Ed-Tech Policy Opinion

The Gates Foundation’s Leveraged Philanthropy: Corporate Profit Versus Humanity on Three Fronts

By Anthony Cody — July 04, 2012 8 min read
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Guest post by Chemtchr. Part One of Two. Part Two is here.

Philanthropy wonk Lucy Bernholz defines the buzzword leverage
as “the idea that you can use a little money to access a lot of money.”

It’s hard to think of the Gates Foundation’s $26 billion leverage effort
as “a little money”, especially since it’s been spread over the globe to gain access to vastly more resources than it contributes, including U.S. tax dollars, the foreign exchange of emerging African nations, and United Nations funds for international development and world health.

Gates’ leveraged philanthropy model is a public-private partnership
to improve the world, partly through targeted research support but principally through public advocacy and tax-free lobbying to influence government policy. The goal of these policies is often to explicitly support profitability for corporate investors, whose enterprises are seen by the Gates Foundation as advancing human good. However, maximum corporate profit and public good often clash when its projects are implemented.

For example, chemical giant Monsanto has partnered with the Gates Foundation, which reportedly works to suppress local seed exchanges and environmentally sustainable agricultural practices through its global agricultural charity work. Fraud-prone drug giant GlaxoSmithKline
is a partner in the Foundation’s work to leverage its own relatively fractional contribution to vaccination efforts, so that it centrally controls enormous world funds for purchase, pricing, and delivery of vaccines for world public health. And in its U.S. education reform charity work, the Gates Foundation has increasingly shifted its funding to promote market domination by its British corporate education services partner, Pearson Education.

The Gates Foundation, and Gates personally, also own stock and reap profits from many of these same partner corporations. In addition, the Foundation owns a profit-generating portfolio of stocks which would seem to work against the Foundation’s declared missions, such as the Latin American Coca-Cola FEMSA distributorship and five multinational oil giants operating in Nigeria. These corporate investments, now moved to a blind trust whose trustees are Bill and Melinda Gates, are collaterally supported by the Foundation’s tax-free lobbying and advocacy activities.

Criticism of the profit-driven philanthropy agenda is muted by the fact that many of the Foundation’s “advocacy” gifts are positioned to leverage control of policy analysis and news outlets. The Gates Foundation recently undertook sponsorship of the Guardian’s Global Development coverage, for instance, which now maintains a weary-but-compliant stance toward corporate domination of development aid. The Gates Foundation also literally dominates news coverage of Global Health issues.

On the U.S. Education Reform front, the Gates Foundation maintains long-time charitable support of Media Bullpen, as well as Education Week itself (see disclaimer).

Tom Paulson of Humanosphere reviewed some critical stories that reporters did get published in major news outlets last November.

The Global Health Front

In an interview with Forbes science writer Matt Herper, Gates explained how ensuring the profitablility of Big Pharma’s vaccine sales will advance the health of third world populations:

Fortunately, our vaccine discovery rate has been better than the recent drug discovery rate of pharma," Gates said. "And, you know, pharma doing well is important for the world, so hopefully their discovery rate will go up.

Donor nations were shocked when UNICEF disclosed that it has been forced to pay artificially elevated prices for vaccines under an arrangement called the Advance Market Commitment, which was brokered by Gates Foundation-dominated GAVI alliance, to greatly increase drug company profits. Stakeholders also worry that industry reports of particular vaccine’s effectiveness might be skewed by marketing goals.

There is no doubt that vaccines save lives, but a 2009 analysis by the British medical journal Lancet flagged a number of concerns about the Foundation’s pattern of expenditures, particularly questioning the propriety of making “charitable” contributions to the World Bank’s International Finance Corporation (IFC). Others have expanded on those concerns.

The 2010 Gates Foundation announcement of $1.5 billion for maternal health in developing countries over five years was welcomed, but it came heavily leveraged. Gates launched the Health in Africa Fund, through the International Finance Corporation (IFC), to establish new mechanisms to invest world health funding and national health budgets in private-sector healthcare facilities in Africa. The Gates Foundation’s funding category for Global Maternal Health includes research and development in the US of technology and treatments, and also advocacy in vulnerable African nations for government policies. Since Gates believes sustainable health systems must be privately profitable, he leverages his “maternal health” funding to effectively divert investment of available in-country funds, as well as NGO funding, into private ventures that he favors, instead of into national health plans.

The pursuit of profitability for the Foundation’s corporate marketers warps the design and implementation of delivery programs. The Gates Foundation leverages its own contributions to dominate and focus external funds into its own intensive, vertically integrated programs.

