Laying a foundation for change

Gates' charity uses outside researchers to evaluate grants

May 27, 2000|By Kate Shatzkin | Kate Shatzkin,SUN STAFF

SEATTLE - From its inconspicuous headquarters on the shore of Lake Union, the Bill and Melinda Gates Foundation has pledged $350 million to transform public school districts into engines of achievement. An additional $750 million is intended to provide vaccines to the poorest regions of the world, and $200 million will go to help libraries cross the "digital divide."

With those amounts, the world's largest charitable foundation has a chance of making a sizable mark on its carefully chosen areas of interest. It also runs the risk of high-profile failure.

The foundation of the Microsoft Corp. founder and his wife, which has grown to $21.8 billion during the past year, aims to interest government and industry in long-neglected areas of need and to make sure its sweeping efforts work.

"We place a high priority on investments that serve as a catalyst to quicken the pace of progress," said Patty Stonesifer, who co-chairs the foundation with William H. Gates Sr., the software maker's father.

There are signs that the foundation is meeting its goal of affecting policy. In global health, in which the Gates Foundation has committed nearly $1 billion to development and delivery of vaccines, the best indication of its effectiveness might be the willingness of governments, foundations and pharmaceutical companies to join the cause.

"The Gates money, along with other investors ... [is] really accelerating the field disproportionately," says Dr. Philip K. Russell, a professor emeritus at the Johns Hopkins University School of Hygiene and Public Health.

The foundation's public affairs director, Trevor Neilson, says its founders are aware that no matter how carefully they monitor their projects, some riskier efforts are bound to fail. "Some of our money's going to be wasted," he said. "And it's not going to be fun when it happens."

In addition to its ambitious goals in the fields of health care, schools and libraries, the Gates Foundation hopes to make a mark on philanthropy in its rigorous approach to evaluating the grants' outcomes, whether they are positive or not.

To justify its huge investments, the foundation has arranged for a small army of outside researchers to amass statistics, conduct focus groups and collect narratives. Their goal is to illustrate progress toward that elusive target of philanthropic endeavors: to have an impact.

At many large foundations, that job would be done by staff members. But the Gates Foundation's philosophy of remaining small while dispensing unprecedented gifts has led to a different - and some say better - approach to evaluation.

"We've outsourced, I guess is the common phrase that's used in business," says Dr. Gordon W. Perkin, director of the foundation's global health program and one of a handful of senior staff members.

That approach comes out of necessity. To keep up with government requirements that it give away 5 percent of its assets annually, the foundation must hand out nearly $1.1 billion - nearly $3 million a day - this year.

To accomplish that, the foundation has about 200 employees, most of whom build and install library computers. The Ford Foundation, by contrast, is about 60 percent as large, with $13 billion, but has three times as many employees worldwide.

Though independent evaluation has long been a tool of government, it is a newer one for philanthropies, which often take a greater role in evaluating their programs. And with the unprecedented scale of the Gates projects, foundation watchers say the amount of information produced could be immense.

`Some new vitality'

Waldemar A. Nielsen, a longtime consultant to foundations who once worked at the Ford Foundation, lauds the Gates approach.

"Philanthropy can get to be a terribly in-grown, self-laudatory activity," says Nielsen. "You have the same people who recommend the grants and then evaluate the grants, and, of course, they always like the grants. ... I do think this is a fresh and different approach that will bring some new vitality."

Dorothy Ridings, president of the Council on Foundations, said the level of external scrutiny could yield great benefits.

"Certainly, the Gateses are trying a new approach," she says. "I think what they're trying to do is very smart and ambitious."

For now, the Gates Foundation will rely on its "partners" - other nonprofit groups and foundations with a long track record in a given field - to be its eyes and ears in the far corners of the globe.

By contrast, billionaire George Soros' network of foundations has offices in more than 30 countries.

"Probably it's an efficient way for them to operate," says Soros, whose philanthropies spent $570 million on projects last year. "Ours is not efficient. It has other virtues, in that it touches the grass roots. We are bottom-up, and they are top-down."

The first results of the Gates approach to evaluation can be seen in the foundation's library program, one of Bill Gates' earliest philanthropic projects, dating to 1997.

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