Charity or Financial Powerhouse?

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It seems that when Warren Buffett pledged a large part of his fortune to the Bill & Melinda Gates Foundation, he was giving his money away to something more than a charity. Recent reports have revealed that the Gates Foundation is starting to use its money not just to “end poverty” or fight disease in the third world, but to finance media acquisitions by participating in a credit facility.
Now charities and non-profits have long felt the need to invest their money while looking for new ways to employ it toward their charitable goals. But direct investment in an M&A credit facility is unusual. What's more, it shows why the completely uncritical attention paid to Buffett's donation was particularly silly. As billions are piled upon billions into centralized charities it is worth noting that what is created is not just a huge fund for doing good in the world but a gigantic financial institution that will influence the financial markets.

The Bill and Melinda Gates Foundation extended its charity work, in a sense, to the MediaNews Group in helping finance its recent purchase of several California newspapers.
MediaNews obtained a financing package from a group of lenders that enabled the newspaper company to borrow up to $597 million to help finance its acquisitions of the San Jose Mercury News and others papers, according to a MediaNews filing with the Securities and Exchange Commission.
The syndicate of lenders included the Gates Foundation, General Electric Capital Corp. and several financial and other organizations.
The filing also disclosed that Hearst Corp., owner of the San Francisco Chronicle, made a $299 million equity investment in MediaNews in the complicated deal.


MediaNews Buying in California Boosted by Bill and Melinda Gates Foundation
[Editor & Publisher]

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