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Melinda French Gates appears to be carving out her own identity as a major philanthropist — and it’s another example of a divorce shaking up philanthropy.
French Gates is reportedly no longer pledging to give most of her fortune to the Bill & Melinda Gates Foundation and will instead divide her resources among other philanthropic initiatives, including her own Pivotal Ventures company, the Wall Street Journal reported, citing unnamed sources.
The upshot: Because French Gates has promised to give away the majority of her wealth, estimated at $6.1 billion, several billion dollars that were previously destined for the Gates Foundation are now arguably up for grabs.
That could have big implications, especially for efforts to advance gender equity. “Donations to women’s and girl’s organizations made up 1.9% of charitable giving in 2018. I think her philanthropy is going to change that number,” said Susan Benford, the chair of Philanos, an international network of women’s giving circles, which are groups of donors who pool their dollars and then decide together where to donate the money.
Benford was referring to research by the Women’s Philanthropy Institute at Indiana University’s Lilly Family School of Philanthropy. Just $8.2 billion in charitable dollars (1.9% of all charitable giving in the U.S.) went to organizations dedicated to women and girls in 2018, the most recent year for which data is available, a WPI report found. That’s “a fraction” of the dollars “received by organizations in traditional nonprofit subsectors like education, health, and the arts,” the WPI report noted. (The research was funded in part by the Bill & Melinda Gates Foundation.)
French Gates seems poised to move the needle on that funding disparity. Long an advocate for women and girls, she has said she plans to target women, girls and other marginalized groups both in the U.S. and globally with her individual philanthropic efforts. In 2019, she pledged to spend $1 billion over the next decade toward advancing women in the U.S. That money will be distributed through Pivotal Ventures, an investment and “incubation” company she founded in 2015. Pivotal Ventures did not respond to a request for comment.
“My giving will continue to focus on the people for whom the barriers to equality are highest,” she wrote in a November 2021 letter updating her individual commitment to the Giving Pledge, the campaign that encourages billionaires to give away the majority of their wealth either in their lifetimes or in their wills.
The Gates Foundation, which Melinda French Gates and her ex-husband, Microsoft
MSFT,
co-founder Bill Gates, launched in 2000, did not respond to a request for comment. The foundation is one of the largest in the world, with a nearly $50 billion endowment, mostly from contributions by the Gateses and Berkshire Hathaway
BRK.A,
CEO Warren Buffett. It makes grants around the world focused on eradicating disease and poverty and promoting gender equality, among other initiatives.
Two divorces unleashed billions
French Gates’s shift away from the foundation she founded with her former husband (where she is still a co-chair) is the second instance of a billionaire split shaking up the philanthropy world. The first was the 2019 breakup of Amazon
AMZN,
founder Jeff Bezos and his then wife, MacKenzie Scott. As a couple, the duo launched some philanthropic initiatives, the largest of which was a $2 billion pledge to help homeless families and build a nationwide network of free preschools serving children in low-income families.
Since the split, MacKenzie Scott has emerged as a fast-moving philanthropic force, shelling out at least $8.6 billion in 12 months to hundreds of nonprofit organizations across the U.S. That was more than the combined amount that the country’s two largest foundations, the Ford Foundation and the Bill & Melinda Gates Foundation, handed out during the same period, Bloomberg reported.
Divorce can sometimes be a catalyst for charitable giving, but not always, said Ken Nopar, vice president and senior philanthropic advisor for the American Endowment Foundation, an organization that sponsors donor-advised funds. Some people find they have less money to donate after a marriage ends, Nopar said.
But he has also seen an uptick in donor-advised funds created by people who have recently divorced. In some cases, couples who started a charitable foundation together end the foundation when they split and replace it with two separate donor-advised funds. (Donor-advised funds are accounts where people put money aside for charitable donations.)
In one case, a woman’s husband agreed to put a “considerable amount” of money into a DAF for his former wife during a contentious divorce. “The client was thrilled because she was then able to make grants for many years afterward, the former spouse was thrilled because he received a large tax deduction for the contribution to the DAF, and they were both thrilled because it was one less thing to argue about,” Nopar wrote.
In another instance, a client who got divorced “wanted to give in a very different direction from her husband, who was not charitably-minded,” Nopar told MarketWatch. The ex-wife set up a DAF with her daughters.
Divorce can be a chance for a fresh start, and for some people that means reprioritizing charitable giving, he said. “They have a blank slate to reassess where they want to give and how much to give,” Nopar said.
Women give differently than men
The rising prominence of MacKenzie Scott and Melinda French Gates underscores a global shift: There’s been “a gradual upward trend” in the share of ultra-wealthy donors who are women, according to the latest Wealth-X report on ultra-high-net-worth philanthropy. In 2021, 88.7% of North America’s ultra-wealthy donors, meaning donors with a net worth of $30 million or more, were men. In 2019, 90.2% were men, according to Wealth-X.
“This shift is taking place as a result of changing cultural and societal attitudes, growth in female entrepreneurship, an increasing focus on gender equality issues, and a rapidly growing number of intergenerational wealth transfers to sons and daughters,” according to the Wealth-X report.
That trend is noteworthy because women do their charitable giving differently than men, multiple studies have shown.
Single women give larger amounts to charity than single men across all income levels, according to WPI research, and wealthy women are more likely to donate than wealthy men, a 2018 U.S. Trust study of high-net-worth philanthropy suggested. Women also take a different approach to giving than men: They’re more likely to volunteer their time and give non-financial donations, a 2021 study by Fidelity Charitable found.
French Gates echoed that idea in her recent Giving Pledge letter, vowing that she would be doing more than “writing checks.” “I also commit my time, energy, and efforts to the work of fighting poverty and advancing equality,” she wrote.
Bill Gates said in his own updated Giving Pledge letter that the Bill & Melinda Gates Foundation “is my top philanthropic priority, even as my giving in other areas has grown over the years — primarily in mitigation of climate change and tackling Alzheimer’s disease.”
