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Allison Fine has written an articulate rant about what she calls "outrageous behavior" by the Gates Foundation.
On January 9th, the Los Angeles Times, after exhaustive research, published a story on the conflicts between some Gates grants for positive social change and their investments to make their endowment grow. For instance, the article explains that Gates is investing in an Italian oil company, Eni, that spews “250 toxic chemicals in the fumes and soot have long been linked to respiratory disease and cancer.†This is the same part of the world where the Gates Foundation grants millions of dollars on vaccinations to immunize children against deadly diseases like polio and measles.
She goes to describe the foundation's response to the story which was to initially say they'd review it and then to refute the story and would not be changing their investment policies. Allison quotes Patty Stonisfer the Foundation’s CEO, “It would be naive
to think that changing the foundation's investment policy could stop
the human suffering blamed on the practices of companies in which it
invests billions of dollars."
Allison goes on to describe why this behavoir is so appalling -- you can hear her screaming! She lays out four points why hte Foundation's decision not to do anything about its investment policies is specious and cowardly.
Given the Foundation’s resources and
ability to hire anyone from anywhere with the necessary expertise to
review their investments, it is mind boggling to believe that finding
socially conscious companies to invest in - to at least avoid companies
that are specifically and actively counteracting their grantmaking
efforts, would be too difficult or distracting for them. Even if the
criteria aren’t perfect initially, at least try to develop some
guidelines that don’t cancel out the intended good works of the
Foundation’s grants.
She goes on to say this:
This behavior by Gates is a naked illustration of the lack of accountability by foundations in general. Foundations have very few obligations but to spend 5% of their assets on average annually. As long as they don’t give it to specific political candidates, they can give to just about any nonprofit or for profit organization, or any individual. In addition to no accountability on the grantmaking side, the foundation is a self-described “passive investorâ€. This is an organization with three board members, all family members (plus Warren Buffet soon) and no shareholders. Their only constituents are grantees - and no less powerful group of people or organizations exist than those that depend on a foundation for funds. Think about this another way. A foundation with assets larger than 120 countries, can do just about whatever it wants with tax exempt funds - and no one can do a darn thing about it.
She ends with a great question:
What does it take for the foundation and nonprofit community to finally take a stand on appalling behavior like this?
Lucy Bernholtz of the Philanthropy 2173 Blog offers her recommendations on how to change philanthropy here.
Beth Kanter is the BlogHer contributing editor for Nonprofits and Social Change and blogs at Beth's Blog and Cambodia4kids
