Foundation capital

A large research donation shows how a family foundation balances tradition and innovation

Earlier this month, a Colorado-focused funder called the Gates Family Foundation (no connection to this other Gates foundation) announced a $100 million donation to advance stem cell and gene therapies for the cancer and other ailments. The money is going to the University of Colorado Medical Campus in Anschutz, and the university is matching the donation with $100 million, creating a new Gates Institute that will focus on translating science from the lab to the clinic. that is to say in real treatments. for the sick.

The Gates gift is, of course, interesting and exciting for its potential to advance regenerative medicine and usher in a new era of treatments for serious diseases. What was also interesting about the gift — the largest in the foundation’s 76-year history and a significant part of its roughly $630 million endowment — was that it came from a foundation that doesn’t does not mention medical research among its main areas of donation. . The foundation’s website cites three strategic priorities for Colorado people and land: educational equity for children, natural resources, and vibrant communities.

So why such a huge donation to cutting-edge medical research? It depends on how the foundation enables the fourth generation of Gates family members to pursue their philanthropic interests, while simultaneously managing a professionalized foundation run in part by community members. It also shows how the foundation balances its core mission with emerging needs and concerns.

The Gates family traces its wealth back to the early years of the 20th century, when Charles Gates Sr. moved into industrial manufacturing in Denver, then established the Gates Rubber Company in 1919. Decades of growth and diversification followed – the company was renamed Gates. Corporation, and at one time owned Learjet, before selling it to a British company in 1996, ending Gates family ownership. The eldest Gates and his son Charles C. Gates, along with other family members, had established the Gates Family Foundation in 1946 to benefit the state of Colorado. Family members ran the foundation, but over time the family grew and realized that the foundation was in danger of going off course.

“Many years ago, family members recognized that over time the family would grow and disperse geographically, with interests across the country,” said Tom Gougeon, president of the Gates Family Foundation. The foundation’s endowment was substantial but not endless, so “one way to try to solve this problem was to focus on Colorado as the place where the family’s roots are and where the wealth was generated.”

The foundation is primarily managed by a team of around a dozen philanthropy professionals, with a board made up of a mix of Gates family members and community-dwelling trustees. The foundation now engages in a range of impact investing, program and mission-related investing, as well as capital and strategic grantmaking. He has led and supported community development and many conservation-oriented projects including water management, forest and river health, and land conversion.

The foundations within the foundation

Another key decision was the creation some 20 years ago of a handful of special funds – there are currently eight – which are technically within the foundation, but funded by and under the direction of family members. Gates. The largest of these funds is the Gates Frontiers Fund, which was led by family members Diane Gates Wallach and John Gates, daughter and son of Charles C. Gates, and grandchildren of Charles Gates Sr., the patriarch of family.

Medical research has long been a philanthropic passion for Diane, as it was for her father, and the Frontiers Fund previously supported the CU Anschutz Medical Campus, helping to build the Gates Center for Regenerative Medicine, which was established in 2006 with a grant. gift from the Gates Family Foundation. The recent $100 million donation to create the new Gates Institute will build on research and work pioneered by the university’s Gates Center.

“The Frontiers Fund has really been a major sponsor of CU’s regenerative medicine program,” Gougeon said. “They’ve been investing in it for years and have paved the way to bring in the talent and build the program and the research base, and the biotech manufacturing capability, and all the elements of the program.”

While the Gates Frontiers Fund, like the foundation’s other family funds, is managed by family members, foundation staff handle donations. “We primarily manage the assets of the family funds and use the infrastructure of the foundation to execute their philanthropic goals.” Together, the eight family funds represent approximately half of the total endowment value of the Gates Family Foundation.

Gougeon believes the foundation’s hybrid approach – family funds and cooperative trusteeship, which includes family members as well as Colorado community representatives moving in and out of the board – enabled the donor to balance Colorado’s long-term needs with emerging interests.

“The family has encouraged us to keep growing,” he said. “We shouldn’t be doing what people were doing 40 years ago; we live in a very different world now, so if we did exactly what they did, we’re probably stuck. But structure has also meant that there has been consistency over time in the foundation’s core interests and values.