Money, Momentum, and the Gates Foundation

What Will Warren Buffett’s Gift Mean for U.S. Schools?

News stories about Warren E. Buffett’s huge donation to the Bill & Melinda Gates Foundation, announced in June, tended to cite the foundation’s successes in international health. They said little about education. ( "Gates Foundation’s New Billions Viewed as Boon, Challenge for Education Giving," July 12, 2006.) Does this mean that the foundation has made good investments in health and bad ones in education? Not necessarily, but it does reflect the differences in the problems Gates has addressed via its health and education giving, and the differences in its strategies in each area.

In health, the foundation has focused on delivering established remedies to people who previously could not get them. Thanks to the demand for innovative pharmaceuticals and medical procedures that exists in Europe and the United States, remedies are available for many of the illnesses that beset people in poorer areas of the world. Foundation grants can purchase medicines that poor people can’t afford, and create simple delivery systems in areas that have too few doctors, nurses, and clinics. In some localities, the foundation is bypassing corrupt government delivery systems, but in most, it is creating new mechanisms to do one or two things simply and well.

As in its health investments, Gates’ work in education is focused on creating new opportunities for the poor and disadvantaged. But in education, the foundation is investing in the United States, not abroad. Here, a delivery system made up of state education departments and local school districts already exists. In contrast to health care, there is no competitive market to create demand for new methods and technologies. The delivery system is frozen by politics, and has all but a small proportion of its money committed to employees and mandated services. Insider groups tolerate small-scale experimentation but resist wide adoption of new ways of doing things, because these can cause job insecurity and upset deals that have been painfully hammered...

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