Earlier this month, a Colorado-focused funder called the Gates Family Foundation (no relation to that other Gates foundation) announced a $100 million gift to advance stem cell and gene therapies for cancer and other ailments. The money is going to the University of Colorado Anschutz Medical Campus, and the university is matching the gift with $100 million of its own, establishing a new Gates Institute that will focus on translating the laboratory science into the clinic, that is, into actual treatments for patients.
The Gates gift is, of course, interesting and exciting for its potential to advance regenerative medicine and bring about a new era of treatments for serious disease. What was also interesting about the gift — the single largest in the foundation’s 76-year history, and a sizable chunk of its approximately $630 million endowment — was that it came from a foundation that doesn’t name medical research among its primary areas of giving. The foundation’s website cites three strategic priorities for Colorado’s people and lands: educational equity for kids, natural resources, and vibrant communities.
So why such an enormous gift to leading-edge medical research? It’s a function of how the foundation enables the fourth generation of Gates family members to follow their philanthropic interests, while simultaneously running a professionalized foundation steered in part by community members. It also demonstrates 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. got into industrial manufacturing in Denver, later establishing the Gates Rubber Company in 1919. Decades of growth and diversification followed — the company was renamed the Gates Corporation, and at one point, owned Learjet, before selling it to a British concern in 1996, ending Gates family ownership. The elder Gates and his son Charles C. Gates, and 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 losing focus.
“People in the family many years ago recognized that over time, the family would grow and get dispersed geographically, with interests around the country,” said Tom Gougeon, president of the Gates Family Foundation. The foundation’s endowment was substantial but not infinite, so “one way of trying to address that was to focus on Colorado as the place where the family’s roots are, and where the wealth was generated.”
The foundation is primarily operated by a staff of about a dozen philanthropy professionals, with a board consisting of a mix of Gates family members and trustees drawn from the community. The foundation now engages in a range of impact investing, program- and mission-related investments, along with capital and strategic grantmaking. It has driven and supported community development and many conservation-oriented projects, including water management, healthy forests and rivers, and land conversions.
The foundations within the foundation
Another key decision was the creation about 20 years ago of a handful of special funds — there are currently eight — that are technically within the foundation, but funded by and under the direction of Gates family members. The largest of these funds is the Gates Frontiers Fund, which was driven by family members Diane Gates Wallach and John Gates, daughter and son of Charles C. Gates, and grandchildren of Charles Gates Sr., the family patriarch.
Medical research has long been a philanthropic passion for Diane, as it was for her father, and the Frontiers fund had supported the CU Anschutz Medical Campus before, helping to build the Gates Center for Regenerative Medicine, which was established in 2006 with a 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 one of the prime sponsors of the regenerative medicine program at CU,” said Gougeon. “They’ve been investing in it for years and have paved the way to bring the talent and build the program and the research base, and the biotechnology manufacturing capacity, and all the elements of the program.”
While the Gates Frontiers Fund, like the other family funds at the foundation, are driven by family members, the foundation staff carries out the giving. “We essentially manage the assets of the family funds and use the infrastructure of the foundation to execute their philanthropic objectives.” Together, the eight family funds represent about half of the Gates Family Foundation’s total endowment value.
Gougeon believes the foundation’s hybrid approach — the family funds and the cooperative trusteeship, which has family members as well as representatives from the Colorado community rotating into and out of the board — has enabled the grantmaker to balance between long-term needs of Colorado and new interests that emerge.
“The family has encouraged us to keep evolving,” 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’re doing exactly what they were doing, we’re probably stuck. But the structure has also meant that there’s been consistency over time in the core interests and values of the foundation.”
