As you can well imagine, June 15 was a magical day for education grant-seekers across the country: If you read the front page story in the August edition of eSchool News (“Ed to win with Gates, Buffett”), you know that billionaire investor Warren Buffett announced he would begin giving his fortune away to five foundations now, rather than waiting until his death. And, the recipient of the biggest chunk of his donation will be the Bill & Melinda Gates Foundation, which has championed education reform.
What makes this gift so incredible is the dollar amount that will be added to the assets of the Gates Foundation on an annual basis. Although some articles have identified the gift as having a value of $31 billion, it’s hard to know what the actual amount will be at this point. That’s because Buffett has committed to giving a specific number of shares of Berkshire stock to the Gates Foundation and four others each year. The value of this gift will fluctuate depending on the stock’s value at the time. Based on its value today, the gift is worth about $31 billion–but if the stock’s value goes up, as Buffett has said he hopes it will, the actual value of the entire gift could be a staggering amount over the next few years.
There is an interesting stipulation to this gift, which will have a significant impact on the grant-making potential of the Gates Foundation. According to Buffett, the Gates Foundation will have to spend, annually, the full dollar amount of his contribution–as well as the amount it is already giving from existing assets. This is somewhat unusual in the world of private foundations, as most foundations do not spend the entire amount of their contributions in a given calendar year. This stipulation will force the Gates Foundation to award larger gifts, give more grants, or a combination of the two.
It will be fascinating to see what impact Buffett’s gift will have on the education grant-making of the Gates Foundation. If you visit the foundation’s web site, you’ll notice most of the grants that have been given to date are for large sums of money–and they are intended to have an impact on numerous schools in the same district or, in some cases, an entire state. There are few grants given to isolated schools serving small numbers of students.
If you’d like to be one of the recipients of the new grant monies and you don’t come from a large, urban school district, I would encourage you to start discussions with your state education department. Try to come up with a statewide initiative that could impact all of the students in your state, not just those in your district.
Review the values of the Gates Foundation and the letter from Bill and Melinda Gates that can be found on the web site, as well as the information that is included about the foundation’s education initiatives. You will see that the Gates Foundation is currently supporting high-school reform efforts, so be sure your initiative falls under this area of interest. Further reading of the information shows that the Gates Foundation is looking for strong partnerships between the private and public sectors, so a statewide initiative should have a nice variety of powerful collaborators involved. I would also encourage you to contact the foundation’s current grantees and ask them about their experience in securing funding.
Keep your eyes and ears open over the next few months (and years) to see what changes might occur to the Gates Foundation’s grant-making activities in light of this new contribution. You might also want to take a look at the Susan Thompson Buffett Foundation, which, according to an article in Fortune magazine, plans to “expand into public education” as a result of the additional funds it will receive from Buffett’s decision.
Bill & Melinda Gates Foundation
Susan Thompson Buffett Foundation