In October 2006, our trustees created a two-entity structure. One entity, the Bill & Melinda Gates Foundation, distributes money to grantees. The other, the Bill & Melinda Gates Foundation Asset Trust, manages the endowment assets. This structure enables us to separate our program work from the investment of our assets.
How the asset trust works
The asset trust holds the endowment, including the annual installments of Warren Buffett’s gift, and funds the foundation. Bill and Melinda are the trustees for the asset trust, and the endowment continues to be managed, as it has been for more than 10 years, by a team of outside investment managers.
The role of the foundation
The foundation conducts all operations and grantmaking work and is the entity from which all grants are made. Bill, Melinda, and Warren are the trustees for the foundation. Warren has no involvement in the investment of the endowment through the asset trust, including decisions that might be made regarding Berkshire Hathaway Inc. stock.
Because Bill, Melinda, and Warren believe the right approach is to focus the foundation’s work in the 21st century, we will spend all of our resources within 20 years after Bill's and Melinda's deaths. In addition, Warren has stipulated that the proceeds from the Berkshire Hathaway shares he still owns upon his death are to be used for philanthropic purposes within 10 years after his estate has been settled.
The decision to use all of the foundation’s resources in this century underscores our optimism for progress and determination to do as much as possible, as soon as possible, to address the comparatively narrow set of issues we’ve chosen to focus on.