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Weekly UpdatesCredited with guiding the world's largest foundation during its infancy and being a someone not averse to taking risk, Patty Stonesifer announced she will be stepping down by 2009 as chief executive officer of the Bill & Melinda Gates Foundation.
Stonesifer, who receives no compensation as CEO, will be involved with co-chairs Bill and Melinda Gates in selecting the next leader and will remain at the foundation in a different capacity. The past two years, she was selected to The NonProfit Times Power & Influence Top 50, a list of executives selected for their impact on the charitable sector.
"When Bill and I set out to help ensure libraries in the U.S. offer free access to computers and the Internet, we turned to our friend Patty, whose management ability and effective leadership made her perfect for the job," said Melinda Gates. "More than a decade later, as we reflect on the progress and depend on the foundation team she built to continue and expand this work, we know enlisting Patty was one of the best decisions we have ever made."
Leaders in the nonprofit sector praised the former Microsoft executive for managing the intense growth of the foundation. Stonesifer, 51, in 1997 helped to create the Gates Learning Foundation. Three years later, it merged with the William H. Gates Trust to create the Bill & Melinda Gates Foundation. The Seattle-based organization is now the largest foundation in the world, with an endowment of $38.7 billion and more than 500 employees.
"Amidst such dramatic growth, there have not been any major cataclysmic events from within the foundation. There have not been any huge negative stories, scandals or problems, or should we say disputes that broke into the open," said Steve Gunderson, president and CEO of the Council on Foundations (CoF). "The biggest story here is that maybe there is no story," he added.
Stonesifer brought "a sense of order and focus, and real mission to the work there at a most challenging time based on the unprecedented growth and the size of their assets," said Gunderson, and "the real desire to focus those assets in specific ways that produce real outcomes" both domestically and internationally.
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"It went from a small kitchen table kind of foundation to a huge one in a very short time, and that is always difficult to manage and plan and try to get the right people and the right systems," said Elizabeth Boris, director of the Center on Nonprofits and Philanthropy at The Urban Institute in Washington, D.C.
Two years ago, billionaire Warren Buffett announced he'd be passing $30 billion of his fortune on to the Gates Foundation over time, and joined Bill and Melinda Gates as board members. Last year, he contributed more than $1 billion to the foundation.
Sara Englehardt, president of The Foundation Center in New York City, credited Stonesifer's unique for-profit experience. "It did take someone who had been in a place like Microsoft, which was a startup and became large, to figure out how you do the same thing with a foundation," she said. The foundation has changed and grown over time but has been able to do it "relatively well and relatively seamlessly," Englehardt said. "People have moved around ... and moved onto something else, and they've managed to do it without a huge number of false starts."
Stonesifer became the highest-ranking female executive at Microsoft Corporation, where she worked for eight years and first met Bill Gates. During her tenure, she ran Microsoft Canada, revamped Microsoft's product support operations, oversaw the consumer products group and served as senior vice president of the Interactive Media Division, where she managed 2,000 employees.
Englehardt also praised the foundation for its openness to experimentation. "Rather than thinking of it as being something that's been a direct line, they have experimented with things, seen how they've went, and made decisions about what they do next based on that and many of their experiments worked. Some of them they've re-engineered, and some things they've moved on from. I do think that, I hope, that that same way of thinking about how you manage this unique foundation in the world I hope they continue to think of themselves that way and find a new president who can do it that well."
The foundation came under scrutiny last year after a The Los Angeles Times report examined its investment practices, investing in companies that might be doing harm in the areas that the foundation seeks to improve.
Other foundations have explained that investments are "the money we have so we can do good," Englehardt said. "But they got it very quickly, particularly because they were doing work in some of the areas of the world where some of the damage was being done. That's a very good example of how they learn. They don't think they made it all up, they learn from other people, including the press," she said.
Foundation investment policies are an issue that's important not only to Stonesifer and the Gates Foundation but the entire sector, Gunderson said.
"Are they undoing with one hand what they're doing with the other hand," Boris said, adding that how they manage that will be an ongoing challenge.
Said Gunderson: "It's indicative again of some of the skill she has brought to trying to move a family foundation that has not been engaged in philanthropy, that has not had any kind of size, toward understanding the fact that they're not only into philanthropy but because of their size they are--by accident if not by intent--a marker that everybody else follows.
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"As a result, just the visibility and the awareness of that issue, there are hundreds if not thousands of other family foundations with three people as the board who are making investment decisions that it would be nobody's issue. But because this is the Gates Foundation, and because they are so big, it is obviously an issue," Gunderson said.
Over a period of time, Gunderson predicted, "the investments of every foundation will be very transparent and they will be open to public discussion ... Time will address this issue for Gates and for everybody else."
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