Gates Foundation to up spending despite recession
In a letter, Bill Gates says his foundation's assets declined by a fifth in 2008, but the group will increase its spending this year to $3.8 billion.
In a public letter on Monday, Bill Gates took stock of both the economy and his foundation's efforts to improve education and combat global health issues.
As for the economy, Gates said that he hoped to be able to look back two years from now and say that the crisis "was something that was short-term and that has passed" but said that he expects "the effects of the crisis will last beyond that."
The economic woes took their toll on the Bill & Melinda Gates Foundation, which saw its assets drop by a fifth last year, Gates said in the letter (PDF). Still, the group plans to up its 2009 spending to $3.8 billion, a full 7 percent of the foundation's assets and up from $3.3 billion in 2008. (The IRS requires foundations to spend 5 percent of their assets each year.)
"The global recession and market turmoil are forcing everyone to take a hard look at their plans," Gates wrote in the letter. "Businesses and consumers are cutting back on spending. The 50-year-long credit expansion that fueled high spending levels, particularly in the United States, has turned into a credit contraction."
That, he said, has led governments to situations where they have budget shortfalls at the same time there is an increased demand for government services.
The letter, which Gates said will become a yearly tradition, comes about six months after Gates left full-time work at Microsoft to devote more time to the foundation. The letter also goes into detail on the foundation's work in both global health and education, pointing to successes and failures on each front.
Gates praised the Obama administration for maintaining its commitment to education at the same time tax revenues are coming up short and there is a need for short-term stimulus to the economy. He also called for continued foreign aid.
"I hope the United States and other rich countries will continue to increase their aid, and when I meet with political leaders I encourage them to do so," Gates said, in particular praising Britain's Tony Blair and Gordon Brown.
Gates will get a chance to bend the ear of the world's political elite later this week at the World Economic Forum in Davos, Switzerland. Government leaders expected at Davos include Brown, who succeeded Blair as Britain's prime minister; Chinese Premier Wen Jiabao; Russian Prime Minister Vladimir Putin; German Chancellor Angela Merkel; and Japanese Premier Taro Aso.
"Although it will be difficult to keep aid-related issues on the front page during this crisis, we need to meet the challenge by making sure the success stories are told and making sure that inequity that is out of sight, is not out of mind," Gates wrote.