The Bill & Melinda Gates Foundation has launched a $400 million social investment fund that will provide loan financing, underwriting and equity investments for not-for-profit organizations and businesses with a social purpose. Investments will be in areas that support the foundation’s goals, including investing in businesses and charities providing health and development services and offering support to small businesses in the developing world.

According to a Gates spokeswoman, the foundation will run a two-to-three-year pilot, after which time it might expand the amount of money available for social investment. It expects to make investments of $2 million or more, and anticipates that the first one will be made by the end of the year. ‘We’re also working with a range of partners. We hope to leverage our investment by attracting others to invest alongside us.’

The news comes on the heels of a story in the Seattle Times, reported in the Alliance October eBulletin, of the Gates Foundation moving into programme-related investments and divesting itself of some of its pharmaceutical and healthcare holdings. This signalled what seemed like a change of tack, as the spokeswoman acknowledged: ‘Traditionally, we’ve given money away in grants, so this is a change in our behaviour.’

Sources
Third Sector Online, 2 October 2009
Seattle Times, 20 September 2009