Bill & Melinda Gates Foundation (BMGF or the Gates Foundation) is one of the largest private foundations in the world, founded by Bill and Melinda Gates. It was launched in 2000 and is said to be the largest transparently operated private foundation in the world. It is "driven by the interests and passions of the Gates family". The primary aims of the foundation are, globally, to enhance healthcare and reduce extreme poverty, and in America, to expand educational opportunities and access to information technology. The foundation, based in Seattle, Washington, is controlled by its three trustees: Bill Gates, Melinda Gates and Warren Buffett. Other principal officers include Co-Chair William H. Gates, Sr. and Chief Executive Officer Susan Desmond-Hellmann.
It had an endowment of US$38.3 billion as of 30 June 2013[update]. The scale of the foundation and the way it seeks to apply business techniques to giving makes it one of the leaders in the philanthrocapitalism revolution in global philanthropy, though the foundation itself notes that the philanthropic role has limitations. In 2007, its founders were ranked as the second most generous philanthropists in America, and Warren Buffett the first. As of May 16, 2013, Bill Gates had donated US$28 billion to the foundation.
In 1997, the foundation was formed as the William H. Gates Foundation with an initial stock gift of US$94 million. The foundation was renamed the Bill & Melinda Gates Foundation after a merger with the Gates Learning Foundation in 2000 when the Gates gave an additional US$126 million. During the foundation's following years, funding grew to US$2 billion. On June 15, 2006, Gates announced his plans to transition out of a day-to-day role with Microsoft, effective July 31, 2008, to allow him to devote more time to working with the foundation.
In April 2010, Gates was invited to visit and speak at the Massachusetts Institute of Technology where he asked the students to take on the hard problems of the world in their futures. He also explained the nature and philosophy of his philanthropic endeavors.
In 2010, The Foundation's founders started The Commission on Education of Health Professionals for the 21st Century, entitled "Transforming education to strengthen health systems in an interdependent world."
On June 25, 2006, Warren Buffett (then the world's richest person, estimated worth of US$62 billion as of April 16, 2008) pledged to give the foundation approximately 10 million Berkshire Hathaway Class B shares spread over multiple years through annual contributions, with the first year's donation of 500,000 shares being worth approximately US$1.5 billion. Buffett set conditions so that these contributions do not simply increase the foundation's endowment, but effectively work as a matching contribution, doubling the Foundation's annual giving: "Buffett's gift came with three conditions for the Gates foundation: Bill or Melinda Gates must be alive and active in its administration; it must continue to qualify as a charity; and each year it must give away an amount equal to the previous year's Berkshire gift, plus an additional amount equal to 5 percent of net assets. Buffett gave the foundation two years to abide by the third requirement." The Gates Foundation received 5% (500,000) of the shares in July 2006 and will receive 5% of the remaining earmarked shares in the July of each following year (475,000 in 2007, 451,250 in 2008). In July 2013, Buffet announced another donation of his company's Class B, this time in the amount worth $2 billion, is going to the Bill and Melinda Gates Foundation.
To maintain its status as a charitable foundation, the Bill and Melinda Gates Foundation must donate funds equal to at least 5 percent of its assets each year. As of April 2014, the Foundation is organized into four program areas under chief executive officer Susan Desmond-Hellmann who "sets strategic priorities, monitors results, and facilitates relationships with key partners":
The Foundation maintains an online database of grants on its website and, as of April 6, 2014, the The National Alliance to End Homelessness, Inc. was the latest grantee, with an amount of US$100,000 donated under the US Program.
The Foundation explains on its website that its trustees divided the organization into two entities: the Bill & Melinda Gates Foundation (foundation) and the Bill & Melinda Gates Foundation Trust (trust). The foundation section, based in Seattle, US, "focuses on improving health and alleviating extreme poverty," and its trustees are Bill and Melinda Gates and Warren Buffett. The trust section manages "the investment assets and transfer proceeds to the foundation as necessary to achieve the foundation’s charitable goals"—it holds the assets of Bill and Melinda Gates, who are the sole trustees, and receives contributions from Buffett.
