Charity as Investment: Bill Gates and the Malaria Vaccine

A couple months ago I wrote a post about the recent pledge by Bill Gates and Warren Buffett to give away at least half of their riches to charity. In my post, I noted the potential of such charity while emphasizing that giving away your money is not necessarily as transformative as investing it for profit.

However, if one does decide to divert their resources to charity, the main focus of the discussion becomes centered on whether those resources are being allocated efficiently and effectively. 60 Minutes recently interviewed Bill and Melinda Gates about the targets of their charity, and their responses indicate that their efforts are not lacking in the realm of care and consideration.

You can watch the video here (HT David Henderson):

As the report indicates, the Bill and Melinda Gates Foundation has 850 employees, all of whom are hired to determine “which science or development projects are worthy.” This reminds me of the daunting task undertaken by John D. Rockefeller.

As I’ve already mentioned, we are bound to disagree on where and how we think certain resources should be allocated because we all see value differently. For example, as a Christian, I am particularly concerned with the limits of any charitable effort that is purely secular in its scope. But those arguments can be saved for another time.

What is most interesting about this interview is Bill Gates’ response to why they are focusing so many resources on developing a malaria vaccine:

Well, there’s a huge market for cancer drugs. And there’s dozens of pharmaceutical companies that spend tens of billions on those drugs. In malaria, when we announced a grant for $50 million, we became the biggest private funders. And so, the fact that it kills over a million children a year and yet has almost no money given to it, you know, that struck us as very strange. But it became the thing we saw, “Okay, this will be unique. We’ll take the diseases of the poor, where there’s no market and we’ll get the best scientists working on those disease.”

First, this serves as a prime example of why we don’t need government funding for potential innovations the market deems unprofitable. With that said, what’s even more interesting is that Gates seems to think other pharmaceutical companies are stupid (or “strange”) for not pursuing such a vaccine, even based on pure profit motive.

Gates himself may not be interested in any profits that may come with the development of a malaria vaccine, but his awareness of the transformative role his charity could eventually play in the market illuminates another valuable feature of charity that is often missed.

Bill and Melinda GatesCharity is not limited to being a “filler” for areas the market rightly ignores (e.g. church funding, soup kitchens, education, etc.). It can also serve as a means for achieving successes (and profits) in areas the market foolishly ignores. This is nothing new. In the case of Rockefeller, the innovations his charity spawned led to the emergence of innumerable for-profit enterprises.

The Gateses are investing lots of time, energy, and consideration into each innovation project, which tend to indicate that each effort has significant promise. We should remember that such promise is not only encouraging for the downtrodden, but for capitalist as well.

Image provided by Kjetil Ree [CC-BY-SA-3.0], from Wikimedia Commons

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