Ever since Bill Gates opened the doors of his foundation in 2000, he has been promising to close them.
At first, he and then-wife and former co-chair Melinda French Gates pledged to do so within 50 years of their deaths. Over the years, that timeline has shrunk. In 2022, Gates told the audience at a Forbes philanthropy summit that the foundation would “run for another 25 years.”
But Thursday’s announcement by the Gates Foundation — rolled out with a New York Times Q&A, a press conference featuring CEO Mark Suzman and a blog post by Bill himself — gave an official end date for the biggest foundation on earth: December 31, 2045.
With the Trump administration slashing international aid to the bone and threatening investigations of mega-philanthropies, the timing makes sense. Whether one believes this announcement was motivated more by altruism (spurring more philanthropy when millions of lives are at risk from USAID cuts) or strategy (deflating the case for attacks by the administration), it’s no surprise that Gates would choose this moment to start getting specific about his foundation’s long-promised spend-down.
The New York Times has reported that Gates and his staff are flummoxed and unnerved by the Trump administration’s moves, and this announcement lets them seize the narrative, at least for the moment. A round of press coverage that reminds the public of the Gates Foundation’s role as the top global health and development philanthropy will help its cause, especially after months of terse, noncommittal reactions from the foundation as Trump rampaged through everything it has spent years and billions of dollars building.
But the thinking behind the other detail that Gates shared on Thursday is harder to parse.
As headlines in the Times and Chronicle of Philanthropy trumpeted, Gates and Suzman say the foundation will give away $200 billion over the next 20 years. That’s a vast sum of money, to put it mildly, and unprecedented in philanthropy. It also appears to be an epic undercount, or evidence in plain sight that this is not the last word on the Gates Foundation’s long-term trajectory.
Bill Gates’ foundation, as of last year, had assets of $77 billion and, in his announcement, the Microsoft cofounder listed his own wealth at $108 billion, writing, “I will give away virtually all of my wealth through the Gates foundation over the next 20 years.” So the amount on the table is plus or minus $185 billion.
But that sum will keep growing. Over the past five years, the foundation has earned an average return of 9%, according to FoundationMark’s estimates. And the operation will also keep spending. The Gates Foundation previously announced plans to increase its annual spend to $9 billion by 2026, a total Bill Gates and Suzman confirmed this week. So how do these numbers stack up?
Given those assets and continued gains at that rate, the grantmaker could set a budget of nearly $17 billion a year for the next two decades — a total spend of $340 billion — and not even touch the principal. Even if its gains are a more ordinary 5.7% — i.e., the S&P’s average returns over the past 20 years, adjusted for inflation — the foundation’s budget could average $10.5 billion a year, narrowly topping its $200 billion projection – again, without even a penny from its endowment.
These numbers don’t take into account ongoing infusions of wealth every year from Warren Buffett, currently 94 years old, which have lately amounted to several billion a year, must be spent at once, and will continue until his death.
The conclusion is the same however you crunch the numbers. “If you get any kind of return, you’re going to blow through the $200 billion,” said John Seitz, founder and CEO of FoundationMark. “If they’re only going to fund $10 billion [a year], they’re going to end up having a lot of money in 2045.”
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So why have Gates and his team chosen to present such a lowball figure? (Yes, in this case, $200 billion is “lowball!”) I have no idea. But I have theories.
For one thing, it represents an amount the foundation can hit even in the most dire of economic scenarios. Yet it would take a Great Depression-level catastrophe to negate the growth of Gates’ wealth and the foundation’s endowment to that extent.
Leading with such a definitive total also obscures the apparent need for the foundation’s spending to double or triple from where it is today to actually empty the safe.
On the one hand, an unprecedented torrent of money on that scale would save many lives as the U.S. and other governments scale down or abandon their aid commitments. This is in some ways a humbling moment for the foundation, with the decimation of U.S. foreign aid shredding some of its hard-won gains. Ramping up its grantmaking to historical highs will help offset the damage.
On the other hand, though, acknowledging the need to balloon its annual spend to that level would force an uncomfortable reckoning with the reality that the Gates Foundation’s already sovereign-level power and influence will have to massively expand to fulfill this pledge. And that growth will come amid an international aid vacuum due to the departure of U.S. government dollars. (Doubling or tripling its spend would put Gates, by itself, well on the way to actually covering the gap on USAID in dollar terms.) Moreover, it would also exacerbate the worldwide rush that is sure to happen anyway as grantseekers seek to position themselves to benefit from the final years of Gates bucks.
Granted, Gates’ announcement does leave the door open to more spending. He wrote that the total amount he gives away could be “more than $200 billion,” a phrase that is technically inclusive of a sum that might easily reach two times that amount, if not more. Then again, during Thursday’s press conference, Suzman said, “We will now be in the $9 to $10 billion range for the next 20 years.” At that rate, the foundation’s assets might well grow, not shrink — i.e., it’s doubtful there would ever be a spenddown. So which is it? Should we doubt Suzman, or Gates?
The foundation seems to want the message to be: We’re going away, and we’re not getting any bigger. But those two promises are incompatible.
Then again, there are other paths. The foundation could keep its regular spending at $9 billion to $10 billion a year, but give multibillion-dollar endowment awards to favored organizations, such as the World Health Organization or the GAVI vaccine alliance, and walk away. As Seitz put it: “You don’t have to ask us for money. Here’s all the money.”
Nor is this the only aspect to this announcement. Gates laid out three overarching goals for the next 20 years, which can be roughly summarized as: end preventable deaths, eliminate deadly infectious diseases, and extend prosperity to hundreds of millions more people. This largely feels like a continuation of its current mission, not anything particularly new.
The goals also do not seem to spell the end for other grantmaking. Asked about its climate funding, Suzman did not suggest the foundation would back off its support for smallholder farmers and agricultural development. “Our lens will always be looking through our three priorities and then seeing where is the best way we can adapt our core priorities back to wider challenges like climate change,” he said.
In any case, these are admirable goals. It is also admirable that Gates, one of the world’s richest people, has so publicly and definitively committed to spending “virtually all” of his wealth. One might wish for a system in which no one person held so much power. But in the system we have, Gates and Warren Buffett stand virtually alone among centibillionaires in how much of their vast fortunes they have already given away — and in their push to recruit other billionaires to give away their wealth.
There is, at least in modern philanthropy, only one example of a multibillionaire who has spent to virtual zero in his lifetime: Chuck Feeney, who Gates calls a “big hero of mine.” But you also do not have to look far to find an example of a billionaire who didn’t quite get there. Another one of this era’s most generous megadonors, George Soros, long promised to spend all his wealth during his lifetime, but despite getting billions out the door, ultimately opted for perpetuity. (Incidentally, another centibillionaire with a large foundation but far less of a giving record, Elon Musk, got a well-deserved swipe from Gates in the Times interview.)
The question now is whether Gates will turn out to be a Feeney or a Soros. This week’s announcement is his firmest commitment yet to spending down, but we may not know the real answer for 20 years.
