Big Philanthropy June 26, 2006Posted by federalist in Economic Policy.
Thanks to Warren Buffet’s commitment, the Gates Foundation now has more than $60 billion at its disposal. With resources of that magnitude under the complete control of a single individual, projects can be undertaken that are simply impossible to pull together when they require the resources and consent of large groups.
Yet while it has clearly identified its priorities (mostly in the fields of global health and education) the Gates Foundation often appears to lack focus. For example, this year it has made more than 200 separate grants, some for as little as $1,000. It has devoted more than a billion dollars to numerous educational scholarships. These are all wonderful acts of charity, but their piecemeal nature squanders the benefits that could accrue from focusing massive resources on singular “moon-shot” projects.
For example, whether one philanthropist spends $1 billion endowing scholarships or one thousand donors each spend $1 million, the net benefit is roughly the same. But the billionaire philanthropist could fund basic research and development efforts – say, in the fields of vaccines (which the Gates Foundation does) or alternative energy – that would never come together if they had to wait for the private donations of thousands of individuals to even get off the ground, or if they were subject to the political turbulence of government funding.
It is wonderful that these private fortunes are being devoted to charitable endeavors instead of fleets of solid-gold yachts. But big philanthropy can make even greater contributions to humanity by focusing exclusively on the infrastructure, development, and research projects with such high barriers to entry that no one else can attempt them.