In my last post I wrote about the pattern at the Gates Foundation of abusing the idea of “research” and “evidence” to advance its education policy agenda. Gates has an organizational culture that permits intellectual corruption. There are good people at Gates doing good work, but there is something rotten about the organization that needs to be changed if they hope to succeed over the long run.

In addition to their abuse of research and evidence, the Gates Foundation suffers from a bloated staff and paralyzing bureaucracy. As their 990 tax filings show, their assets doubled over the last decade, but their staffing levels increased ten-fold — even more rapidly than the increase in assets as Buffett adds his money to Gates to create a philanthropic Leviathan. They have so many people that they needed to build the $500 million palace pictured above to hold all of them.

But with huge size, staffing, and wealth comes the huge danger of corruption. If an organization becomes bloated, inefficient and corrupt in the profit-seeking sector, the possibility of a hostile takeover can help check or eliminate abuses. But in the non-profit sector there are no corporate raiders. No outside shareholders can come in to take over the Gates Foundation, sell off its over-priced facilitates, cut staffing, reduce corruption and focus on the core mission.

Instead, non-profits need to check the danger of corruption that comes with wealth and power in the same way that governments do — by creating institutional constraints, dividing power, and pitting ambition against ambition. In short, non-profits need a Constitution.

Specifically, the Gates Foundation has just become too damn big for its own good. It’s so big and powerful that just about everyone in the education policy world gets money from them or hopes to. It’s so big that everyone within the organization is too eager to gain control over it, causing in-fighting and the need for rigid top-down controls. It’s so big that they can indulge foolish ideas and make irresponsible claims without fear of consequences.

One way Gates could check these problems is to divide its education unit into a Team A and Team B, each of which would operate independently with its own theory of action and reform agenda. The different Teams within Gates could then compete with each other to develop and pursue the best reform ideas. They could also help keep each other honest by having an interest to detect, reveal, and stop any intellectual dishonesty in the other.

Many people wrongly believe that organizations function best when they achieve greater scale and are streamlined, but this is incorrect in the peculiar world of government and non-profit organizations. As Patrick Wolf and James Q. Wilson’s work on bureaucracy shows, redundancy within government can be a desirable arrangement. Having the FBI, DEA, and ATF all chasing drug dealers is beneficial because they compete with each to do the best job and win a larger share of congressional appropriations. Redundancy can simulate the choice and competition of the private market.

Similarly the division of power and responsibility between local, state, and federal governments as well as between the different branches of each government helps check abuse and corruption while providing some of the positive effects of choice and competition. Smart non-profits should likewise develop a policy to split themselves into smaller competing units once they reach a certain size.

Another institutional arrangement that might help right the ship at Gates is to develop an independent internal research department that reports directly to the board and not to the heads of any of its programmatic units. A research department that does not report to the programmatic unit heads is less likely to feel compelled to verify the wisdom of the paths chosen by the programmatic units.

In addition, non-profits like Gates should develop a policy that prevents them from ever conducting public evaluations of their own projects internally. The research unit’s responsibilities should be limited to contracting out research to independent third parties and then reporting the results to the board. One of the real problems with the MET project at Gates is that is was funded and conducted internally by Gates. That made it very hard for them to report that the project had failed to find what they had hoped. You shouldn’t be the judge and jury in your own case.

Lastly, changing the organizational culture to one that gives primacy to intellectual integrity requires cleaning house at the leadership level. Vicki Phillips, the head of the education unit, has to go. She has repeatedly mis-described the findings of their own research. I’m not sure whether it is because she does not understand the research or because she doesn’t care about being accurate (and I’m not sure which would be worse), but you can’t effectively lead an organization if you can’t honestly describe your own research. It might be good for Gates to consider appointing a well-respected scholar to head its education units, just as the Carnegie Foundation did when it selected University of Chicago researcher, Anthony Bryk, as its president.

Tom Kane, who until recently served under Vicki Phillips, brought impressive research credentials to the table but unfortunately has chosen to compromise those credentials. Kane is an incredibly capable and accomplished researcher, but even the best can be tarnished. Gates needs to cut all remaining ties with Kane to set the example that accurate and honest reporting of research is of primary value.

Of course, none of this can or will happen unless Bill Gates wants it to. Perhaps Gates himself is the source of the problem. If that’s true, then no organizational or staffing change will improve the situation. But I suspect that Gates does not want to see his wealth squandered. He doesn’t want to be the next Walter Annenberg, whose $500 million “Challenge” ultimately “had little impact on school improvement and student outcomes…”

The MET project is already almost $400 million that Gates has spent with little to show for it. I don’t think Gates wants to keep doing that. And even if his internal research declares success and others are too timid to publicly question that claim, over the long run (especially when the money stops flowing in this direction) people will think of Gates as they think of Annenberg — as someone who failed to use his enormous wealth for positive effect in education.

In the end, this is all up to Bill Gates. He can choose to make a giant bonfire of his fortune by squandering it on palatial buildings, excessive staffing, and foolish enterprises whose failure is only temporarily disguised by dishonesty. Or he can choose to make the organizational and staffing changes necessary to get the Gates Foundation back on track.

(edited for some typos)

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