Open letter to the Gates Foundation

16 January 2007

To: Ms Scott, Ms Stonesifer, Bill & Melinda, et al

Appalling. I can’t think of another word to describe your organisation’s misguided and arrogant response to public criticism regarding your investment practices. I have in the past admired the Gates Foundation, and having done some work in the area of paediatric ARVs, have had significant reason to applaud your work.

Having an antiquated, double-blind approach to charitable giving vs. investing is one thing. The Foundation could be forgiven for realising it’s behind the times, and for getting up to speed, post haste. But having and then defending, without apology, said approach, says a great deal about your organisation, and none of it good.

Whilst the public proclamations by Ms Stonesifer and Ms Scott (‘changes in our investment practices would have little or no impact on these issues’ and that employee agreement and consent on what makes for ethical investing is difficult to achieve) might not detract directly from the Foundation’s admirable programmatic work, they do cause several grievous problems for the Foundation, for the general public, and for the Foundation’s ‘license to operate’ in its broadest sense.

Firstly, if not for its public stance as a leader in fighting some of the most challenging issues in the world today, then at least for the sheer size of its corpus, the Foundation is, like it or not, a role model. And denigrating ethical investing – indeed, all but claiming it is too difficult to achieve employee consensus on the topic (Too difficult for intellectual giants the likes of Mr Gates? God help the rest of us who don’t have the brains or the budgets to sort it out) – sends a clear message to the general public that is likely to be repeated, amplified, and adopted by all too many individual and institutional investors. In short, your stance has provided a global advertisement against ethical investing. The rationale goes that someone is going to fund these companies’ activities, so why bother withholding funds on mere ethical grounds? History has, of course, shown us that collective action will never achieve results when the opponent is strong and well funded, so why bother? (see: Montgomery bus boycott)

Second, you have missed a truly great opportunity. The Gates Foundation is a celebrity in the foundation world, and receives celebrity-like levels of press coverage. You could have, through your own actions, inspired myriad individuals and institutions to follow suit with ethical investing (or at the least, negative screens to filter out the likes of Nestle) – and, importantly for your own brand and status, you would have gotten the credit for it. Tsk – time to hire a new PR agency.

Finally, and quite simply, the Gates Foundation is robbing Peter to pay Paul. Please tell me how Bill and Melinda have rationalised away the inherent ‘conflict of interest’ (see: COO Cheryl Scott’s statement on the Foundation website: http://www.gatesfoundation.org/AboutUs/Announcements/Announce-070109.htm) with Nestle. The conflict, to make it perfectly clear, is that the Foundation saves children’s lives with the right hand whilst using the left hand to invest in a company that is unscrupulous about those same children’s lives.

Surely through running and growing their software start-up the Foundation’s generous benefactors have learned a few simple lessons about business. That great businesses are those that align their mission, vision, and values on all fronts. That today’s democratic media trends (see: blogosphere) will not allow hypocritical, big-corporation, shut-up-and-don’t-ask-questions-because-we-know-best behaviour to go unnoticed, unchallenged, or unpunished. Or perhaps the Foundation has inherited too many of the tendencies of the corporation founded by Mr Gates.

Appalling.

Jessica Shortall

London, UK