Most Influential CEOs: Microsoft's Bill Gates Redefines "The Second Act"
His philanthropic foundation targets "problems the world wants to solve."
Most successful CEOs retire rich. They might join a few boards, take up a cause or two, network on the golf course, and accept a nice fee for speaking engagements.
And then there's Bill Gates.
It's been more than 10 years since Gates stepped down from the CEO post at Microsoft (MSFT), the software giant he founded after he dropped out of Harvard, but his name and face have far from disappeared from the headlines. Gates has deftly transformed himself from an executive who makes money to an executive who gives it away.
Gates, of course, is best known for helping launch the computer revolution in the early 1980s with the desktop operating system -- a groundbreaking software product that eventually became the ubiquitous Microsoft Windows. Time magazine named him one of the most influential people of the 20th century for this achievement. Even as Microsoft continues to dominate into the 21st century, it was largely Gates' philanthropic reach that landed him in the magazine's most influential list in 2004, 2005, and again 2006.
Gates now heads the Bill and Melinda Gates Foundation, which is controlled by Bill, his wife, and fellow philanthropic businessman Warren Buffett. The foundation's endowment reached $33.5 billion as of the end of 2009, and it says it has paid out nearly $23 billion in grants since its inception in 1994. Gates himself has donated billions of his own dollars to the foundation, which also raises money from other wealthy donors and charitable organizations.
The foundation has three grant-making funds: The Global Development Fund, which focuses on helping poverty-stricken regions to overcome hunger through agricultural and economic programs; The Global Health Fund, which issues grants aimed at combating the world's most serious health problems, such as AIDS and malaria; and The United States Program, which focuses on improving education.
Gates says he likes the challenge of finding creative solutions to problems that seemingly have none. "The nice thing about the foundation is, we're working on problems that the world wants to solve, like malaria," he recently told the Philadelphia Inquirer. "We can call in all the experts and get a diversity of opinion about, okay, which vaccine constructs should we go after, is this diagnostic worth doing? And the competitor is the disease, so that all the people who are smart about the disease are to some degree on the same side, working together."
When he's not promoting awareness of his foundation by releasing mosquitoes to attendees of the exclusive TED conference or extolling the virtues of nuclear power (Gates recently invested tens of millions of his own dollars into a nuclear reactor builder called TerraPower), the energetic entrepreneur still tends to Microsoft as chairman of the company. And his employees are following in his philanthropic footsteps: Last year, as charitable contributions fell due to the recession, Microsoft and its employees still donated $70 million to charity. The company's generous program pays workers $17 per hour for their volunteer time and matches up to $12,000 in donations per year per employee.
Of course, any institution with the size and influence of the Gates Foundation is bound to face critics, and no philanthropic organization can solve every problem.
In 2007, the Los Angeles Times published an exhaustive investigation into the investments the Gates Foundation has made in certain parts of the world that are in direct conflict with the benevolent efforts it makes in those regions:
The Gates Foundation has poured $218 million into polio and measles immunization and research worldwide, including in the Niger Delta. At the same time that the foundation is funding inoculations to protect health, The Times found, it has invested $423 million in Eni, Royal Dutch Shell, Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and Total of France -- the companies responsible for most of the flares blanketing the delta with pollution, beyond anything permitted in the United States or Europe.
After reviewing its investment policies, the foundation decided not to change them.
Another report from the Los Angeles Times in 2007 highlighted some of the unintended victims from the foundation's philanthropic efforts. In Africa, the foundation's focus on AIDS, malaria, and tuberculosis has diverted resources from more basic medical care, which has cost an untold number of lives. It has also "shortchanged basic needs such as nutrition and transportation, undermining the effectiveness of the foundation's grants," according to the paper.
Although the criticisms may hold weight, the better question to ask is: Is the world better off with the Gates Foundation? And it's hard to deny the answer is yes.
"The main thing I do is tell people I'm having fun giving money," Gates told the Inquirer. "And if you pick a cause and get involved, you can have a huge impact. And though the US is the most philanthropic country in the world, it could be a lot more philanthropic. It's nowhere near the limit."
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