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Bill Gates, the philanthropist

Posted by isilanes on May 6, 2006

It seems that this year the prestigious prize Prí­ncipe de Asturias (precisely the International Cooperation Prize 2006), given by a Foundation lead by Prince Felipe (the son of the current king of Spain. Yes, we have a king… no comment) has been given to the Bill & Melinda Gates Foundation.

You can read about it in many places, e.g. the Fundación Prí­ncipe de Asturias site, a newspaper like El Mundo, or a news blog like menéame (all the links in Spanish).

Now, I am sick and tired of hearing this bullshit about “Maybe Microsoft is a bit on the dark side of the Force, but this Bill Gates fellow is not a bad guy after all. Hell, he gives away for charity a whole lot of money!”

This is false, for two reasons:

1) Giving away that much doesn’t have so much merit.

Bill Gates’ Supporter: He gives away so much money, he is Good.

Voice of Facts: False. He has so much money, that what he gives is not much.

BGS: Yes, but even as a percentage it is a lot. He gives away a x% of his income, and neither you nor me do it!

VoF: False. You and me spend 105% of our income paying our flat, our car, the gasoline, the food, the clothes… He is so rich that he could easily donate 75% of his possessions and still be so rich that he wouldn’t notice the difference.

Hence, comparing percentages of income is not fair, either. For most people, donating a 10% of their income amounts to the difference between having where to sleep tonight or not. That’s not exaggeration. That’s a fact.

BGS: OK then, but meritorious or not, he does give away an awful lot of money!

VoF: We get back to the first point. Maybe that money is peanuts for him, but that’s a lot in absolute terms. OK, true. But the whole point was to demonstrate how philanthropic Gates was!

2) For him that money is an inversion. It is well worth it in tax refunds and market revenues.

VoF: Did you know that Bill Gates saves a lot of money on taxes because of what he donates to his own “charitable” Foundation?.

BGS: That’s silly! If he gives away one billion, and saves x% in taxes, he would have been better of not giving away anything at all! How can donating be economically advantageous?

VoF: My friend, this is in our poor fellows’ world, not in the world of the super-rich. According to the merits the newspapers (see above) atribute to the Foundation, they have spent USD 10 billion since 2000. Now, according to the Wikipedia, as of 2005, they had USD 28 billion as endowment (that is, “money to spend”). According to US law, a foundation has to give away at least 5% of his assets, yearly, to be considered “charitable”.

If my math is not wrong, USD 10 billion since 2000 amounts to USD 2 billion/year, which is not much above the USD 1.4 billion/year that an endowment of USD 28 billion requires. If the Foundation had given away less than what they did, they would not even be considered charitable by the US government, so putting money into it would not ensure good ol’ Bill a tasty tax deduction.

Even if I try to put my best to it, I can not see why they don’t give away for charity all the money they “donate” to the Foundation. Either they give away the whole USD 28 billion, or they only put into the Foundation the USD 2 billion that they expect to give away! Oh, wait, maybe they get tax reductions for the USD 28 billion, but end up “losing to the poor” only USD 2 billion. How philanthropic!

Now, some people might say that the other USD 26 billion have indeed been “spent” by Gates… he also “lost” them. Not at all. The Foundation uses this money for many different things, most of which are beneficial for Mr. Gates. Look at that new at ZDNet Australia. In 2004, Gates offered the Australian government to spend:

“AU$40 million over the next five years to help improve technology literacy in under-privileged communities.”

However, Australian Democrats’ IT spokesperson Brian Greig calls this “tainted charity”, because:

“the software tycoon’s global philanthropy exercises carry a hidden agenda to persuade beneficiary governments to reverse policies promoting the use of open source software.

Greig claims Gates’ whistle-stop visit to the country was more likely to have been motivated by NSW Commerce Minister John Della Bosca’s intention to end the state government’s reliance on proprietary software.”

Graig recalls the case of India, where Gates spent USD 500 million in “charity” in 2002, after the government disclosed its intention of getting rid of proprietary software (that is, Windows). Of those USD 500 million, 100 where aimed at helping fight AIDS (highly commendable), and 400 to “improving computer literacy in the country.” (???). Craig’s words remind those of Sergio Amadeu, president of the Brazilian National Institute for Information Technology, who compared Gates’ strategy with that of drug dealers who give first doses for free, to get people “hooked”.

No wonder Microsoft’s lawyers sued Amadeu “for difamation”. However, the accusation hardly held any water, after Gates’ words regarding software piracy in China, in which he “difamated” himself:

“As long as they are going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade”.

In summary, the Bill & Melinda Gates Foundation is just a corporative arm of Microsoft, aimed at cleaning Gates’ bad reputation, spreading pro-MS propaganda, financing bribes to governments to perpetuate Windows use, and give free samples of their product to keep markets hooked, all of it under a charity mask.

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