The Foundation posts its audited financial statements and 990-PF forms on the "Financials" section of its website as they become available. At the end of 2012, the Foundation registered a cash sum of US$4,998,000, down from US$10,810,000 at the end of 2011. Unrestricted net assets at the end of 2012 were worth US$31,950,613,000, while total assets were worth US$37,176,777,000.
Bill & Melinda Gates Foundation Trust Investments
Christopher Elias leads the Foundation's efforts to combat extreme poverty through grants as president of the Global Development Program.
In March 2006, the Foundation announced a US$5 million grant for the International Justice Mission (IJM), a human rights organization based in Washington, D.C., US to work in the area of sex trafficking. The official announcement explained that the grant would allow the IJM to "create a replicable model for combating sex trafficking and slavery" that would involve the opening of an office in a region with high rates of sex trafficking, following research. The office was opened for three years for the following purposes: "conducting undercover investigations, training law enforcement, rescuing victims, ensuring appropriate aftercare, and seeking perpetrator accountability".
The IJM used the grant money to found "Project Lantern" and established an office in the Philippines city of Cebu. In 2010 the results of the project were published, in which the IJM stated that Project Lantern had led to "an increase in law enforcement activity in sex trafficking cases, an increase in commitment to resolving sex trafficking cases among law enforcement officers trained through the project, and an increase in services – like shelter, counseling and career training – provided to trafficking survivors". At the time that the results were released, the IJM was exploring opportunities to replicate the model in other regions.
Financial services for the poor
Alliance for Financial Inclusion (AFI): A US$35 million grant for the AFI supports a coalition of countries from the developing world to create savings accounts, insurance, and other financial services that are made available to people living on less than $2 per day.
Pro Mujer: A five-year US$3.1 million grant to Pro Mujer—a microfinance network in Latin America combining financial services with healthcare for the poorest women entrepreneurs—will be used to research new opportunities for the poorest segment of the Latin American microfinance market.
Grameen Foundation: A US$1.5 million grant allows Grameen Foundation to approve more microloans that support Grameen's goal of helping five million additional families, and successfully freeing 50 percent of those families from poverty within five years.
International Rice Research Institute: Between November 2007 and October 2010, the Gates Foundation offered US$19.9 million to the International Rice Research Institute. The goal of the aid was to support the increasing world demand for rice. The Bill and Melinda Gates Foundation claims: “To keep up with worldwide demand, the production of rice will have to increase by about 70 percent in the next two decades.”
Alliance for a Green Revolution in Africa (AGRA): The Gates Foundation has partnered with the Rockefeller Foundation to enhance agricultural science and small-farm productivity in Africa, building on the Green Revolution that the Rockefeller Foundation spurred in the 1940s and 1960s. The Gates Foundation has made an initial US$100 million investment in this effort, to which the Rockefeller Foundation has contributed US$50 million. Critics allege that the Foundation has a preference to make grants that benefit multinational agribusiness, such as Monsanto, that do not take into account numerous local needs in Africa.
Global Special Initiatives
The Foundation's Special Initiatives include responses to catastrophes as well as learning grants that are used to experiment with new areas of giving. Currently, the Foundation is exploring water, hygiene, and sanitation as a new focus within Global Development.
Water, Hygiene, and Sanitation: Improved sanitation in the developing world is a global need, but a neglected priority. The Millennium Development Goals (MDGs) include a sanitation target to reach 75 percent coverage of improved sanitation by 2015, but it remains one of the most difficult-to-achieve MDG goals. According to the "Millennium Development Goals Report 2012", 2.5 billion people do not have access to improved sanitation and nearly 1.1 billion resort to open defecation (MDG Report, 2012). Even in urban areas, more than 2 billion people in the developing world lack access to services and infrastructure for the safe disposal of human waste (The World Bank, 2003).
