Bill Gates and Melinda French Gates have at times referred to the foundation they established together as their “fourth child.” If over the next two years they can’t find a way to work together following their planned divorce, Mr. Gates will get full custody.
That was one of the most important takeaways from a series of announcements about the future of the world’s largest charitable foundation made on Wednesday by its chief executive, Mark Suzman, overshadowing an injection of $15 billion in resources that will be added to the $50 billion previously amassed in its endowment over two decades.
“They have agreed that if after two years either one of them decides that they cannot continue to work together, Melinda will resign as co-chair and trustee,” Mr. Suzman said in a message on Wednesday to employees of the Bill and Melinda Gates Foundation. If that happened, he added, Ms. French Gates “would receive personal resources from Bill for her philanthropic work” separate from the foundation’s endowment.
The money at stake underscores the strange mix of public significance — in global health, poverty reduction and gender equality, among other important areas — and private affairs that attends any move made by the first couple of philanthropy, even after the announcement of their split. The foundation plans to add trustees outside their close circle, a step toward better governance that philanthropy experts had urged for years.
announced their divorce in May, Mr. Gates and Ms. French Gates noted the importance of the work done by the foundation they had built and said they “continue to share a belief in that mission.” In the announcement on Wednesday, each echoed those sentiments.
“These new resources and the evolution of the foundation’s governance will sustain this ambitious mission and vital work for years to come,” Mr. Gates said in a statement.
Ms. French Gates emphasized the importance of expanding the board. “These governance changes bring more diverse perspectives and experience to the foundation’s leadership,” she said in a statement. “I believe deeply in the foundation’s mission and remain fully committed as co-chair to its work.”
In the immediate aftermath of the divorce announcement, it was unclear how they would share control of the institution. Wednesday’s announcement indicated that if they cannot work out their differences, it is the Microsoft co-founder Mr. Gates who will maintain control, as he essentially buys his ex-wife out of the foundation.
Mr. Suzman said he did not know how much Ms. French Gates would get if it came to that. But any payout would most likely be significant.
Ms. French Gates’s name since the divorce was announced. She pursues her own priorities through a separate organization known as Pivotal Ventures. Mr. Gates also has his own group, Gates Ventures.
Less than a year ago, the Gates Foundation was run by Mr. Gates, Ms. French Gates, his father and one of his closest friends, the billionaire investor Warren E. Buffett. It was a remarkable concentration of power for one of the most influential institutions in the world, a $50 billion private foundation that works in every corner of the globe.
The restructuring announced Wednesday could begin the process of making the Gates Foundation more responsive to the people its mission aims to help and loosen the grip on the reins that its founders have held for more than two decades.
“We’re trying to do this in a very careful and deliberate manner, thinking for the long term,” Mr. Suzman said in an interview.
Daily Business Briefing
In a larger sense, the planned changes at the Gates Foundation reflect the tensions within philanthropy as a whole — between the wishes of the wealthy, powerful donors who provide the millions and even billions of dollars and the nonprofits using those funds to feed, shelter and treat those in need.
“The problems with the governance predated the separation and divorce just as those problems are an issue with all family foundations,” said Rob Reich, co-director of the Center on Philanthropy and Civil Society at Stanford.
Two former senior Gates Foundation officials called for an expanded board in an article a few weeks after the divorce announcement, including “a chair who is not the foundation’s C.E.O., founder or a founder’s family member.”
“Given that founders receive a substantial tax benefit for their donations, the assets the board oversees should be regarded as belonging to the public, with the board being held accountable to a fiduciary standard of care,” wrote Alex Friedman, the former chief financial officer, and Julie Sunderland, the former director of the foundation’s Strategic Investment Fund.
The Gates Foundation is trying to fight Covid-19, eradicate polio and reshape the struggle for gender equality, even as its two co-chairs extricate themselves from a 27-year marriage. The foundation has more than 1,700 employees and makes grants in countries around the world. Since 2000, the foundation has made grants totaling more than $55 billion, much of it from Mr. Gates and Ms. French Gates, but tens of billions also came from Mr. Buffett, the chief executive of Berkshire Hathaway.
