Gates Foundation Axes Grants to Arabella Advisors, Seeks 'Early Exit' From $450M Deals With Woke Nonprofit Giant

In a surprising move, the Gates Foundation is severing ties with Arabella Advisors, a powerful US-based consultancy. After years of a lucrative partnership, the foundation is now looking for a swift departure from its substantial grants to the nonprofit giant.

Bill Gates has discreetly ceased financial support from his $77 billion (£57.27 billion) foundation to a group that backs socially progressive initiatives and Democratic candidates.

A Sudden Shift in Strategy

The Gates Foundation opted to discontinue its grants to nonprofit groups overseen by Washington-based Arabella Advisors at the end of June, according to an internal announcement from the foundation that was obtained by The New York Times.

The foundation's leaders, whose primary work is backing global health projects, confirmed it would not be entering into any further investments with 'Arabella-related entities', would not be renewing any current grants to the for-profit advisory firm, and would even attempt to 'pursue early exits' from some long-term investments.

The Gates Foundation's Stated Reason

The reason given for the change was a wish to work more directly with those who receive grants and to limit the use of intermediaries. 'Teams are increasingly working directly with programmatic partners — organisations that are deeply embedded in the communities we serve and [are] closely aligned with our mission', the June 24 announcement said.

'As we look ahead, this is a chance to build deeper, more durable relationships with those partners — and to reinforce the kind of legacy we want to leave behind'. A spokesperson for the Gates Foundation also maintained in a statement to the Times that its decision to end its link with Arabella was 'a business decision that reflects our regular strategic assessments and partnerships'.

A Retreat Under Pressure

However, this shift occurs amidst intensified scrutiny of Arabella for its 'dark money' funds, which back Democrats and progressive initiatives, and Gates's desire to safeguard the foundation he established and guided for almost three decades.

The Times reports that the billionaire's focus has increasingly shifted to safeguarding the Gates Foundation, as President Donald Trump threatens philanthropists with links to Democratic policies and the tax-exempt status of particular nonprofit organisations.

Having already scaled back his focus on diversity, equity and inclusion initiatives to safeguard his charitable organisation, he now appears to be attempting to pull back from Arabella Advisors as a means of further shielding the foundation.

The Arabella Network

As one of Arabella's first and largest financial backers, it has provided or pledged approximately $450 million (£334.79 million) to the firm's nonprofit funds over the past 16 years. These resources then provide funding for nonprofit organisations that are active in fields such as gender equality and education, assisting with their administrative duties, like payroll.

The funds that Arabella oversees perform a comparable function for nonprofit organisations that, in effect, pursue a political goal through their civic engagement work, as the company also manages overtly political funds, including those that donate to Democratic super PACs.

One of the firm's most significant funds, the New Venture Fund, has even contributed money to the Sixteen Thirty Fund, another group overseen by Arabella, which has given $97 million (£72.17 million) to super PACs aiming to elect Democrats and defeat Republicans since 2016.

Arabella Advisors was also recently found to be managing several funds, including the Sixteen Thirty Fund, Windward Fund and New Venture Fund, which have all contributed to Community Change and Community Change Action since 2020, according to The New York Post.

In turn, Community Change and Community Change Action are providing financial support for Free DC's activist campaign, which protests the deployment of the National Guard by Trump in the nation's capital.

Drawing the Wrath of Conservatives

Arabella's political activities have now incurred the wrath of several conservatives, with Elon Musk demanding an investigation into Arabella's organisations and White House officials having received a briefing on its actions.

However, the executives at Arabella contend that its critics significantly exaggerate its political influence, and Megan Cartier, the Chief Marketing and Communications Officer, says the firm 'provides operational support to hundreds of philanthropic clients pursuing social change'. She explained, 'We do not have donors, make grants or engage in political activity'.

Lee Bodner, President of the New Venture Fund, also stated that the group's 'grants are restricted for only nonpartisan purposes'. He also revealed to The Times that funding from the Gates Foundation accounted for only two per cent of the fund's total funding in the previous year.

The Gates Foundation's most recent grant to the New Venture Fund was announced last November, amounting to $41 million (£30.50 million) to be distributed over approximately five years, supporting women's health globally.

With the foundation now trying to recover its funds, some nonprofit organisations that partner with Arabella are attempting to create distance from the firm to preserve their relationship with the Gates Foundation.

The Domino Effect on Nonprofits

Other groups had already been considering methods to reduce their reliance on Arabella's services before the Gates Foundation's announcement, due to concerns that President Trump might freeze their assets or order investigations into their operations.

Reportedly, those conversations hastened Gates' choice to sever his connection with the consultancy. Additionally, several other groups have also taken action this summer to exit the New Venture Funds and seek a new financial backer.