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A woman in Mozambique uses an ethanol cookstove supplied by the Novozymes corporation to replace harmful, charcoal-based indoor stoves – and, not coincidentally, to expand its future markets for the ethanol it produces. (Jeffrey Barbee/Jeffrey Barbee)
A woman in Mozambique uses an ethanol cookstove supplied by the Novozymes corporation to replace harmful, charcoal-based indoor stoves – and, not coincidentally, to expand its future markets for the ethanol it produces. (Jeffrey Barbee/Jeffrey Barbee)

Welcome to the next generation of philanthropy Add to ...

To receive the funds, these bodies must apply the scientific standards, success-measuring techniques and organizing structures of the Gates Foundation. Since the amounts involved are so large, they often end up altering those institutions' basic DNA.

An official with the British government's Department for International Development tells of a foreign-aid program that was receiving hundreds of millions from both Whitehall and the Gates Foundation. The two clashed over how to measure the program's results.

“The outcome was, as it always is in such cases, that the Gates people got to install one of their people as the director,” the official says.

Such effects can be witnessed around the world, as the Gates people struggle to spend a sum of money each year that some analysts consider too large to be absorbed.

“Gates is so big and so influential that if they decide they want to focus on, say, food security, then they have the weight to get other foundations and, indeed, government agencies to change the game,” Randall Kempner, whose Aspen Institute promotes for-profit philanthropy, told an interviewer last year.

Mr. Gates's influence is even more powerful because it is amplified through the funds of other billionaires. Media tycoon Ted Turner's United Nations Foundation, founded in 1999, gets substantial funding from the Gates Foundation and, in turn, finances many of the old-school charities (and governments). Mr. Buffett took that meta-charity approach to a new level when he decided not to attach his name to a foundation but to leave his legacy to Mr. Gates.

And Mr. Turner, Mr. Gates and Mr. Buffett are all now campaigning to persuade other billionaires, such as Oracle chief executive officer Larry Ellison and New York Mayor Michael Bloomberg, to part with half their fortunes in the name of philanthropy.

Some may spot a piquant irony here: In an age of grotesque inequality, the interests of the world's poor and diseased have become the concern of a small circle of billionaires, motivated – whether by guilt, concern for their reputations, vanity or pure altruism – to give a proportion of their wealth to do things that tax-deprived governments can't manage.

And the effect of their huge injection of personal wealth is often to change the behaviour of governments and more middle-class postwar charities. It is, in short, a very top-down way to impose bottom-up solutions to the world's problems.

Whatever the long-term effects, few will deny that the Gates effect has been broadly beneficial so far. “It puts human well-being back on the agenda,” the Bellagio Initiative's Mr. McGregor says, “because people like Gates are keen to rethink it now.”

Although the old-school charities claim to be happily co-operating with the billionaires' funds, in many important ways they are being left behind. That was most dramatically evident in what many consider the greatest accomplishment of the Gates and Clinton era: the taming of the AIDS crisis in sub-Saharan Africa.

In 2002, when Mr. Gates, Mr. Clinton and others decided to create the Global Fund to Fight AIDS, Tuberculosis and Malaria, people assumed it would be operated by the World Health Organization, a branch of the UN. But Mr. Gates and Mr. Clinton were quietly adamant that the WHO be bypassed entirely.

“There's a real sense,” says a WHO official who was involved in the dispute, “that if it had gone to the WHO, we'd still be at the planning stage today. We were seen as too slow-moving and bureaucratic – not entirely inaccurately.”

Since then, the Global Fund has spent $19-billion on programs of education, HIV drug treatment, adult circumcision and hands-on preventive health care of unprecedented scope and scale. And the campaign is a startling success: The AIDS crisis, which at the beginning of the decade had reduced average life expectancy in some countries to little more than 30 years, is coming under control in most countries, with deaths down by 20 per cent and new infections by more than 25 per cent in the past decade.

In a parallel effort, the Global Alliance for Vaccines and Immunization has vaccinated more than 250 million children and prevented five million deaths. It created a successful meningitis vaccine last year and announced a malaria vaccine this month.

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