Yet, in significant ways, the future of such an influential institution, one that touches the lives of millions of people through its grant recipients, is being decided in a separation agreement between two billionaires.
Mr. Buffett’s announcement last month that he was stepping down as the third trustee of the foundation made clear that the divorce had set significant changes in motion. Mr. Suzman promised at the time that governance changes would be announced this month, with many observers anticipating that a new slate of independent trustees would be revealed.
Today’s Best Reader Comments
Details on what that might look like remained few on Wednesday, with neither names of candidates for the board of trustees nor even the ultimate number of new trustees released. Mr. Gates and Ms. French Gates will approve changes to the foundation’s governance structures by the end of the year and the new trustees will be announced in January, according to the statement.
At the center of the impending changes stands Mr. Suzman, a 14-year veteran of the Gates Foundation, who was named chief executive just as the spread of Covid-19 in the United States was becoming apparent. Born in South Africa, the Harvard- and Oxford-educated Mr. Suzman served as a correspondent for The Financial Times in London, South Africa and Washington before going to work at the United Nations. He joined the foundation in 2007 to work on global development policy before claiming the top post last year.
Mr. Suzman said in an interview that he had heard that Mr. Gates and Ms. French Gates would be divorcing only about 24 hours before the news was announced. He said they had started talking about possible governance changes “almost right away” after that.
He said he was in regular contact with both. “I’m having three-way conversations with them,” Mr. Suzman said. “We’re having regular three-way email exchanges and other discussions.”
He noted that the hands-on leadership of Mr. Gates and Ms. French Gates meant the changes will take some time to enact.
“The degree and depth of engagement of our co-chairs and trustees goes significantly beyond what a traditional board does and how it does it,” he said in the interview. “So we’ll need some time to think through how we balance that with the people we bring on board.”
Mr. Suzman will work with Connie Collingsworth, the foundation’s chief operating officer and chief legal officer, to handle the process. The final decisions on both the new trustees and the changes to the foundation’s governance documents will be made by Mr. Gates and Ms. French Gates. It is a reminder that, at least for now, power remains concentrated in the former couple.
By the time Melinda French Gates decided to end her 27-year marriage, her husband was known globally as a software pioneer, a billionaire and a leading philanthropist.
But in some circles, Bill Gates had also developed a reputation for questionable conduct in work-related settings. That is attracting new scrutiny amid the breakup of one of the world’s richest, most powerful couples.
In 2018, Ms. French Gates wasn’t satisfied with her husband’s handling of a previously undisclosed sexual harassment claim against his longtime money manager, according to two people familiar with the matter. After Mr. Gates moved to settle the matter confidentially, Ms. French Gates insisted on an outside investigation. The money manager, Michael Larson, remains in his job.
On at least a few occasions, Mr. Gates pursued women who worked for him at Microsoft and the Bill and Melinda Gates Foundation, according to people with direct knowledge of his overtures. In meetings at the foundation, he was at times dismissive toward his wife, witnesses said.
public view, Ms. French Gates was unhappy. She hired divorce lawyers, setting in motion a process that culminated this month with the announcement that their marriage was ending.
a public appearance in 2016.
Long after they married in 1994, Mr. Gates would on occasion pursue women in the office.
In 2006, for example, he attended a presentation by a female Microsoft employee. Mr. Gates, who at the time was the company’s chairman, left the meeting and immediately emailed the woman to ask her out to dinner, according to two people familiar with the exchange.
“If this makes you uncomfortable, pretend it never happened,” Mr. Gates wrote in an email, according to a person who read it to The New York Times.
in a column in Time magazine announcing the pledge.
money manager, earning solid returns on the Gateses’ and the foundation’s combined $174 billion investment portfolio through a secretive operation called Cascade Investment. Cascade owned assets like stocks, bonds, hotels and vast tracts of farmland, and it also put the Gateses’ money in other investment vehicles. One was a venture capital firm called Rally Capital, which is in the same building that Cascade occupies in Kirkland, Wash.
Rally Capital had an ownership stake in a nearby bicycle shop. In 2017, the woman who managed the bike shop hired a lawyer, who wrote a letter to Mr. Gates and Ms. French Gates.
