Gates learns that being a poster child cuts both ways

The Bill and Melinda Gates Foundation has just been placed squarely in the bulls-eye of what has been a quietly-growing debate in the foundations world about mission-related investing of those big endowments. It's the same set of choices that hit home a while back for universities: is the highest investment duty to maximize returns and hence resources for the non-profit mission, or to accept lower returns (or higher risk) in exchange for the investing itself advancing the mission? Or at least not actively violating it?

The two long articles linked above appeared on the front page of the L.A. Times yesterday and today and are being picked up far and wide by newspapers owned by their parent Tribune Company. Many readers will be appalled to learn how many examples there are of Gates money going into stock of companies which are helping cause the very problems that the foundation is attempting to ameliorate with grants.

I have little doubt that most of the specific facts as presented are correct, and I'm not one of those who thinks that trying to balance investment success and mission purity has to mean "doing neither of them well." However the lead human-interest example of the second story is oddly unconvincing (a middle-class couple who got ripped off by a fast-talking mortgage salesman because they couldn't be bothered to read the loan documents they signed). And the newspaper committed several fairness and logic violations.

For example it is obviously just sensationalism to repeatedly list the Gates Foundation's asset value as $67 billion with a footnote that this figure includes the future expected Warren Buffett contributions (whereas the other endowments they compare Gates to are listed at present value). They mix and match examples which are obviously not comparable on merit. Also when rattling off horrible-sounding corporate behavior that Gates money has helped enable they seem to have completely lost track of that pesky distinction between being charged and being convicted (which some musty historical document or other mentions in passing right before some silliness about freedom of the press).

But for all that the core issue is real and foundations need to deal with it. And being by far the biggest such venture in world history, whatever its correct endowment total right now, means that Gates can't just ignore this kind of question. Hopefully someone who has their ear is explaining that right now to Bill, Melinda and Warren.