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What the Gates Divorce Means for the Gates Foundation

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The Bill and Melinda Gates Foundation began with an ambition that, by its high standards, seems almost curious today: to provide free Internet access to public libraries in the United States. As the scope of the founders’ goals grew, so did the foundation’s reach, until it achieved its current position as a pre-eminent private institution in global public health.

With 1,600 employees providing $ 5 billion in annual grants to 135 countries around the world, the Gates Foundation set a new standard for private philanthropy in the 21st century.

All of this was called into question on Monday when the world learned that the Foundation’s 27-year-old co-chairs filed for divorce in Washington state. Fellows and staff alike wondered what was going to happen and whether it might affect the mission.

The message from Seattle headquarters was clear: Bill and Melinda Gates may split up, but the Bill and Melinda Gates Foundation is not going anywhere. Her roles as co-chair and trustee are not changing and they will continue to set the agenda for the organization that bears her name. In an email on Monday, Gates Foundation executive director Mark Suzman assured staff that both Mr. and Mrs. Gates remain committed to the organization.

While Mr. Suzman noted that it was “obviously a difficult time of personal change” for the couple, he added that “Bill and Melinda specifically asked me to express their deep gratitude for everything they do each day, especially during the Covid-19 crisis. as well as for your support and understanding during this difficult time. “

The foundation’s $ 50 billion endowment is in a charitable foundation that is irrevocable. It can’t be removed or shared as a conjugal good, said Megan Tompkins-Stange, professor of public policy and philanthropist at the University of Michigan. However, she noted that there was no legal mandate preventing her from changing course.

“I think there might be changes,” she said. “But I don’t see it as a big asteroid landing in the field of philanthropy, as some of the exaggerations here have shown.”

Bill Gates was a fascinating object in the US almost from the moment he came on the scene as the founder of Microsoft. The prototypical computer genius became the entrepreneur, the nerdy foil for Steve Jobs and his black turtlenecks and artistic designs. He became the richest man in the world, and in the Justice Department’s 1998 antitrust case against Microsoft, he was heralded for better and for worse as the new John D. Rockefeller.

But in the decades since then, he has changed his image through the work he and Ms. Gates carried out together with the foundation and is best known for his generosity and not for his ruthlessness in business. The nearly $ 55 billion donated by the Gates Foundation also gave the couple instant access to heads of state and industry leaders.

Ms. Gates has her own growing profile, both through her work for the foundation and through her Pivotal Ventures company, which she has been using since 2015 to invest in causes related to women’s economic empowerment. Some observers noted that Ms. Gates had added her maiden name, French, to her Twitter profile.

The couple made their connections in response to the pandemic last year, calling on leaders like Chancellor Angela Merkel of Germany and Crown Prince Mohammed bin Zayed of Abu Dhabi to rally support for their plans. The foundation has so far allocated $ 1.75 billion for its Covid-19 response and has played a key role in shaping the global deal to introduce vaccines to poor countries.

This notoriety has also brought some control and the robust defense of intellectual property rights by Mr Gates – in this case specifically for vaccination patents – even in times of extreme crises, as well as the larger question of how unelected wealthy individuals can do such a thing on the global stage play an oversized role.

Updated

May 4, 2021, 3:12 p.m. ET

“In a democratic civil society, a couple’s personal choices shouldn’t lead university research centers, service providers, and nonprofits to truly question whether they can continue,” said Maribel Morey, founding director of the Miami Institute for the Social Sciences.

Ms. Gates filed for divorce in the King County, Washington Supreme Court on Monday. She called the marriage “irrevocably broken” and asked the court to dissolve it. On her file, Ms. Gates said they were already separated. She signed the form in Bellevue, Washington, and Mr. Gates signed his part in Palm Desert, California, near where they own a house.

The petition said the couple had a separation agreement. Filings with the Securities and Exchange Commission show that on Monday, millions of Canadian National Railway and AutoNation shares, valued at $ 1.8 billion in total, were transferred to Ms. Gates by Cascade Investment, a Mr. Gates holding company.

The $ 1.8 billion is a tremendous fortune in any way, less than 2 percent of the Forbes estimate of the total value of Mr. Gates, and is believed to be just a small step in the couple’s final division of the couple’s marital wealth. The transfers were previously reported by Bloomberg.

Before the news of the divorce broke, the Gates Foundation was in the midst of a change. The pandemic closed its Seattle headquarters despite top ranks of state health officials and the pharmaceutical industry working to find a response to the deadly, fast-spreading new coronavirus.

And as his public profile grew during the pandemic, so too did false conspiracy theories such as that the global vaccination effort provided cover for Mr. Gates to implant microchips to track people.

Then, in September, Mr. Gates’ father, Bill Gates Sr., also co-chair of the Foundation, died. The older Mr. Gates had initially taken the lead in his son’s charitable endeavors, while the younger Mr. Gates was still at the helm of Microsoft. Bill Gates Sr. was seen by many as the calm voice and moral compass within the organization, even after he had resigned in recent years.

The third trustee, billionaire Warren E. Buffett, turned 90 last year and has begun discussing succession plans at his Berkshire Hathaway firm.

Dr. Morey said the recent changes could also provide an opportunity to create a large, diverse body while increasing the visibility of the foundation’s decision-making. “Part of the concern stems from the lack of visibility into the day-to-day activities of the Gates Foundation,” she said.

Mr and Mrs Gates have had problems in their marriage for the past few years and even moments when it was on the verge of breakdown, according to people who were close to them. After making the break formal and legal, many in their orbit are trying to figure out what that means for the foundation. Some fear that Ms. Gates will put more effort into Pivotal Ventures, while Mr. Gates will spend even more time in his own private office, Gates Ventures. Others describe such fears as exaggerated.

“Bill and Melinda always had separate activities. They always spent time and spent time creating it, ”said Greg Ratliff, senior vice president at Rockefeller Philanthropy Advisors, who worked for the Gates Foundation for a decade. “It will continue to be a great, influential foundation, and each of them will be as influential as I think they were together.”

While it seems clear that the foundation will move forward with its tremendous resources, the question of the Gates fortune remains, which Forbes estimates at $ 124 billion. The divorce does not affect the money that has already been given to the foundation foundation, but the couple may spend less money on it over time than if they had stayed together.

“People rightly feel unmoved about the direction of the foundation,” said Ms. Tompkins-Stange of the University of Michigan. “There is a lot of confusion about how it might be in any divorce situation, but they seem determined to raise the foundation together.”

David Gelles contributed to the coverage.

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Robert Dunfee