The letter said that Mr. Larson had been sexually harassing the manager of the bike shop, according to three people familiar with the claim. The letter said the woman had tried to handle the situation on her own, without success, and she asked the Gateses for help. If they didn’t resolve the situation, the letter said, she might pursue legal action.
The woman reached a settlement in 2018 in which she signed a nondisclosure agreement in exchange for a payment, the three people said.
While Mr. Gates thought that brought the matter to an end, Ms. French Gates was not satisfied with the outcome, two of the people said. She called for a law firm to conduct an independent review of the woman’s allegations, and of Cascade’s culture. Mr. Larson was put on leave while the investigation was underway, but he was eventually reinstated. (It is unclear whether the investigation exonerated Mr. Larson.) He remains in charge of Cascade.
published an article detailing Mr. Gates’s relationship with Mr. Epstein. The article reported that the two men had spent time together on multiple occasions, flying on Mr. Epstein’s private jet and attending a late-night gathering at his Manhattan townhouse. “His lifestyle is very different and kind of intriguing although it would not work for me,” Mr. Gates emailed colleagues in 2011, after he first met Mr. Epstein.
(Ms. Arnold, the spokeswoman for Mr. Gates, said at the time that he regretted the relationship with Mr. Epstein. She said that Mr. Gates had been unaware that the plane belonged to Mr. Epstein and that Mr. Gates had been referring to the unique décor of Mr. Epstein’s home.)
The Times article included details about Mr. Gates’s interactions with Mr. Epstein that Ms. French Gates had not previously known, according to people familiar with the matter. Soon after its publication she began consulting with divorce lawyers and other advisers who would help the couple divide their assets, one of the people said. The Wall Street Journal previously reported the timing of her lawyers’ hiring.
The revelations in The Times were especially upsetting to Ms. French Gates because she had previously voiced her discomfort with her husband associating with Mr. Epstein, who died by suicide in federal custody in 2019, shortly after being charged with sex trafficking of girls. Ms. French Gates expressed her unease in the fall of 2013 after she and Mr. Gates had dinner with Mr. Epstein at his townhouse, according to people briefed on the dinner and its aftermath. (The incident was reported earlier by The Daily Beast.)
For years, Mr. Gates continued to go to dinners and meetings at Mr. Epstein’s home, where Mr. Epstein usually surrounded himself with young and attractive women, said two people who were there and two others who were told about the gatherings.
Ms. Arnold said Mr. Gates never socialized or attended parties with Mr. Epstein, and she denied that young and attractive women participated at their meetings. “Bill only met with Epstein to discuss philanthropy,” Ms. Arnold said.
On at least one occasion, Mr. Gates remarked in Mr. Epstein’s presence that he was unhappy in his marriage, according to people who heard the comments.
Leon Black, the head of Apollo Investments who had a multifaceted business and personal relationship with Mr. Epstein, according to two people familiar with the meeting. The meeting was held at Apollo’s New York offices.
It is unclear whether Ms. French Gates was aware of the latest meetings with Mr. Epstein. A person who recently spoke to her said that “she decided that it was best for her to leave her marriage as she moved into the next phase of her life.”
The fortune of Bill Gates and Melinda French Gates exceeds the size of Morocco’s annual economy, combines the value of Ford, Twitter and Marriott International and is triple the endowment of Harvard. While few know how their wealth will be divided in the divorce, one thing is clear: breaking it up can’t be easy.
Mr. Gates built one of the great fortunes in human history when he founded Microsoft in 1975 with Paul Allen. The Gateses’ net worth is estimated to be more than $124 billion, and includes assets as varied as trophy real estate, public company stocks and rare artifacts.
There’s a big stake in the luxury Four Seasons hotel chain. There are hundreds of thousands of acres of farmland and ranch land, including Buffalo Bill’s historic Wyoming ranch. There are billions of dollars’ worth of shares in companies like AutoNation and Waste Management. There’s a beachfront mansion in Southern California. And one of Leonardo da Vinci’s notebooks.
“The amount of money and the diversity of assets that are involved in this divorce boggles the imagination,” said David Aronson, a lawyer who has represented wealthy clients in divorce cases. “There have rarely been cases that are even close to this in size.”
