Inside the Gates Divorce Fallout

Bill And Melinda Gates
(Photo by Win McNamee/Getty Images)

The Gates Foundation, or simply The Foundation as it’s known in Seattle, is one of the world’s most venerated institutions, and for good reason. The $50 billion philanthropy, after all, has been at the vanguard of the global pandemic response, with a bank account exceeding the G.D.P. of half the world’s governments. It’s been a generally prestigious place to work, a visionary organization haloed by Bill and Melinda French Gates, who literally created the model for a whole generation of social entrepreneurs.

Recently, however, The Foundation has been dragged into the muck via a series of unpleasant news events: allegations of Bill Gates’ proximity to Jeffrey Epstein, and the surprising revelation of the namesake couple’s separation, which was accompanied by the sort of dishy blind-sourced stories—with leaks and counterleaks—that usually follow the conscious uncoupling of the ultra-wealthy. The dissolution of any multi-billionaire marriage is never an easy legal or social unwinding, but it has certainly been exacerbated in this case by speculation about the fate of the Gateses’ shared philanthropic heirloom. It’s rare that charities are thrust into the center of a tabloid maelstrom, but such is life when so many people around the world depend on one couple.

Naturally, this all has transformed the Foundation from a place that idolizes mom and dad as do-gooder extraordinaires into a place where some people are dreaming of vacations after a difficult few months of parental distractions.

The Gates Foundation has pledged all along that the divorce wouldn’t change anything. “No changes to their roles or the organization are planned,” read an early announcement. But some former Gates hands I talk to have long doubted that could be true, and I have shared their skepticism since the day the separation was announced. Divorces take unexpected turns, and people—even employees—can take sides. Current employees have held concerns about the future of their work: Can international institutions, drugmakers, and NGOs still depend on the Gateses’ largesse?

On Wednesday, The Gates Foundation announced a series of changes that seemed to answer a few of these lingering questions. Bill and Melinda committed to pledging another $15 billion more to the organization. They also socialized a plan under which Melinda could step aside from the Foundation in two years if their partnership proved untenable. As a former Gates Foundation executive put it to me yesterday upon reading the news: “This is not the Bill and Melinda Gates Foundation. It’s the Bill Gates Foundation.”

The disclosure of a possible escape hatch didn’t exactly reassure employees, given that matters will now remain unresolved for two more years. And so on Thursday, Gates Foundation C.E.O. Mark Suzman fielded a number of pre-submitted questions about the changes. An audio recording of the all-hands session was passed on to me. Not surprisingly, the separation of private life and philanthropy was very much on the minds of Foundation employees this morning. The Gates Foundation didn’t return a request for comment.

The session took place over an hour and generally consisted of the sort of thoughtful and concerned inquiries that you might expect from people who have devoted their lives to mission-driven causes and now worry about what will come next.

“What would you say to those of us concerned and nervous about how Bill and Melinda’s divorce will impact our work, our mission, our culture, our employment?” asked one questioner. Replied Suzman in his South-African accent: “Nervousness is understandable. This is a moment of change. It’s been uncertain with news. I promise—at least I hope, I won’t make it a promise—but of the news that I have any knowledge about, this week’s is the last.” He continued: “I am not anticipating and I’m not aware of any other announcements, until such time as we come and announce the new trustees.”

Employees likely took that with a grain of salt: Suzman, a longtime foundation insider, was in the dark about the divorce until the day before it was announced. Notably, he made sure to describe the lack of forthcoming revelations as a hope, not a promise.

Still, he tried his best to reassure them: “The central element is the mission is unchanged. The strategies are unchanged. One of the points with the new $15 billion commitment is this is not for new bodies of work. It is not to make extra changes.”

Suzman, a former journalist, extemporized (correctly) that the media would misinterpret moves by the Gateses over the next few months as harbingers. “In terms of Bill and Melinda themselves, obviously there’s some uncertainty. And I’ve been warning people—you’ll see that there will be massive over-reading of events. When Melinda next does an event about women in tech, I’m sure they will say, look, it’s a Pivotal [Ventures] event! She’s not focusing on Gates Foundation issues!” Suzman acknowledged that the same goes for when Bill Gates works on his energy portfolio through his own personal office, Gates Ventures.

In order to demonstrate that the estranged couple can work together just fine, Suzman also revealed that, as recently as this morning, Gates and French Gates had signed off by email on a commitment for new programming. “They’ve shown already in the two months since that they can work together and are working together very constructively. In fact, just this morning, on email, they’ve both now approved a new polio outreach strategy in the United States that Rob Nabors and team with the polio team have been working on,” Suzman relayed. “I genuinely have every confidence that they not only can, but are working extremely well together, are committed to the long term to work together as co-chairs and trustees, and see this is a sort of shared passion.”

In the aftermath of the divorce, one of the key unanswered questions has been whether Bill and Melinda still plan to wind down their philanthropy within 20 years after both of them have died. That had been their prior commitment—they didn’t want to create a foundation that exists forever and is run by their kids—but the divorce could have changed their posture. When one employee smartly asked specifically about any changes to the sunset clause, Suzman answered succinctly, “No.”

He continued: “We are not a perpetuity foundation. That is absolutely not changing. That is still the full intent and commitment of both co-chairs. They’ve always said they want this foundation to be focusing on issues and topics that they are able to prioritize and set the direction, and then they expect future philanthropists to be engaging on future issues.”

The only moment in which Suzman seemed audibly piqued was while reading a question about Warren Buffett’s decision to depart the board last month. “Given Warren’s departure and the increase in funding, how soon do we plan to roll back the headcount cap?”

This question “frustrated” Suzman more than any other, as he would acknowledge. Buffett long prioritized his view that The Foundation should never get bloated. And, Suzman noted, he often “called out” the organization about its expanding headcount as its ambitions grew. Naturally, this was a source of contention for Gates Foundation employees, who were often asked to do more with less.

Suzman first disagreed with the premise that Buffett had “departed” at all: “Again, let me be emphatic: Warren is still a primary donor to this foundation. The fact that he’s a trustee. He’s given us $33 billion. And he has strong views about how we should operate.” He also argued: “We have actually expanded our headcount in the last couple of years. Significantly, in acknowledgement of the fact that our payout has increased.”

But he also recognized that the mandate had been imperfect. “We have agreed that one of the unintended consequences of the headcount cap was to create new bodies of work without additional headcount. There is certainly not going to be any floodgates opening on headcount on my watch—which I’ve assured Warren. It was one of the things he was most concerned about in stepping down. But we’re going to be smart and sensible going forward on this.”

Losing Buffett is just one piece of a broader (and, frankly, badly needed) governance overhaul: More board members are anticipated by early next year, but only a few. “Don’t expect a very large board,” Suzman told his team.