The business of philanthropy has come of age

With the news that businessman Warren Buffett will give $37bn to enable Bill and Melinda Gates to run the world’s largest charitable foundation, philanthropy has now emerged as big business. The Bill & Melinda Gates Foundation, already a major player on the global health scene, is set to become even more powerful.

Charitable giving used to be seen as dropping coins into the collector's tin or the issuance of modest cheques to support the causes we believed in. Organised philanthropy is altogether different, a business of central economic and social significance.

With Buffet's contribution, Bill and Melinda foundation increases it's total endowment to some 60 billion dollars, nearly five times the size of the next largest U.S. charity, the Ford Foundation.

That total is greater than the 2004 gross domestic product (GDP) of all but 53 countries, according to the World Bank, or the total official development assistance (ODA) provided by the European Union and its member states to poor countries and multilateral agencies last year.

The foundation, which in 2005 disbursed almost 1.4 billion dollars from its 30 billion-dollar endowment, is expected to at least double its annual giving to some three billion dollars, which is twice the annual budget of the Geneva-based World Health Organisation (WHO) with which it has established close working relations in recent years.