2019 divorce between the Amazon founder Jeff Bezos and his now ex-wife, the novelist and philanthropist MacKenzie Scott, was bigger. Mr. Bezos had an estimated fortune of $137 billion, though mostly in Amazon stock, and Ms. Scott kept 4 percent of Amazon’s shares, worth $36 billion at the time.
But Mr. Gates has for decades been diversifying his holdings; he owns just 1.3 percent of Microsoft. Instead, his stock portfolio includes stakes in dozens of publicly traded companies. He is the largest private owner of farmland in the country, according to The Land Report. In addition to the Four Seasons, he has stakes in other luxury hotels and a company that caters to private jet owners. His real estate portfolio includes one of the largest houses in the country and several equestrian facilities. He owns stakes in a clean energy investment fund and a nuclear energy start-up.
Forbes, or $146 billion, according to the research firm Wealth-X. Including the Gates Foundation’s endowment and the Gates personal fortune, Cascade most likely oversees assets that put it on par or beyond some of the world’s biggest hedge funds in size.
Mr. Larson operates Cascade with an obsessive level of secrecy, going to great lengths to cloak the firm’s transactions so that they can’t easily be traced back to the Gateses. In a 1999 interview with Fortune magazine, Mr. Larson said he chose the name “Cascade” because it was a generic-sounding name in the Pacific Northwest.
that questions about the future of the Gates Foundation immediately arose following news of the divorce. The foundation directs billions to 135 countries to help fight poverty and disease. As of 2019, it had given away nearly $55 billion. (In 2006, Mr. Buffett pledged $31 billion of his fortune to the Gates Foundation, greatly increasing its grant making.)
Since he stepped down from day-to-day operations at Microsoft in 2008, Mr. Gates has devoted much of his time to the foundation. He also runs Gates Ventures, a firm that invests in companies working on climate change and other issues. Over the decades, Mr. Gates shed the image of a ruthless tech executive battling the United States government on antitrust to be viewed as a global do-gooder. And he appears to be keenly aware of the stark contrast between the scale of his wealth and his role as a philanthropist. “I’ve been disproportionately rewarded for the work I’ve done — while many others who work just as hard struggle to get by,” he acknowledged in a year-end blog post from 2019.
told The New York Times last year. “There’s just none.”
“It was a constant tension point of the foundation. It was Warren who limited it, but Bill’s appetite is always, ‘We should do this, we should do this.’ Teams end up with this massive to-do list,” the former executive said.
Mr. Buffett acknowledged in an interview with The Times last year that he opposed institutional bloat. “That’s the one piece of advice I don’t shut up on, ever, because it’s the natural tendency of every organization,” he said.
Employees at the foundation often have to wear multiple hats to keep up with the demands. For instance, one staff member, Anita Zaidi, serves in the highly technical role of director of vaccine development and surveillance but also serves as president for gender equality.
Mr. Gates famously gave a TED Talk in 2015 warning about the global threat posed by contagious respiratory viruses. The foundation was packed with top talent working on developing new vaccines. It did not, however, have a single person out of roughly 1,600 staff members devoted full time to pandemics before the Covid-19 outbreak began.
For all the workarounds with contract employees and consultants, there was only so much bandwidth, and the decision was made not to have a dedicated team working on the matter. Instead the foundation threw its weight behind the Coalition for Epidemic Preparedness Innovations, which helped develop vaccines to combat outbreaks.
When the pandemic struck, the foundation put its resources and expertise to work. It has dedicated $1.75 billion to combating the pandemic so far and played a key role in shaping the global response.
Even without the divorce, the foundation was in the midst of change. Mr. Buffett, the third trustee, turns 91 this summer. Mr. Gates’s father, Bill Gates Sr., who was co-chair and a guiding hand at the foundation, died this past September. Some observers have wondered if the couple’s three children could get involved soon. The elder two are already in college and medical school. Others have raised the possibility that this is the moment to loosen the family’s grip and install a board drawn from professionals outside the inner circle.
