I have several thoughts about Warren Buffett’s decision to double the size of the Gates Foundation by contributing $30 billion of his fortune to it. First, it’s his money, and he can do with it as he pleases, although I wish he would support the repeal of the estate tax so that others with much less wherewithal to shelter their fortunes from this confiscation could have as much flexibility in their planning. Second, the resulting $60 billion foundation now becomes the 800-pound gorilla in the entire scheme of American philanthropic institutions and, while that might not be a bad idea in the short run, it gives one pause to consider what might be the result if future managements of this behemoth were to follow the paths of Ford, MacArthur, et al, in becoming champions of social engineering and other leftist impulses. My third observation is that, given my interest in education reform, I have some familiarity with the Gates Foundation’s initiatives in reforming the American high school, and I will be watching closely to what extent the additional Buffett resources will be used to help truly change the public education system. For it is here that the most dynamic results are possible, provided the funding is used not in incremental tweaking of the status quo, but in systemic transformation of the perverse incentive structure that is so deeply embedded in public education at every level. There is a model here, and it’s not one to emulate. The fortune of Walter Annenberg was largely unwisely invested in the 1990’s in attempting to replicate successful schools across the country, while not realizing that it is the system that must be overhauled and that it is competition that usually drives the replication of successful practices.
