May 9 (Bloomberg) — The Gates Foundation, which the Gateses founded, has been critical in the midst of the epidemic. Now the parties have announced their impending divorce, which is not only shifting their personal lives, but their roles in philanthropy as well.
When the outbreak hit last March, the Gateses were living in seclusion at their home on the shores of Lake Washington, rarely going outside. They continued to run the Gates Foundation from their home, video-chatting with world leaders about vaccine distribution.
For the couple, spending so much time at home was a sudden change. “Working from home – I don’t think we were really prepared enough personally,” French Gates (as she is now more used to being called than Melinda Gates) said last October.
In a November podcast, Bill Gates (Bill Gates) also talked about how he has adapted to life at home. “My life has completely changed,” Gates said. “It’s very dysfunctional.”
This week, the Gateses announced they would be dissolving their marriage. The foundation staff was surprised by the news. That’s because a large part of the foundation’s influence lies not only in the billions of dollars they have donated, but also in their public standing and relationships.
Over the years, the couple had built a tightly knit but distinct world, cultivating sometimes overlapping personal interests through separate channels. Frankie Gates has spent more time supporting women’s issues, and Bill Gates has pursued clean energy projects. Even within the foundation, each of them has their own areas of focus.
“Institutionally, the foundation has digested that separation,” says philanthropy expert Benjamin Soskis. “They each have their own areas of interest. It’s not a matter of a unified entity suddenly breaking up.”
The foundation says nothing will change. It will continue to have a $50 billion endowment and address a range of important issues. But with both Bill and French having their own projects (Gates Ventures as well as Pivotal Ventures), there is concern within the foundation that it may no longer be at the center of their work.
“If you have ventures, there’s a perception that the foundation is slow and in a development rut,” says a former foundation staffer, “whereas if you’re working full time for the foundation, you think, ‘We’re doing real work, and these cowboys are just rushing in at the last minute and asking for things to change.'”
With the youngest child about to graduate from high school, several close friends believe this is also usually a time when couples reevaluate their relationships with each other and when many partners go their separate ways. It’s probably no coincidence that the couple made the announcement just days after Warren Buffett, the foundation’s third trustee, held his annual shareholder meeting. “They wanted Warren to wait until after the annual meeting to deal with it,” said one colleague.
In the past few years, there has been little apparent disconnect between the Gateses, at least in the public eye. The two sides have always appeared together at various Microsoft events, including an annual dinner for the CEO and other executives at their home each spring.
But Frankie Gates has hinted that she sometimes feels neglected when she is with her husband. She has said, “When I stand next to Bill and talk, it makes it hard for me to be heard. I’ve struggled to find my voice.” One person who knows her says it was clear at the Giving Pledge and other public events that she wasn’t happy.
People at the foundation were even more surprised. “After such a difficult year, people feel more like they’ve taken a hit,” said one longtime foundation executive, adding that everyone is now asking how this will affect the foundation’s growth. “With so much disagreement already, how can we be sure it won’t get worse?”
In late 2012, Frankie Gates asked to work with her husband on the annual open letter to the foundation.
“I thought we were going to kill each other,” states French-Gates. “I thought, ‘Well, this could end the marriage on the spot.'”
But the open letter, released in January 2013, was still signed by Gates alone.
“I told him that there were issues where my voice could have an impact, and that in those cases I should speak alone, or with him,” French-Gates wrote. “We both got angry. It took us a long time to come to an agreement.”
How the couple will work together on common projects such as the annual open letter, the giving pledge and the foundation’s voice after the divorce remains an open question.
When the foundation was formally established more than two decades ago, Frankie Gates played a larger role in managing it than her husband, who also needed to devote more energy to Microsoft. Nonetheless, she initially steered clear of public roles, leaving the speeches and appearances to Gates. “I wanted to work behind the scenes,” she wrote, noting that she wanted to protect her privacy.
But things changed after Buffett made a huge donation in 2006. He announced he would give $31 billion to the Gates Foundation. In her speech for Buffett’s gift, Frankie Gates represented the foundation for the first time at a press conference and gave a speech. She called that moment a turning point that made her want to play a more important public role.
In 2008, Gates announced that he was stepping down from his full-time job at Microsoft and said he would devote himself to the foundation.
That very year, Gates quietly started a new company in Washington state called bgC3 LLC, responsible for projects unrelated to both Microsoft and the Gates Foundation. There, he incubated work on climate change and clean energy; in 2018, Gates renamed the organization Gates Ventures, and in 2015, French Gates founded Pivotal Ventures, which focuses on gender equality and social progress.
Former Foundation insiders point to another factor driving Gates and French-Gates’ respective actions: the Foundation’s understaffing.
“It was a constant point of tension for the foundation. It was Warren who limited the number of people, but Bill’s appetite was always ‘we should do this and that.’ The team had too much on its to-do list,” the former foundation executive said.
Buffett admitted last year that he was against institutional bloat. “That’s one piece of advice I’ll never shut up about, because it’s a natural tendency of every organization,” he said.
Foundation employees often have to wear multiple hats to keep up with demand. Before last year’s outbreak, not one of the roughly 1,600 staff members worked full-time on the response.
Even if the couple hadn’t divorced, the foundation was in a state of flux. A third trustee, Warren Buffett, will turn 91 this summer. Gates’ father was co-chairman of the foundation, but died last September. Some observers are wondering if the couple’s three children will soon be involved.
“It’s a family foundation. Hanging on to Bill and Melinda’s name means that whenever something changes, there’s a ripple effect,” the former executive said. “Now that the changing relationship takes center stage, it makes it seem like there’s always going to be more uncertainty created in an organization that’s always uncertain.”
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