Bill and Melinda Gates are divorcing after 27 years of marriage, raising questions about the fate of their vast fortune. Their split could yield the biggest divorce settlement on record, according to Forbes’s calculations, surpassing the $35 billion breakup of Amazon’s Jeff Bezos and MacKenzie Scott. Given the likely sums involved, what happens with the Gateses’ extensive investments and charity work will be monitored at the highest levels of government, business and the nonprofit sector.
What’s at stake: Mr. Gates is the fourth-richest person in the world, according to Forbes, with wealth estimated at $124 billion. The family is the largest owner of farmland in the U.S. His personal investment firm, Cascade Investment, owns big stakes in assets like the Four Seasons, the Canadian National Railway and the AutoNation chain of car dealerships.
The Gateses are believed to have a prenuptial agreement, but its details aren’t publicly known. The divorce petition notes that there is a separation contract in place.
The two have faced relationship struggles in recent years, Andrew, David Gelles and Nick Kulish report in The Times. Mr. Gates stepped down from the boards of Microsoft and Berkshire Hathaway in part to spend more time with his family.
What will happen to the Gates Foundation? The $50 billion nonprofit is one of the biggest philanthropies in the world, giving away about $5 billion each year to causes like global public health and childhood education. Most recently, it was instrumental in forming Covax, the global coronavirus vaccination program. For now, the foundation says little will change in how it is run day to day, but people in its orbit worry that an acrimonious split by its founders could cloud the nonprofit’s plans. “Together they have assured me of their continued commitment to the foundation that they have worked so hard to build together,” the foundation’s chief executive, Mark Suzman, told employees in an email.
When the Gateses created the Giving Pledge, an effort to get wealthy people to donate a majority of their money to charitable causes, they said they would commit to donate “the vast majority of our assets” to the foundation. Much of that money has not yet been donated.
Ms. Gates could separately become a big philanthropic force. She has already used her own investment office, Pivotal Ventures, to donate money to causes like women’s economic empowerment, and could use any settlement to amplify her giving to preferred groups. “You could imagine Melinda Gates being a much more progressive giver on her own,” said David Callahan, the founder of Inside Philanthropy. “She’s going to be a major force in philanthropy for decades to come.”
HERE’S WHAT’S HAPPENING
The Tristate area will reopen sooner than expected. The governors of New York, New Jersey and Connecticut said they would ease most Covid-19 capacity limits on businesses starting on May 19, thanks to declining coronavirus case numbers.
The Bill and Melinda Gates Foundation started with ambitions that, by its lofty standards today, appear almost quaint: providing free internet access to public libraries in the United States. As its founders’ objectives grew in scope, so did the foundation’s reach, until it achieved its current position as the pre-eminent private institution in global public health.
With 1,600 staff members directing $5 billion in annual grants to 135 countries around the globe, the Gates Foundation set a new standard for private philanthropy in the 21st century.
All of that was thrown into question on Monday when the world learned that the foundation’s co-chairs, who had been married for 27 years, filed for divorce in Washington State. Grant recipients and staff members alike wondered what would happen and whether it might affect the mission.
The message from the headquarters in Seattle was clear: Bill and Melinda Gates may be splitting up, but the Bill and Melinda Gates Foundation isn’t going anywhere. Their roles as co-chairs and trustees are not changing, and they will still set the agenda for the organization that bears their names. In an email on Monday, the Gates Foundation’s chief executive, Mark Suzman, reassured the staff that both Mr. and Ms. Gates remained committed to the organization.
observers noted that Ms. Gates had added her maiden name, French, to her Twitter profile.
The couple deployed their connections last year in response to the pandemic, calling leaders like Chancellor Angela Merkel of Germany and Crown Prince Mohammed bin Zayed of Abu Dhabi to drum up support for their plans. The foundation has committed $1.75 billion so far to its Covid-19 response, and played a key role in shaping the global deal to bring vaccines to poor countries.
That prominence has also brought a fair share of scrutiny, throwing a spotlight on Mr. Gates’s robust defense of intellectual property rights — in this case, specific to vaccine patents — even in a time of extreme crisis, as well as the larger question of how unelected wealthy individuals can play such an outsize part on the global stage.
