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Things you might have missed in 2013: The Gates Foundation's Hypocritical Investments http://www.motherjones.com/environment/2013/12/gates-foundations-24-most

Things you might have missed in 2013: The Gates Foundation's Hypocritical Investments http://www.motherjones.com/environment/2013/12/gates-foundations-24-most-egregious-investments http://www.motherjones.com/environment/2013/12/gates-foundat...

salient 13y ago
Seems like the Gates Foundation is mostly a front for a profit-seeking venture.
- tptacek 13y ago
  Yeah, Bill Gates has sure pulled the wool over all our eyes on this one.
- benched 13y ago
  Please explain what sense it would make for a gargantuan liquid fund not to try to invest profitably?
- icegreentea 13y ago
  If you read the tax return, you'll see that your statement is literally not true.
- jblow 13y ago
  It is the other way around. If you are doing effective altruism, you want to make sure you have money coming in that you can be altruistic with. The bit about Walmart was especially badly done. If the author of this article thinks Walmart employees are poor on the same scale as the poor that the foundation targets, he really has no clue about world poverty. If the minimum standard of living throughout the world were equal to that of a typical Walmart employee, the world would be tremendously better off.
  - rbanffy 13y ago
    So, your argument is that it's right to make Walmart employees poor in order to maximize profits because they are not nearly as poor as the poorest people in the world? If there is something poor here, it's the excuse.
    - bluekitten 13y ago
      How does buying a lot of Walmart shares make Walmart employees poor? I am frankly baffled here. Walmart buyers should probably get more blame here. Have you ever spared a thought about who made the electronics you own and under what conditions?
      - rbanffy 13y ago
        When you buy shares you send the signal the company is doing the right thing. It says you support the company and its business practices and, ultimately, enables the company to continue them. If everybody refuses to buy their shares, their stock will plummet and prompt changes. As for my electronics (and consumables), yes, I try to avoid manufacturers and brands that are associated with poor working practices. Nice try attacking me to try to disprove my argument against the Gates foundation.
tptacek 13y ago
Oh for fuck's sake. How do you think a double-digit-billion endowment gets managed? By Bill Gates sitting around with a copy of the Wall Street Journal and a cup of coffee, picking stocks? No. The money manager roles for the Gates Foundation are extremely serious, and extremely high-status. The guy who runs money management for the Gates Foundation was the former CFO of Merck. Presumably, managing the endowment for an organization with goals like "eradicate polio from the face of the earth in the name of Bill and Melinda Gates" is a job done with at least as much deadly seriousness as your average pension fund or university endowment, both of which are organizations that handle their money the same way. "Hypocritical investments in Wal Mart". Sheesh.
- jchrisa 13y ago
  Universities can (and sometimes do) take a more ethical aim than some other funds. Example: http://en.wikipedia.org/wiki/Disinvestment_from_South_Africa#University_campuses http://en.wikipedia.org/wiki/Disinvestment_from_South_Africa...
  - tptacek 13y ago
    The article we're talking about does not accuse the Gates Foundation of investing in apartheid South Africa.
    - mateuszb 13y ago
      Yes, it just says he invests in oil companies in Africa and child detention centers. I'm sorry you just are familiar with the mcdonalds logo and nothing else.
      - deleted 13y ago
        [deleted]
      - tptacek 13y ago
        Getting angry at me isn't going to make your argument any more valid.
jblow 13y ago
Not a carefully-written article. When you buy stock in a public company, that company is not getting your money -- the seller of the stock is! So if you buy a Pepsi stock or a Shell stock, you are investing in that stock, but not investing in the company in a traditional sense (in which they get money from you and expect to pay out more money later, with the surplus coming from their activities). [There is the small factor that the company usually owns some of the stock and demand for the stock usually pushes the price up slightly, the company's stock assets do benefit slightly in a case like this, but this doesn't matter unless they sell, which is a rare activity compared to general volume of investment.] Since the article does not differentiate between stocks, bonds, and loans, it is essentially useless. I guess they didn't care enough to differentiate, and just wanted to say bad stuff about the foundation; or, maybe they just don't understand finance much at all, and didn't think about it.
- judk 13y ago
  Come now. If unethical corporations faced divestiture, amoral investors would expect less profits, which would drive down prices all the way to the IPO/VC buyin and the RSU packages for management. You can't seriously believe that the stock market exists while disbelieving that buy-side demand is a fundamental component of launching and running business.