Controlled from above and afar,
the programs divert all available health resources to temporary, fraud-prone drives. Vertical integration means the Foundation controls every aspect of the project, which disappears when funding is exhausted. Horizontal development of medical service capacity on the ground is frozen out, and the Foundation’s opposition to comprehensive national health programs means African physicians must watch their patients die from conditions that would be treatable if a basic medical infrastructure existed.

The Global Agricultural Development Front

The Gates Foundation’s philanthropic agricultural development program is partnered with international agribusiness corporations, and is aimed at promoting advanced technologies such as genetically modified crops and pesticides in developing nations. In light of this conflict, the Bill and Melinda Gates Foundation’s own investments in Monsanto and Cargill, particularly, have come under heavy criticism.

In addition to leveraging control of international development funds for its Alliance for a Green Revolution in Africa (Agra) initiative, the Gates Foundation influences African governments directly to expend their own agricultural budgets to support a crop warehouse/borrowing system that binds farmers to Gates’ international corporate partners, for future seed and pesticide access. On every continent but Africa, trade differential due to profits extracted by agribusiness already results in a net flow of wealth out of the developing economies, more than offsetting charitable contributions. The payoff from a new Green Revolution for the recipients of the Foundation’s charity also includes health damage and environmental degradation. African and Indian agricultural workers maintain that the Foundation’s philanthropy is environmentally toxic, and undermines vital agricultural development that respects local conditions.

The recent court action by a consortium of five million Brazilian soy farmers highlights how agricultural development gifts can plunge farmers into perpetual serfdom to corporate agribusiness. As reported in the journal Nature, the farmers have successfully sued Monsanto
to claw back $7.5 billion in “royalties” for the planting of seeds they had harvested themselves, for which Monsanto forcibly extracts payments. A Brazilian judge will now rule on Monsanto’s appeal.

The activism of third-world environmental organizations against the Gates Foundation’s take-over of UN development programs goes unreported in the U.S. press. It boiled over on June 22, however, when young Civil Society representatives staged a mass walkout of the corporate-dominated Rio+20 United Nations Summit in Brazil. The representatives of the world’s actual voluntary philanthropic organizations reconvened at a summit sponsored by Friends of the Earth. Their own Rio+20 Outcome Document was delivered to over 100 heads of state and government.

The U.S. Education Reform Front

The Gates Foundation’s model of leveraged philanthropy has had serious consequences in U.S. education. Many sources have criticized the specifics of Gates’ profit-driven, politically enforced innovations in public schools. In Part Two of this series, I’ll examine how the Foundation’s corporate philanthropic model has undermined the quality of American public education, and threatens its democratic foundation.

On discussions of this blog on other forums, readers have asked for links demonstrating the direct connection between the Gates Foundation and the corporate marketing of proprietary genetically modified seeds.

The difficulty here is that the Foundation describes its projects in general terms like this:

The money will fund agricultural development projects that are already producing great results for farmers, with a goal to help millions of small farmers lift themselves out of poverty. This re-investment will be in projects that have already: Supported the release of 34 new varieties of drought-tolerant maize.

No mention is made of partnerships with Monsanto, and “supporting the release” fails to convey how its grants to agricultural ministries helped promote “healthy” free-market agricultural policies like suspending subsidies to poor farmers, or banning traditional seeds from government seed banks.

To find the connection, you have to start at The Indypendent, by Paige Aarhus
“Why Is the Gates Foundation Helping Monsanto?”

Gates sponsorship of Monsanto in India makes no mention of collateral damage by its partner, Monsanto, there:

Bt cotton - less miracles, more failures for Indian farmers

KILLER SEEDS: The Devastating Impacts of Monsanto’s Genetically Modified Seeds in India

Tragically, corruption breeds corruption, and leverage promotes leverage. What link can I give you, to document the absence of coverage of these issues on our captive media? Vandana Shiva put the pieces together on Al Jazeera.

See Diane Ravitch’s response to this: “I am puzzled by the Gates Foundation.”

Part Two is here.

What do you think? Is there a danger in the Gates Foundation’s approach to leveraged philanthropy?

Chemtchr teaches science and advises a student service club at a public high school in a diverse low-income community. She is a graduate of the University of California-Santa Cruz and Montana State University-Bozeman, and has taught in urban community-based programs and at a tribal college, as well as in public districts. She’s active in Citizens for Public Schools, and in local and state councils.

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