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Golden Gates

Money | Warren Buffett's billions will join in his friend's education, poverty, and health battles

Issue: "Unto the breach," July 22, 2006

When Warren Buffet last month pledged $37 billion to charity-$31 billion going to the Bill and Melinda Gates Foundation and $6 billion to the foundations of his wife and children-many business leaders, philanthropists, and journalists lauded the insurance tycoon's gift, which constitutes 85 percent of his total fortune. The Los Angeles Times called it "an astonishingly selfless act" and the Houston Chronicle extolled Buffett for setting "a beautiful example."

But not everyone offered such eager applause. Thomas Euteneuer, president of Human Life International, charged that Buffett's philanthropic agenda "aims at killing pre-born children not curing childhood disease, eliminating the poor not poverty, and destroying the developing world not aiding development." Euteneuer cited Buffett's past financial contributions to pro-abortion causes such as the Center for Reproductive Rights and the advancement of the drug RU-486, which terminates pregnancies in the days following conception.

Should Buffett's past giving pattern-reportedly pushed by his late wife, whose foundation promotes birth control and abortion-inspire distrust? That depends largely on the future intent of the Gates Foundation. Unlike most great philanthropists throughout the nation's history, Buffett may play only a minor role in the distribution of his money. John D. Rockefeller and Andrew Carnegie, whose respective lifetime giving in today's dollars totaled $7.6 billion and $4.1 billion, carefully governed their acts of charity-as has Gates in overseeing his $29 billion endowment.

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Buffett compared his decision against creating a new independent charity with his longtime investment strategy: back existing organizations with proven leadership. Gates is a personal friend, and the flow of money will continue only as long as he or his wife actively controls the foundation. Gates recently announced plans to step down from his daily duties at Microsoft to work on philanthropy full time.

Since 1994, the Gates Foundation has done little with reproductive issues. It has donated $34 million to Planned Parenthood over the years, but that amounts to less than one percent of the foundation's total giving of $10.8 billion. The overwhelming majority of those funds have supported U.S. public education reform, poverty fighting, and global health issues. The foundation spends $800 million annually in the fight against AIDS, malaria, and tuberculosis-a number equaling the World Health Organization's entire yearly budget.

The bulk of the foundation's money is still slated to continue addressing those three primary concerns. In education, the foundation has allocated $30 million to build charter school models and has delivered a horde of thousand and million-dollar grants to bolster public library systems. To help develop Third World economies, the foundation recently began disseminating small business loans to local entrepreneurs. Large grants on the global health front include a $75 million donation toward various vaccine projects, $28 million to reduce cervical cancer in developing countries, and $23 million to the University of North Carolina for medical research combating disease in Africa.

But significant questions remain. The Foundation's $200 million HIV prevention program in India claims responsibility for the distribution of 4.2 million in condoms-a devastating blow to abstinence-only advocates attempting to alter the prevailing free-sex culture among youth. In a recent article for Newsweek, Melinda Gates called abstinence and marital faithfulness insufficient preventative measures for millions of African women. Also, will the Gates Foundation include unborn human lives in one of its core value pronouncements: that "All lives-no matter where they are being led-have equal value"?

It's also interesting that Buffett, 75, elected to place the bulk of his fortune in Gates's capable hands rather than forfeit nearly half of it to estate taxes upon his death. Such avoidance of taxes that he ardently supports has prompted some conservatives to question the consistency of the billionaire's position: If charity work is better served in the private sector, why not emphasize that?

After all, if the Gates Foundation spends 10 percent of its resources every year-many foundations spend 5 percent-that will still amount to only $7 billion per year. The U.S. government spent $27 billion on foreign aid alone last year.

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