Open defecation poses significant health and environmental risks, and creates vulnerability, particularly for women and children who are exposed to a loss of dignity, abuse, or harassment while defecating in the open. Globally, poor sanitation contributes to 1.5 million child deaths each year from diarrheal disease; in India alone, diarrhea kills one child per minute (UNICEF/WHO, 2009). Diarrhea is also a major cause of death for children and chronic diarrhea affects a child's development by impeding their health and nutrition, and hindering vaccine absorption. Poverty, ill health, and an overall poor quality of life are concurrent factors for such people.
Toilet developed by RTI International is based on electrochemical disinfection and solid waste combustion
Reinvent the Toilet Challenge: In 2011, the Foundation launched a program to promote the development of innovations in toilet design to benefit the 2.5 billion people that do not have access to safe and effective sanitation. The "Reinvent the Toilet Challenge" (RTTC) targets the need for ground-breaking improvements in toilet design and fecal sludge management to close the urban sanitation gap. Since its launch, 15 teams have received grants to develop innovative on-site and off-site waste treatment solutions for the urban poor. The RTTC is focused on reinventing the flush toilet, a breakthrough public health invention that represents the first substantial improvement since the first flush toilet patent was issued in 1775.
The Foundation has called on grantees to design a standalone toilet unit—without piped-in water, a sewer connection, or outside electricity— with a facility cost target of less than five cents per person, per day. The RTTC is also working to improve waste handling from collection and treatment. Funded by the Foundation, scientists at University of Colorado have developed a composting toilet that uses solar heat to treat the fecal matter and produce char. High-tech toilets for tackling the growing public health problem of human waste are gaining increasing attention. But, low-tech solutions may be more practical in poor countries as the green toilet.
Global Health Division
Since 2011, the President of the Global Health Program is Trevor Mundel.
The Global Health Program's significant grants include:
HIV Research: The Foundation donated a total of US$287 million to various HIV/AIDS researchers. The money was split between 16 different research teams across the world, on the condition that the findings are shared amongst the teams.
Cheaper high-tech tuberculosis (TB) test: In August 2012, the Foundation, in partnership with PEPFAR (United States President’s Emergency Plan for AIDS Relief), USAID (United States Agency for International Development) and UNITAID (an international drug purchasing facility hosted by WHO), announced they had finalized an agreement to reduce the cost of a commercial TB test (Cepheid’s Xpert MTB/RIF run on the GeneXpert platform), from US$16.86 to US$9.98. This test can take the place of smear microscopy, a technique first developed in the 1880s by Robert Koch. Smear microscopy often does not show TB infection in persons who are also co-infected with HIV, whereas the GeneXpert system can show TB in the co-infected patient. In addition, the system can show whether the particular TB strain is resistant to the bactericidal antibiotic rifampicin, a widely accepted indicator of the presence of multidrug resistant tuberculosis.
Visceral leishmaniasis (VL) research: The Foundation awarded the Hebrew University of Jerusalem's Kuvin Center for the Study of Infectious and Tropical Diseases a US$5 million grant in 2009 for research into visceral leishmaniasis (VL), an emerging parasitic disease in Ethiopia, Africa, where it is frequently associated with HIV/AIDS, and is a leading cause of adult illness and death. The project, a collaborative effort with Addis Ababa University, will gather data for analysis—to identify the weak links in the transmission cycle—and devise methods for control of the disease. In 2005 the Foundation provided a US$30 million grant to The Institute for OneWorld Health to support the nonprofit pharmaceutical company's VL work in the rural communities of India, Bangladesh and Nepal. By September 2006, the company had received approval from the Indian body Drug-Controller General of India (DCGI) for the Paromomycin Intramuscular (IM) Injection, a drug that provides an effective cure for VL following a 21-day course. In 2010 Raj Shankar Ghosh, the Regional Director for the South Asia Institute for OneWorld Health, explained that the Foundation funded "the majority of our work" in the development of the drug.
Next-Generation Condom: The foundation gave US$100,000 to 11 applicants in November 2013 to develop an improved condom; that is, one that "significantly preserves or enhances pleasure, in order to improve uptake and regular use," according to the Gates Foundation's Grand Challenges in Global Health website. Further grants of up to US$1 million will be given to projects that are successful.
