Gates Foundation Grants Try To Speed HIV Vaccine Through Researchers' Cooperation

Last week, we wrote about Bill Gates and Warren Buffett joining forces to form the world's largest charitable foundation. We talked about the men, their businesses and their money. Now we'll say a brief word about one of the actual philanthropic endeavors.

The Gates Foundation this week announced the awards of $287 million to 16 teams of researchers who will intensify the work toward a vaccine against HIV. An innovation in these grants is that the researchers must coordinate their efforts with each other. In fact, some of the grant money is dedicated to the building of a common computer network and database through which the research results will be shared.

We are not experts in philanthropy, so all we know is what we read in the press. But an article on these grants by the Associated Press is summarized on the website one of the main publications in the field, the Chronicle of Philanthropy, so we presume that its interpretation is trustworthy. This article emphasizes the dramatic change this structure of cooperative grants brings to the problem. From the beginning AIDS research has been fragmented and slowed by rivalries among various scientists and pharmaceutical firms. Medical research results in general are often handled with a secrecy akin to private businesses' efforts to protect "trade secrets". Now, in sharp contrast, the Gates grants require the individual teams to share information about studies in progress, data and outcomes to try to speed the development of this badly needed vaccine.

To be sure, the whole trouble with an HIV vaccine isn't just the politics of the research industry. The virus itself is tough. It mutates frequently, so standard vaccine formulae quickly become ineffectual. It behaves in other complex ways that render untenable medical science's usual approaches to vaccine-making.

We wish these researchers well; we have lost entirely too many friends – and a cousin's husband – to AIDS, to say nothing of the massive problem in Africa and elsewhere. We also highlight the way this grant structure continues to alter the face of philanthropy. Philanthropists who have a business background, such as Bill Gates, would automatically think about solving a problem using the most efficient way anyone can find. As we become better acquainted with this evolving arena of American life, we see what a blessing private individuals have been able to cast for the rest of us by sharing their fortunes. They don't expect a personal return on their investments – and these are investments – but they do expect results for society. We wish them well too!

Coming next: some research of our own on how ordinary folks, like you and me, spend our money.

The Two Richest People in the World . . .

. . . recently announced plans to make major donations of "time, talent and treasure" to the cause of global poverty. Bill Gates and Warren Buffett are indeed the two richest individuals in the world, according to an annual tally by Forbes magazine. They did not inherit their fortunes, but made them by building strong businesses.

Bill Gates
On June 15, Bill Gates, chairman of software giant Microsoft, announced that he would begin immediately to pull back from day-to-day management, transitioning over the next two years toward a nearly full-time role with his charitable endeavor, the Bill and Melinda Gates Foundation. It is a leader in new results-oriented approaches to fighting world poverty and disease and enhancing public education, especially high schools.

Mr. Gates, age 50, is young to cede much management control over his brainchild company. In an interview in the July 10 issue of Fortune magazine, Gates asserts, however, that he has been planning this move for some two years, and rather than an "either/or" approach to his activities, he is excited to have two entirely different arenas that engage him so completely. He will retain a research function at Microsoft, his favorite part of the business, and he will definitely "keep up" with technology and with the firm. [The present writer can identify with this way of thinking!]

Gates also asserts that his move is not connected to the enormous gift fellow corporate giant Warren Buffett has just announced. Buffett's grant to the Gates Foundation of stock in his firm Berkshire Hathaway is presently valued at $31 billion and will double the resources of the Gates institution.

Warren Buffett
Buffett's action might be deemed the more dramatic, since, apart from gifts to family foundations, Buffett has not been known for charitable work. In a separate story in the same issue of Fortune, he explains that he always thought he'd spend his lifetime making money that would then be doled out after his death.

Buffett's thinking took a turn also two years ago when his beloved wife of 52 years, Susie, died of a stroke. He had always assumed that she would be the one to administer his assets after he died. Now, he had to find a new way. He realized that his good friends (even bridge partners) Bill and Melinda Gates were already running a large foundation and having a good time doing it. What Buffett enjoys most is running his company; the Gateses could certainly do a better job putting his money to good use than he could.