  - jblow 13y ago
    Of course not, but look: you manage the investment arm of a charity fund and your job is to provide more income for that fund in the future. If you put money into stocks, and get a return on that, that return means very concrete things: more people who get polio vaccines, more people who get dewormed, etc, etc. Very concrete results. If you don't put money into stocks, because they are unethical ... well, how exactly? As we have mentioned the stock has already been sold. So, you don't do it because by doing so you are helping support a market system that may provide a setting for future unethical corporations to arise in and go public? (Along with many ethical corporations?) Or because by providing demand for the stock now, you retrocausally made it possible for that company to have IPO'd years or decades ago? These are very abstract and weird concerns when your job is very directly to help people. You say "if unethical corporations faced divestiture", but even a large fund like this one has no say in that. If they don't invest in McDonald's or Walmart or whatever, it doesn't matter in the grand scheme of things. So seriously, if you were running the fund, what would you do? For real. If you make less money, actual human beings die who would not have died, in volume. (All of this said, I would feel pretty dirty about buying the stock of a prison company, anyway. But railing on them for stuff like McDonald's and Walmart just ... doesn't make sense.)
fridek 13y ago
It's hard to invest in poverty or only in businesses with very high moral standards. I think none of the listed companies is particularly evil and they just happen to give the best return. Discarding what Gates does just because he still thinks and invests like a businessman is a little unfair. There are plenty of charities that fail to deliver just because they are too concerned with being perfect in every little step they take. It's not like you can take all the money donated, go to Africa and "help". You need to invest, do marketing, rent offices and so on. The better it is executed, the more impact per $ donated you get.
MetaCosm 13y ago
That article is so cringe-worthy. As if investing in McDonald's is in some way against the goals of the organization. The organization's goal isn't to reduce McDonald's stock price by a few points, or help people who can afford McDonald's eat more healthy. It is to combat, if not cure, Malaria, HIV, Polio, Tuberculosis, Pneumonia, various intestinal problems (millions die a year from diarrhea) and hundreds of other horrific maiming illnesses that ravage many places. It is to invest in technologies for vaccines, energy, clean water and attempt to end malnutrition (read: starvation). Even today, 21 children die of preventable causes... per minute. The Gates foundation is attacking all the more prevalent causes (70%+). It is rare to see an article miss the point so astoundingly hard, while managing to be completely without empathy AND clueless. Just utterly detached from reality.
- Shamanmuni 13y ago
  Have you read about all the oil and coal companies that the Foundation invested in? Or the private prisons and military contractors? I mean, maybe they aren't a part of Bill's current pet project, but climate change and human rights are both very important issues, as important as diseases. I'm shocked that the response seems to be "Where's the problem in investing in companies that make the world a worse place if he uses that money for other good purposes?". The good you can make doesn't magically erase the bad you made.
confluence 13y ago
To be fair though, investing in Coca Cola or McDonald's is like taking money from fat rich people and then distributing it to poor thin people. I see no hypocrisy, just stupid rich people accidentally helping to feed poor thin people, with the foundation taking the arbitrage.
- judk 13y ago
  Not sure I'd call the McDonald's clienteler rich. But richer than average Africans.
bluekitten 13y ago
What would you prefer to see, $xx billion burnt in a hurry in 10 years and then run out of money, or have a foundation that keeps on working for upliftment of the most vulnerable human beings decades or centuries using money from its past investments after Bill and Melinda run out of time in this world? Also, lets say the foundation did not invest in Walmart shares. How much evilness of Walmart would've been reduced?
dbecker 13y ago
Over 200 million people get malaria each year, and approximately 1 million die. [1] If the Gates Foundation money managers think holding Coca-Cola stock will help fund their fight against the disease, that seems like an extremely easy call. [1] http://www.ncbi.nlm.nih.gov/pubmed/22305225 http://www.ncbi.nlm.nih.gov/pubmed/22305225
justin66 13y ago
Everyone's focused on the problem of whether the foundation should be focused on societally responsible investment, but without noticing the problem with the article's analysis: to get a handle on whether they're investing in that fashion you need to measure the market cap of those decidedly irresponsible companies against those same companies representation in the overall market. My reaction looking at that list was "wow, he managed to invest less than a billion in oil companies." They do make up a fair chunk of the market, after all.

