Bill Gates, now working full time at his philanthropic foundation - the world's largest - says its assets lost 20 percent of the their value in 2008, but said spending would increase as it seeks to tackle global inequity ranging from education, to health issues.
The ex-Microsoft chief executive made remarks on Monday in his first annual letter from Bill and Melinda Gates Foundation. Comments ranged from pleas to governments regarding foreign aid in a time of fiscal crisis, to comments about how the downturn has affected his philanthropy.
Crisis hits foundation
The assets of the foundation itself lost about 20 percent in 2008, he said, however he considers this better than most endowments.
He said that his foundation had been spending the legally required 5 percent of its asses every year in addition to a gift from his friend and businessman Warren Buffett. Spending was $3.3 billion in 2008 and will increase to $3.8 billion in 2009, about 7 percent of the foundation's assets.
Although spending at this level will reduce the assets more quickly, the goal of our foundation is to make investments whose payback to society is very high rather than to pay out the minimum to make the endowment last as long as possible, he said.
Short-term setbacks, long term development
Gates said he believed the effects of the crisis would last longer than two years.
If you take a longer timeframe, such as five to ten years, I am very optimistic that these problems will be behind us, he wrote.
Gates believes innovation in every field is moving forward at a pace to bring real progress in solving big problems, saying this will reinvigorate the world economy.
Government's responding to the crisis should protect improvements in K-12 education and state funded two-ear and four-year colleges, he said, noting he was impressed with President Barack Obama's efforts to do both.
He also sees foreign aid spent wisely as a smart thing. He hopes the U.S. and other rich countries continue to increase aid. Looking forward to this year's G-8 conference of rich industrial nations, he urged the Italian government to reverse its policy of cutting its aid budget. He urged public awareness of the positive results of aid as a way to keep voter interest high.
He also addressed the rich.
I am impressed by individuals who continue to give generously even in these difficult times. I believe that the wealthy have a responsibility to invest in addressing inequity, he said.
Otherwise, we will come out of the economic downturn in a world that is even more unequal, with greater inequities in health and education, and fewer opportunities for people to improve their lives. There is no reason to accept that, when we know how to make huge gains over the long term.