Dear Bill:

I hope you are doing well. It is with dismay that I recently read in a Los Angeles Times story about how the investments of the Bill and Melinda Gates Foundation might be working against the good works that is the foundation's mission. The story chronicles one 14-month old infant, Justice Eta from Ebocha, Nigeria, who has been fortunate to have received immunizations against polio and measles thanks to the Gates Foundation. Unfortunately for little Eta, he has been suffering (and will likely continue to suffer) from respiratory illness brought on by the refining activities of several oil companies. These companies count the Gates Foundation as one of their largest investors. The problem effects large swaths of the Nigerian population. I will not re-cap the whole story, but it is worthwhile reading.

I am pretty certain you are aware that, at $35 billion, the Gates Foundation dwarfs the next largest charitable foundations by a factor of six. Moreover, pledges from your own personal fortune plus the historic bequest last year from your pal, Warren Buffet, mean that this foundation could soon be worth $100 billion. There has not been a force for good on this scale since … well … ever! It is entirely possible that your legacy from this foundation will eclipse the gargantuan business legacy of the Gates' and Buffets.

Bill, I would never bash any individual or any organization that does this much for humanity. I sincerely applaud you, Melinda, and Warren for your epic generosity, well thought out goals, and your commitment to determining where your charitable dollars will generate the most bang for the buck. But…

What I find particularly amusing is a quote from one of your policy wonks pointing out a Chinese Wall between the investment and giving wings of the foundation. One side does not concern itself with the other. One side's mandate is to seek out the "highest returns" while the other focuses on who, when, and how much to give away. Since you spent much of the 1990's asserting that a Chinese Wall existed between OS and Applications at Microsoft (much to the disbelief of others), isn't it ironic that your foundation now claims that another Chinese Wall cancels out some of the foundation's good works?

Bill, please take this advice:

1) Investing responsibly does not mean sacrificing returns. The best academic studies have shown this over and over again.

2) If you must hold those companies, use your size and breadth to get active at shareholder meetings and stop the most repugnant practices. This would help the Foundations goals and help the investment returns.

3) You can still profit from rising oil prices while not engaging in extractive, highly polluting industries. You should already know this from your personal stake in Pacific Ethanol (NASDAQ: PEIX).

4) If you take the lead in making corporations more responsible, other charitable foundations and public investment institutions will follow. You can magnify your good works many times. Moreover, if you can show the mostly spineless mutual fund complexes that social activism can be profitable, they will follow, too.

5) Despite many opinions to the contrary, most of which are expressed by the sour-grapes McNealys, Ellisons, and Andreesens of the world, I sincerely believe that Microsoft is a beacon of social responsibility (yes, seriously). I firmly believe that these activities have been taking place without your knowledge (unlike — ahem — those other allegations from the anti-trust trial… wink, wink). Your "returns at any cost" managers have just been shortsighted. However, since you know now, the status quo just will not do.

Oh, and if your investment managers need some help determining which companies have lousy social performance, have them give me a call.

Give my best to Melinda. Do well by doing good.

Mark

Mark Brandon is the managing partner of First Sustainable, a socially responsible investment advisory, and the author of the Sustainable Log blog and newsletter.