It is the mythical man-month applied to charity. It takes time to get results, adding more money doesn't help.
Nobody wants that much cash in one lump sum, they want an anual income. If you give me my anual income (including benifits and supplies) and I can quit my current job to do charity work. If instead you were to give me a billion dollars, I can still quit my job to do charity work, but this time I'll be doing it from a very nice yacht or something else.
Money to charity is the same way: you are much better off funding a smaller amount over the years (as opposed to some other job they could do instead) than giving them money, either they waste the money - even prudant investing of money is a waste since it takes away time that could be used on the thing you want the charity to do.
Mm. Makes me realize the mythical man-month is also a good counterargument to the "superhuman AGI is imminent" predictions. The correllary in AI:
It takes time to get intelligence, adding more cycles doesn't help. For all the same reason throwing more money at programming problems doesn't make them go away.
Hmm I think it's probably better to get the lump sum and operate off interest. Even 1% of $50 billion yearly is $500 million. I think the foundation could manage to exist off that.
The problem might be solved - what should a charity dedicated to smallpoxs do with their 50 billion?
A good charity today might not be good tomorrow. Today they pay their officers a reasonable sum and the rest goes to scientists who get a reasonable sum. Next year they fire all scientists but one (the officers brother-in-law), and give everyone a massive raise. Science still gets done - just enough to stay legal.
I don't know why, but I always worry when I see huge donations that poor management will see most of the money end up devious hands. But I imagine with that much money, there's a ridiculous amount of attention as to where it's going, and plenty of good people willing to manage it. But I assume everything is The Big Short and House of Cards out there.
Bill Gates puts just as much effort into making sure his charitable endeavors are using their funds efficiently as he did in making sure Microsoft spent wisely.
So in general I think your fears may be well founded, but I don't believe so in the case of Bill Gates donations.
Zuckerbergs hundred million to Camden NJ was squandered. Too much money too soon. Plus a corrupt organization. Plus no one really knows how to make minority schools better. Its not from lack of trying.
I think this is exactly what I fear. No matter how much money we raise for curing cancer, it's not necessarily going to give us the cure for cancer. And now we have "charities" like Komen that exist purely to virtue signal while everyone's driving Bentley's. There's so much corruption out there, especially places like Africa where I know Gates has given a lot of love.
I think it's the opposite: you get $100/month and that is the only money you will ever get for that month to live off of, you will probably be very careful how it is used. But if you get $1 million a month you may be less careful
Probably because 1) he donates shares (instead of cash) due to tax reasons, and 2) the receiving party needs to sell the MSFT shares to end up with cash.
If he donated his entire stake at once, and everyone started selling, that wouldn't be good for the share price.
That's called a sale. Unless for some reason, Gates took a loan instead, which would be kind of a pointless way to give part of his net worth to the bank in the form of interest.
For some amount of time, sure. But at some point you have to pay off the loan, presumably by selling the collateral, at which point your taxes still come due and you've also paid a bunch of interest. This only makes sense if you believe the stock will increase in value enough to exceed the interest paid.
If you're actually donating the stock (or the full proceeds from the sale), I'm not sure what the tax implications are anyway. You get a write off for the value of the donation, which will by necessity exceed the value being taxed. I think you actually come out ahead. But I'm no tax expert.
Also, maybe they can’t utilize all that cash at once. Therefore it would be best to be illiquid until you need the liquidity.