“In a civil society that is democratic, one couple’s personal choices shouldn’t lead university research centers, service providers and nonprofits to really question whether they’ll be able to continue,” said Maribel Morey, founding executive director of the Miami Institute for the Social Sciences.
reported earlier by Bloomberg.
Before the news of the divorce broke, the Gates Foundation had been in the midst of a period of upheaval. The pandemic shuttered its headquarters in Seattle even as staff members drawn from the top ranks of government health agencies and the pharmaceutical industry worked to muster a response to the deadly, rapidly spreading new coronavirus.
And as his public profile during the pandemic grew, so did spurious conspiracy theories such as that the global immunization effort was a cover for Mr. Gates to implant microchips to track people, blatantly false but still damaging as misinformation increased vaccine hesitancy.
Then Mr. Gates’s father, Bill Gates Sr., also a foundation co-chair, died in September. The elder Mr. Gates had initially taken the lead on his son’s charitable endeavors while the younger Mr. Gates was still at the helm of Microsoft. Bill Gates Sr. was viewed by many as a calm voice and a moral compass within the organization, even as he had stepped back in recent years.
The third trustee, the billionaire investor Warren E. Buffett, turned 90 last year and has begun to discuss succession plans at his company, Berkshire Hathaway.
Dr. Morey said the recent changes could also present an opportunity to create a large, diverse board while increasing visibility into the foundation’s decision-making. “Part of the anxiety is coming from the lack of transparency in the day-to-day activities of the Gates Foundation,” she said.
Forbes estimates at $124 billion. The divorce won’t affect the money that has already been given to the foundation trust, but the couple may devote less money to it over time than they would have if they had stayed together.
“People are right to feel unmoored in terms of the direction of the foundation,” said Ms. Tompkins-Stange of the University of Michigan. “There’s a lot of ambiguity, as there might be in any divorce situation, but they seem committed to co-parenting the foundation.”
Bill and Melinda Gates, two of the most influential philanthropists in the world, said on Monday that they were divorcing.
The couple have together emerged as leading figures in the global fight against Covid-19, and their separation is likely to send shock waves through the worlds of philanthropy, public health and business.
The divorce will create new questions about the fate of the Gates fortune, much of which has not yet been donated to the Bill and Melinda Gates Foundation. Mr. Gates, who co-founded Microsoft, is one of the richest people in the world, worth an estimated $124 billion, according to Forbes.
“After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage,” the couple said in a statement that was posted to Mr. Gates’s Twitter account.
This is a developing story. Check back for updates.
Will owning bitcoins become a status symbol — or a scarlet letter for a new generation of climate-focused investors wise to the challenges it poses?
The answer is complicated.
Bitcoin supporters say that estimates of its carbon footprint are overstated. And if the computers that mine and help transact bitcoins are attached to an electric grid that uses wind and solar power, they add, mining and using it will become cleaner over time.
“We believe that cryptocurrency will eventually be powered completely by clean power, eliminating its carbon footprint and driving adoption of renewables globally,” Mr. Dorsey of Square said in a statement as part of a commitment for his company to be net-zero on carbon emissions by 2030. The company committed $10 million to invest in new “green energy technologies within Bitcoin mining, and aims to accelerate its transition to clean power.”
On this point Mr. Gates, who considers himself a Bitcoin skeptic unrelated to the climate issues, says it is possible that the challenges could be overcome, but he wasn’t convinced just yet.
“If it’s green electricity and it’s not crowding out other uses, eventually, you know, maybe that’s OK,” he said.
Several companies are working on some counterintuitive ideas to turn Bitcoin green. On Monday, Seetee, an investment company involved in cryptocurrency, said it planned to invest in Bitcoin “mining operations that transfer stranded or intermittent electricity without stable demand locally — wind, solar, hydro power — to economic assets that can be used anywhere.”
In other words, the company plans to build wind and solar in places that might not be perfectly situated for the technology and will use the extra power to mine Bitcoin, making money in the process. “Bitcoin is, in our eyes, a load-balancing economic battery, and batteries are essential to the energy transition required to reach the targets of the Paris agreement,” the company said in its announcement.