Neglected tropical diseases (NTDs): Alongside WHO, the governments of the United States, United Kingdom and United Arab Emirates, and the World Bank, the Foundation endorsed the London Declaration on Neglected Tropical Diseases, "to eradicate, eliminate and intensify control of 17 selected diseases by 2015 and 2020," at a meeting on January 30, 2012, held at the Royal College of Physicians in London, UK. Gates was the principal organizer responsible for bringing together the heads of 13 of the world's largest pharmaceutical companies and the Foundation's monetary commitment to the Declaration was US$363 million over five years. On April 3, 2014, the two-year anniversary of the Declaration, Gates attended a meeting in Paris, France, at which participants reviewed the progress that had been made against 10 neglected tropical diseases (NTDs). The Foundation committed a further US$50 million, together with US$50 million from the Children's Investment Fund Foundation and US$120 million from the World Bank.
United States Division
Under President Allan Golston, the United States Program has made grants such as the following:
In 1997, the charity introduced a U.S. Libraries initiative with a goal of "ensuring that if you can get to a public library, you can reach the internet". Only 35% of the world’s population has access to the Internet. The foundation has given grants, installed computers and software, and provided training and technical support in partnership with public libraries nationwide in an effort to increase access and knowledge. Helping provide access and training for these resources, this foundation helps move public libraries into the digital age.
Smaller Schools: The Gates foundation claims one in five students is unable to read and grasp the contents of what they read, and African American and Latino students are graduating high school with the skills of a middle school student. The Bill and Melinda Gates foundation has invested more than US$250 million in grants to create new small schools, reduce student-to-teacher ratios, and to divide up large high schools through the schools-within-a-school model.
Cornell University: Faculty of Computing and Information Science received US$25 million from the Foundation for a new Information Science building, which will be named the "Bill and Melinda Gates Hall". The total cost of the building is expected to be US$60 million. Construction began in March 2012 and officially opened for business in January 2014.
Gates Millennium Scholars: Administered by the United Negro College Fund, the foundation donated US$1.5 billion for scholarships to high achieving minority students.
NewSchools Venture Fund: The Foundation contributed US$30 million to help NewSchools to manage more charter schools, which aim to prepare students in historically underserved areas for college and careers.
Teaching Channel: The Bill and Melinda Gates Foundation announced in September 2011 a US$3.5 million initiative to launch a multi-platform service delivering professional development videos for teachers over the Internet, public television, cable and other digital outlets. To date, over 500,000 teachers and educators have joined the community to share ideas, lesson plans and teaching methods.
The Texas High School Project: The project was set out to increase and improve high school graduation rates across Texas. The foundation committed US$84.6 million to the project beginning in 2003. The project focuses its efforts on high-need schools and districts statewide, with an emphasis on urban areas and the Texas-Mexico border.
University Scholars Program: Donated US$20 million in 1998 to endow a scholarship program at Melinda Gates' alma mater, Duke University. The program provides full scholarships to about 10 members of each undergraduate class and one member in each class in each of the professional schools (schools of medicine, business, law, divinity, environment, nursing, and public policy), as well as to students in the Graduate School pursuing doctoral degrees in any discipline. Graduate and professional school scholars serve as mentors to the undergraduate scholars, who are chosen on the basis of financial need and potential for interdisciplinary academic interests. Scholars are chosen each spring from new applicants to Duke University's undergraduate, graduate, and professional school programs. The program features seminars to bring these scholars together for interdisciplinary discussions and an annual spring symposium organized by the scholars.
Washington State Achievers Scholarship: The Washington State Achievers program encourages schools to create cultures of high academic achievement while providing scholarship support to select college-bound students.
William H. Gates Public Service Law Program: This program awards five full scholarships annually to the University of WashingtonSchool of Law. Scholars commit to working in relatively low-paying public service legal positions for at least the first five years following graduation.
