Why you should care

Because with great (financial) power comes great responsibility.

If the Bill & Melinda Gates Foundation were a country, it would be the 10th largest donor of development aid in the world. With an endowment of around $40 billion from primary donors Bill Gates and Warren Buffett, and an annual spend of about one-tenth of that total sum, the Gates Foundation (and dozens of other multibillion-dollar philanthropic organizations like the Ford Foundation and the Wellcome Trust) has been able to fund marvelous interventions, from malaria control to the near eradication of polio.

All of this is undeniably carried out with the very noblest of intentions, but with such enormous financial resources — and the resultant power to enact huge change — how do we know that these funds are being spent in the best possible way to maximize the positive impact?

All spending decisions come with trade-offs. The Gates Foundation, for example, has poured resources into polio eradication, which has been criticized by some because of how expensive it is to combat the last few cases in hard-to-reach areas. Perhaps those funds could be better spent elsewhere? “Typically we would think that’s a public health decision that should be decided by democratically elected governments,” says Jennifer Rubenstein, professor of political theory at the University of Virginia. “The only reason that the Gates Foundation is getting to make it instead is because Bill Gates has a lot of money.”

No matter what you do when you give money, you are exercising power. You are empowering one group over another.

Jennifer Rubenstein, professor, University of Virginia

So here’s a thought: Perhaps a governmental body, let’s say a wing of the United Nations, should oversee all large-scale philanthropic spending to help provide a level of accountability to affected countries and communities. A lot is at stake — the lives and livelihoods of billions of people — so we should do everything we can to ensure that charitable resources are invested wisely, and that the well-intentioned whims of wealthy individuals and foundations are not assumed alone to be enough.

Of course, mega-philanthropists don’t just spray their money willy-nilly. Though some are better than others, most use a variety of advanced metrics to determine where to spend money, says Michelle Hutchinson from the Institute for Effective Altruism at Oxford University. It’s not just counting the number of potential people affected or lives saved, but nuanced measures of burden like the “disability-adjusted life year” measure, and combining that with judgments of which problems are being overlooked and where the greatest relative impact can be made. But these are imperfect guides: “We are big believers in metrics,” says Gates Foundation CEO Sue Desmond-Hellmann, “but we are also realists who know that some things, like reducing poverty, are difficult to measure precisely, especially in the short term.” And overreliance on quantifiable impacts leads to a bias in favor of “technocratic interventions” that bypass politics, says Rubenstein, even though many development economists think that political institutions may be one of the leading factors behind extreme poverty.

But foundations do inevitably meddle in politics — the Gates Foundation has previously funded Planned Parenthood and charter school development in the U.S. According to some, though, all spending is political: “No matter what you do when you give money, you are exercising power,” says Rubenstein, “you are empowering one group over another; you are picking this particular kind of intervention.” Which brings us back to the crucial issue — accountability.

Of course, in a free world people have the right to spend their own money however they see fit, right? Well, yes, but what about the rights of the billions of people in the developing world whose lives depend on these spending decisions, with no say at all over how they’re enacted? Admittedly, UN oversight of funds may not be a perfect solution either — it might just “create a bunch of bureaucracy,” which wouldn’t help anyone, says Hutchinson, who suggests an official advice agency staffed by experts instead.

“Having an influential voice comes with responsibility,” the Gates Foundation’s Desmond-Hellmann writes to OZY. In any other area of civil society, people demand something more from those wielding power — accountability to voters in politics, or to shareholders in business. Maybe it’s time to check the financial power of billionaire philanthropists too.

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