Like most philanthropies, the Gates Foundation gives away at least 5% of its worth every year, to avoid paying most taxes. In 2005, it granted nearly $1.4 billion. It awards grants mainly in support of global health initiatives, for efforts to improve public education in the United States, and for social welfare programs in the Pacific Northwest.
It invests the other 95% of its worth. This endowment is managed by Bill Gates Investments, which handles Gates' personal fortune. Monica Harrington, a senior policy officer at the foundation, said the investment managers had one goal: returns "that will allow for the continued funding of foundation programs and grant making." Bill and Melinda Gates require the managers to keep a highly diversified portfolio, but make no specific directives.
By comparing these investments with information from for-profit services that analyze corporate behavior for mutual funds, pension managers, government agencies and other foundations, The Times found that the Gates Foundation has holdings in many companies that have failed tests of social responsibility because of environmental lapses, employment discrimination, disregard for worker rights, or unethical practices.
One of these investment rating services, Calvert Group Ltd., for example, endorses 52 of the largest 100 U.S. companies based on market capitalization, but flags the other 48 for transgressions against social responsibility. Microsoft Corp., which Bill Gates leads as board chairman, is rated highly for its overall business practices, despite its history of antitrust problems.
In addition, The Times found the Gates Foundation endowment had major holdings in:
* Companies ranked among the worst U.S. and Canadian polluters, including ConocoPhillips, Dow Chemical Co. and Tyco International Ltd.
* Many of the world's other major polluters, including companies that own an oil refinery and one that owns a paper mill, which a study shows sicken children while the foundation tries to save their parents from AIDS.
* Pharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat.
Using the most recent data available, a Times tally showed that hundreds of Gates Foundation investments -- totaling at least $8.7 billion, or 41% of its assets, not including U.S. and foreign government securities -- have been in companies that countered the foundation's charitable goals or socially concerned philosophy.