The two biggest philanthro-capitalists pushing the top-down “business model” of public school reform, are both in trouble. Their model, it seems, doesn’t even work very well for business.
Back in 2007, billionaire philanthropist Eli Broad boasted to the New York Times:
"What smart, entrepreneurial philanthropists and their foundations do is get greater value for how they invest their money than if the government were doing it."
Broad then, was on the board of AIG which lost $62 billion in the last quarter alone and went begging for another gigantic government bailout. To put that in context, AIG lost more in just 92 days than the total spent on the federal relief effort following Hurricane Katrina. I guess Broad and his partners at AIG must have had an attitude adjustment.
The Gates Foundation’s investments have also taken a beating during the current market crash. But no need to pass the hat just yet. The $30 billion fund (not counting Buffet’s additional $30 billion) invests 95% of its holdings in mainly blue chip stocks. Can’t go wrong there—right?
Well a big chunk of that dough was put into the failed Washington Mutual and AIG stocks. But Gates was somehow able to pull his money back out of AIG just before it bottomed out. Whew! Just lucky, I guess.
Now the foundation is heavily into (non-green) companies like Caterpillar, Exxon, Coca Cola and McDonald’s. Hope they do better. Schools and malaria victims are (unfortunately) depending on it.