Discovery Institute: Donated US$1 million in 2000 to the Discovery Institute and pledged US$9.35 million over 10 years in 2003, including US$50,000 of Bruce Chapman's US$141,000 annual salary. According to a Gates Foundation grant maker, this grant is "exclusive to the Cascadia project" on regional transportation, and it may not be used for the Institute's other activities, including promotion of intelligent design.
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In October 2006 the Bill & Melinda Gates Foundation was split into two entities: the Bill & Melinda Gates Foundation Trust, which manages the endowment assets and the Bill & Melinda Gates Foundation, which "... conducts all operations and grantmaking work, and it is the entity from which all grants are made". Also announced was the decision to "... spend all of [the Trust's] resources within 20 years after Bill's and Melinda's deaths". This would close the Bill & Melinda Gates Foundation Trust and effectively end the Bill & Melinda Gates Foundation. In the same announcement it was reiterated that Warren Buffett "... has stipulated that the proceeds from the Berkshire Hathaway shares he still owns at death are to be used for philanthropic purposes within 10 years after his estate has been settled".
The plan to close the Foundation Trust is in contrast to most large charitable foundations that have no set closure date. This is intended to lower administrative costs over the years of the Foundation Trust's life and ensure that the Foundation Trust not fall into a situation where the vast majority of its expenditures are on administrative costs, including salaries, with only token amounts contributed to charitable causes.
The foundation trust invests undistributed assets, with the exclusive goal of maximizing the return on investment. As a result, its investments include companies that have been criticized for worsening poverty in the same developing countries where the Foundation is attempting to relieve poverty. These include companies that pollute heavily and pharmaceutical companies that do not sell into the developing world. In response to press criticism, the foundation announced in 2007 a review of its investments to assess social responsibility. It subsequently cancelled the review and stood by its policy of investing for maximum return, while using voting rights to influence company practices.
Diversion of health care resources
The Foundation has donated millions of dollars to help sufferers of AIDS, tuberculosis and malaria. However, investigations in 2007 from Foreign Affairs and Los Angeles Times claimed there were three major problems with the foundation's allocation of aid. First, "by pouring most contributions into the fight against such high-profile killers as AIDS, Gates guarantees have increased the demand for specially trained, higher-paid clinicians, diverting staff from basic care". This form of "brain drain", pulls away trained staff from children and those suffering from other common killers. Second, "the focus on a few diseases has shortchanged basic needs such as nutrition and transportation". Finally, "Gates-funded vaccination programs have instructed caregivers to ignore – even discourage patients from discussing – ailments that the vaccinations cannot prevent".
The public school reform program of the Gates Foundation has come under criticism by education professionals, parents, and researchers for promoting reforms that they see as undermining public education. The reforms include closing neighborhood schools in favor of privately run charter schools; using standardized test scores extensively to evaluate students, teachers, and schools; and merit pay for teachers based on test scores. Critics also believe that the Gates Foundation exerts too much influence over public education policy without being accountable to voters or tax payers. 
A 2011 survey of grantees found that many believed the foundation did not make its goals and strategies clear and sometimes did not understand those of the grantees; that the foundation's decision- and grantmaking procedures were too opaque; and that its communications could be more consistent and responsive. The foundation's response was to improve the clarity of its explanations, make "orientation calls" to grantees upon awarding grants, tell grantees who their foundation contact is, give timely feedback when they receive a grantee report, and establish a way for grantees to provide anonymous or attributed feedback to the foundation. The foundation also launched a podcast series.
Melinda Gates has stated that the foundation "has decided not to fund abortion". In response to questions about this decision, Gates stated in a June 2014 blog post that she "struggle[s] with the issue" and that "the emotional and personal debate about abortion is threatening to get in the way of the lifesaving consensus regarding basic family planning". Up to 2013, the Bill & Melinda Gates Foundation provided $71 million to Planned Parenthood, the primary US abortion provider, and affiliated organizations.
^Guo, Jeff, "In interview, Gates describes philanthropic journey", The Tech, Volume 130, Issue 21, April 23, 2010. (video & transcript). "After he spoke at Kresge Auditorium, Bill Gates sat down with The Tech to talk more about his college tour, his philanthropy, and the philosophy behind it."