The result will be an organization with assets of some $60 billion, a size equivalent to such global businesses as Dell Computers, Walt Disney and Honda, according to The Economist for July 1. In striking historical comparison, John D. Rockefeller's charitable giving amounted to $7.6 billion and Andrew Carnegie's to $4.1 billion, expressed in terms of 2006 values.

These events bring us to the topic of philanthropy, and we will certainly talk further about that: the work of the Gates Foundation and other similar efforts. But following our recent encounter with two dishonest business leaders, let us spend some time on Gates and Buffett and their businesses. How are they different from Enron? Well . . .

Microsoft & Berkshire Hathaway: "Not Squeaky Clean"
Gates's company is certainly not squeaky clean. Just Monday morning in the Wall Street Journal, we read that the European Commission has levied a fine on Microsoft for failing to comply with a 2004 anti-trust order. An anti-trust suit in the US went on for years. So Microsoft is not perfect and it's been found guilty of manipulating markets.

When I told a friend that Buffett was giving his fortune away, the friend scoffed, "Buffett? He's just a corporate raider!" Indeed, Berkshire Hathaway is a conglomerate of diverse companies Buffett has bought controlling interest in: household names, like Benjamin Moore Paints, Dairy Queen, Fruit of the Loom. Insurance interests: GEICO and General Re, for two. (The latter is a reinsurance company, which buys participations in large business risks, like aircraft.) As these and other companies were brought under the Berkshire Hathaway umbrella, many employees lost their jobs.

But Gates & Buffett Know How To Invest and Manage with Care . . .
What both Gates and Buffett have, unlike Ken Lay, is a hands-on management style; part of Lay's defense at his trial was that he "didn't know" what his subordinates were doing. But Gates and Buffett stay in touch with their firms' operations. And unlike Jeff Skilling and associate Andy Fastow, they don't tend to make up stories – or form off-the-books "partnerships" – to cover up mistakes. In fact, for instance, in the recent flap over the dating of stock options, the Wall Street Journal reported that through 1999, Microsoft had a policy to date options advantageously, but decided it did not comply with accounting standards and disclosed the facts itself when it ended the practice.

Buffett has a reputation as a thoughtful, thorough and honest investor. His "Letters to Shareholders" and other communications are widely quoted and taught in finance courses. "Always invest in a company for the long-term." "Never invest in a business you cannot understand." And so on. He's known as a low key guy who's lived in the same house in Omaha for over 30 years, drives an older model Lincoln Town Car and drinks Coke. He told Fortune magazine he hopes other well-to-do executives will follow his example in giving away their money sooner rather than later.

. . . and As They Give with Care, We Offer Prayer
We prayed here for business leaders who are convicted criminals. We can surely also pray for the intention of business leaders who are trying – by and large – to be honorable and generous.

"For a blessing upon all human labor, and for the right use of the riches of creation, that the world may be freed from poverty, famine, and disaster, we pray to you, O Lord.

"Lord, hear our prayer."

The Book of Common Prayer
Prayers of the People, Form V

On the Death of Kenneth Lay

You may have read or heard that Kenneth Lay, former chairman of the former Enron Corporation, died of a heart attack early Wednesday morning in Aspen, Colorado. Our last comment about him was on May 30, when we described how we had prayed in church for him and his associate Jeff Skilling just days after their federal court convictions for fraud. We're writing now because we feel we must acknowledge Lay's passing, but we admit to being bewildered at this development.

Perhaps our last statement about Lay is the place to leave his story. That is, soon after the jury verdict, we prayed for him and his family, not with any specific intention but simply because we were led to do so. Now, may God in his mercy give rest to Mr. Lay's troubled soul and strength to his troubled family. And may God in his mercy tend to all who were harmed by Lay's crimes and grant them strength and energy to face the days ahead.

In an article to appear soon after the weekend, we will tell you a much better story about two other business leaders who have also made news in the last couple of weeks, Bill Gates and Warren Buffett.

Carol