salient 13y ago

Seems like the Gates Foundation is mostly a front for a profit-seeking venture.

tptacek 13y ago
Yeah, Bill Gates has sure pulled the wool over all our eyes on this one.
benched 13y ago
Please explain what sense it would make for a gargantuan liquid fund not to try to invest profitably?
icegreentea 13y ago
If you read the tax return, you'll see that your statement is literally not true.
jblow 13y ago
It is the other way around. If you are doing effective altruism, you want to make sure you have money coming in that you can be altruistic with. The bit about Walmart was especially badly done. If the author of this article thinks Walmart employees are poor on the same scale as the poor that the foundation targets, he really has no clue about world poverty. If the minimum standard of living throughout the world were equal to that of a typical Walmart employee, the world would be tremendously better off.
- rbanffy 13y ago
  So, your argument is that it's right to make Walmart employees poor in order to maximize profits because they are not nearly as poor as the poorest people in the world? If there is something poor here, it's the excuse.
  - bluekitten 13y ago
    How does buying a lot of Walmart shares make Walmart employees poor? I am frankly baffled here. Walmart buyers should probably get more blame here. Have you ever spared a thought about who made the electronics you own and under what conditions?
    - rbanffy 13y ago
      When you buy shares you send the signal the company is doing the right thing. It says you support the company and its business practices and, ultimately, enables the company to continue them. If everybody refuses to buy their shares, their stock will plummet and prompt changes. As for my electronics (and consumables), yes, I try to avoid manufacturers and brands that are associated with poor working practices. Nice try attacking me to try to disprove my argument against the Gates foundation.

tptacek 13y ago

Oh for fuck's sake. How do you think a double-digit-billion endowment gets managed? By Bill Gates sitting around with a copy of the Wall Street Journal and a cup of coffee, picking stocks? No. The money manager roles for the Gates Foundation are extremely serious, and extremely high-status. The guy who runs money management for the Gates Foundation was the former CFO of Merck. Presumably, managing the endowment for an organization with goals like "eradicate polio from the face of the earth in the name of Bill and Melinda Gates" is a job done with at least as much deadly seriousness as your average pension fund or university endowment, both of which are organizations that handle their money the same way. "Hypocritical investments in Wal Mart". Sheesh.

jchrisa 13y ago
Universities can (and sometimes do) take a more ethical aim than some other funds. Example: http://en.wikipedia.org/wiki/Disinvestment_from_South_Africa#University_campuses http://en.wikipedia.org/wiki/Disinvestment_from_South_Africa...
- tptacek 13y ago
  The article we're talking about does not accuse the Gates Foundation of investing in apartheid South Africa.
  - mateuszb 13y ago
    Yes, it just says he invests in oil companies in Africa and child detention centers. I'm sorry you just are familiar with the mcdonalds logo and nothing else.
    - deleted 13y ago
      [deleted]
    - tptacek 13y ago
      Getting angry at me isn't going to make your argument any more valid.

jblow 13y ago

Not a carefully-written article. When you buy stock in a public company, that company is not getting your money -- the seller of the stock is! So if you buy a Pepsi stock or a Shell stock, you are investing in that stock, but not investing in the company in a traditional sense (in which they get money from you and expect to pay out more money later, with the surplus coming from their activities). [There is the small factor that the company usually owns some of the stock and demand for the stock usually pushes the price up slightly, the company's stock assets do benefit slightly in a case like this, but this doesn't matter unless they sell, which is a rare activity compared to general volume of investment.] Since the article does not differentiate between stocks, bonds, and loans, it is essentially useless. I guess they didn't care enough to differentiate, and just wanted to say bad stuff about the foundation; or, maybe they just don't understand finance much at all, and didn't think about it.

