters identified the Gates Foundation as the matching donor. The other half kept the identity of the matching donor secret. People who received an appeal mentioning Gates were 26 percent more likely to send a check.
The Gates match, the researches suggest, gave TechnoServe a stamp of approval from an authoritative source, unclouded by the complexity surrounding international aid.
“Much controversy remains about aid effectiveness, and such debates cause doubt, and thus inaction for potential donors,” the researchers wrote.
Foundations that have a large staff of experts can give donors confidence that their contributions will have the desired effect, said Aaron Dorfman, president of the National Committee for Responsive Philanthropy. Mr. Dorman was not aware of the separate Gates nonprofit, but he said the fact that the foundation has long received outside gifts is well known.
“The surprising thing,” said Mr. Dorfman, “is more donors aren’t looking for this kind of free advice.”
