« Scraper | Main | "Revolutionary by nature" » Gates Foundation followup: social responsibility is naiveMy January 8 post on "The Gates Foundation's Contradictory Investments" was originally planned for Worldchanging; I posted it here instead because Alex Steffen was posting a longer feature that spoke to the same subject – "Transforming Philanthropy." In his post, Alex suggested three rules for big philantropy:
After the initial fuss about the Gates Foundation's contradictory investments, the foundation initially suggested it would consider a policy change, and reassess its investments. However Foundation CEO Patty Stonesifer followed with a letter to the LA Times saying The stories you told of people who are suffering touched us all. But it is naive to suggest that an individual stockholder can stop that suffering. Changes in our investment practices would have little or no impact on these issues. While shareholder activism has worthwhile goals, we believe a much more direct way to help people is by making grants and working with other donors to improve health, reduce poverty and strengthen education. She points to a note on investment philosophy by COO Cheryl Scott, posted at the Gates Foundation site: Bill and Melinda oversee the investment of the foundation’s endowment. In giving guidance to the investment managers, they have chosen not to get involved in ranking companies based upon factors such as their lending policies or environmental record. There are dozens of factors that could be considered, almost all of which are outside the foundation’s areas of expertise. The issues involved are quite complex. Should a company get a failing score if 1 percent of its output is used in cigarette packaging, or if 1 percent of its stores’ sales are in tobacco? How far back in time do you evaluate behavior? If a company disagrees with your assessment, what appeals process is available? Which social and political issues should be on the list? Many of the companies mentioned in the Los Angeles Times articles, such as Ford, Kraft, Fannie Mae, Nestle, and General Electric, do a lot of work that some people like, as well as work that some people do not like. Some activities might even be viewed positively by some people and negatively by others. There are many important issues that the foundation does not focus on, such as lending laws and environmental regulation. The organizations that do work on those issues—together with governments and all of their legislative, executive, and judicial resources—play a critical role. We do not want to duplicate that role. Bill and Melinda have prioritized our program work over ranking companies and issues because it allows us to have the greatest impact for the most people. They also believe there would be much room for error and confusion in such judgments, and that divesting from these companies would not have an effect commensurate with the resources we would divert to this activity. The foundation’s not owning a tiny percentage of a company or selling it to another investor would often go unnoticed, and Bill and Melinda would not be comfortable delegating this kind of judgment. No hollistic assessment, at least for now. jon posted this at 9:34 AM |
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