judk 13y ago
Come now. If unethical corporations faced divestiture, amoral investors would expect less profits, which would drive down prices all the way to the IPO/VC buyin and the RSU packages for management. You can't seriously believe that the stock market exists while disbelieving that buy-side demand is a fundamental component of launching and running business.
- jblow 13y ago
  Of course not, but look: you manage the investment arm of a charity fund and your job is to provide more income for that fund in the future. If you put money into stocks, and get a return on that, that return means very concrete things: more people who get polio vaccines, more people who get dewormed, etc, etc. Very concrete results. If you don't put money into stocks, because they are unethical ... well, how exactly? As we have mentioned the stock has already been sold. So, you don't do it because by doing so you are helping support a market system that may provide a setting for future unethical corporations to arise in and go public? (Along with many ethical corporations?) Or because by providing demand for the stock now, you retrocausally made it possible for that company to have IPO'd years or decades ago? These are very abstract and weird concerns when your job is very directly to help people. You say "if unethical corporations faced divestiture", but even a large fund like this one has no say in that. If they don't invest in McDonald's or Walmart or whatever, it doesn't matter in the grand scheme of things. So seriously, if you were running the fund, what would you do? For real. If you make less money, actual human beings die who would not have died, in volume. (All of this said, I would feel pretty dirty about buying the stock of a prison company, anyway. But railing on them for stuff like McDonald's and Walmart just ... doesn't make sense.)

fridek 13y ago

It's hard to invest in poverty or only in businesses with very high moral standards. I think none of the listed companies is particularly evil and they just happen to give the best return. Discarding what Gates does just because he still thinks and invests like a businessman is a little unfair. There are plenty of charities that fail to deliver just because they are too concerned with being perfect in every little step they take. It's not like you can take all the money donated, go to Africa and "help". You need to invest, do marketing, rent offices and so on. The better it is executed, the more impact per $ donated you get.

MetaCosm 13y ago

That article is so cringe-worthy. As if investing in McDonald's is in some way against the goals of the organization. The organization's goal isn't to reduce McDonald's stock price by a few points, or help people who can afford McDonald's eat more healthy. It is to combat, if not cure, Malaria, HIV, Polio, Tuberculosis, Pneumonia, various intestinal problems (millions die a year from diarrhea) and hundreds of other horrific maiming illnesses that ravage many places. It is to invest in technologies for vaccines, energy, clean water and attempt to end malnutrition (read: starvation). Even today, 21 children die of preventable causes... per minute. The Gates foundation is attacking all the more prevalent causes (70%+). It is rare to see an article miss the point so astoundingly hard, while managing to be completely without empathy AND clueless. Just utterly detached from reality.

Shamanmuni 13y ago
Have you read about all the oil and coal companies that the Foundation invested in? Or the private prisons and military contractors? I mean, maybe they aren't a part of Bill's current pet project, but climate change and human rights are both very important issues, as important as diseases. I'm shocked that the response seems to be "Where's the problem in investing in companies that make the world a worse place if he uses that money for other good purposes?". The good you can make doesn't magically erase the bad you made.

confluence 13y ago

To be fair though, investing in Coca Cola or McDonald's is like taking money from fat rich people and then distributing it to poor thin people. I see no hypocrisy, just stupid rich people accidentally helping to feed poor thin people, with the foundation taking the arbitrage.

judk 13y ago
Not sure I'd call the McDonald's clienteler rich. But richer than average Africans.

bluekitten 13y ago

What would you prefer to see, $xx billion burnt in a hurry in 10 years and then run out of money, or have a foundation that keeps on working for upliftment of the most vulnerable human beings decades or centuries using money from its past investments after Bill and Melinda run out of time in this world? Also, lets say the foundation did not invest in Walmart shares. How much evilness of Walmart would've been reduced?

dbecker 13y ago

Over 200 million people get malaria each year, and approximately 1 million die. [1] If the Gates Foundation money managers think holding Coca-Cola stock will help fund their fight against the disease, that seems like an extremely easy call. [1] http://www.ncbi.nlm.nih.gov/pubmed/22305225 http://www.ncbi.nlm.nih.gov/pubmed/22305225

justin66 13y ago

Everyone's focused on the problem of whether the foundation should be focused on societally responsible investment, but without noticing the problem with the article's analysis: to get a handle on whether they're investing in that fashion you need to measure the market cap of those decidedly irresponsible companies against those same companies representation in the overall market. My reaction looking at that list was "wow, he managed to invest less than a billion in oil companies." They do make up a fair chunk of the market, after all.