Private nonprofit foundations & Public Health: Potential conflicts of interest in corporate links

Written by Colby Vorland

Corporate involvement in public health is a sensitive topic, but one I am largely against.  It is pretty clear that corporations usually get the benefit of bettering their brand image (which is often largely unhealthy processed products) at a low cost of sponsorship of health campaigns.  See plenty of great/unfortunate examples on blogs such as Food Politics, Weighty Matters, and Appetite For Profit, or my own criticisms of the ADA/Hershey partnership as a specific case.  Such relationships, as well as how government aid alters our attentions on health matters have been also discussed in length in the literature (see this table for examples).
But what about the private nonprofit organizations pouring money into public health promotion? How much do personnel in these foundations that often overlap with public corporations influence public health decisions, and might these relationships sometimes prevent objective divisions of funding?
This is difficult to answer and less studied, but a new paper in PLoS Medicine by David Stuckler, Sanjay Basu, and Martin McKee* titled “Global Health Philanthropy and Institutional Relationships: How Should Conflits of Interest Be Addressed?” has examined some of these relationships and highlighted some worrisome connections between food (and pharmaceutical) corporations and the major nonprofit foundations from information gathered from the public domain. They suggest such potential conflicts of interest be scrutinized similar to direct corporate involvements in public health, even though their missions are stated to be philanthropic instead of profit oriented.

Follow the Money

Of 100,000+ private nonprofit foundations in the US, controlling about $569 billion in assets, the authors analyzed the money trail of the top 5 “wealthiest US private grant-making foundations contributing to global health funding”: the Bill & Melinda Gates Foundation (which they note has more money than the entire World Health Organization budget), the Ford Foundation, the J Paul Getty Trust, the W K Kellogg Foundation, and the Robert Wood Johnson Foundation. Their summary table can be found below (click for original):

As a definition for a potential conflict of interest, they use the World Health Organization’s (emphasis mine):

A conflict of interest can occur when a Partner’s ability to exercise judgment in one role is impaired by his or her obligations in another role or by the existence of competing interests. Such situations create a risk of atendency towards bias in favor of one interest over another or that the individual would not fulfill his or her duties impartially and in the best interest of the RBM Partnership. A conflict of interest may exist even if no unethical or improper act results from it. It can create an appearance of impropriety that can undermine confidence in the individual, his/her constituency or organization. Both actual and perceived conflicts of interest can undermine the reputation and work of the Partnership. [23]

They answer these following questions in some detail for these foundations (mainly the Gates’), which I summarize and heavily quote from below:

In the sociology and political science literature, aid organizations have typically been studied by examining at least three sets of observable questions about powerand financial relationships, with the intent of ‘‘following the money’’ [33–39]: (i) Where does money come from and with what conditions?; (ii) Who decides? Who sits on the board of directors, and what are their histories, relationships, and interests?; and (iii) Who benefits from these decisions? Where are these funds distributed and which entities derive income from that expenditure?

(i) Where Does the Money Come From?

For The Bill & Melinda Gates Foundation, the majority is from Bill Gates’ personal fortune and stock in Berkshire Hathaway.  Almost half is invested in corporate stock, which includes many food companies, and half of this is in Berkshire Hathaway, which is even more heavily invested in food companies.  See the distribution table below (click for original):

Warren Buffett has committed his Berkshire Hathaway shares to be gradually transferred to the Gates Foundation, thus it:

will soon be the largest stakeholder of Coca-Cola and Kraft in the world.

Among the 4 other foundations listed above have their money in similar companies:

The invested companies included, to name a few, Coca-Cola, Kellogg (a leading producer of snacks and breakfast foods andthe main investment of Kellogg Foundation), PepsiCo, Pfizer, GlaxoSmithKline, McDonald’s, Nestle (a company with 6,000 brands mainly in food and beverage including coffee, water, chocolate, confectionery, ice cream, ‘‘health-care nutrition’’, and frozen foods, among others); NovoNordisk, YumBrands (the world’s largest restaurant company, operating Pizza Hut, KFC [Kentucky Fried Chicken], and Taco Bell, among others), Johnson & Johnson (main investment of Robert Wood Johnson Foundation), and Sanofi-Aventis, in addition to several mining, petrochemical, and alcohol companies.

The Ford Foundation, W K Kellogg, and Rockefeller foundations all directly or indirectly invest in tobacco corporations as well.  The Gates Foundation used to, but Bill and Melinda:

“… have defined areas in which the endowment will not invest, such as companies whose profit model is centrally tied to corporate activity that they find egregious. This is why the endowment does not invest in tobacco stocks.’’

However the authors note that:

The Foundation had invested in Philip Morris bonds prior to a New York Times report on the matter in the year 2000 [28].

If media attention is what forces a change, we can only hope this paper will be widely reported on and they will reconsider their investments in food companies that make ultra-processed products as well.  After all, the food industry increasingly parallels the tobacco industry.

(ii) Who Decides

As funding decisions in these foundations are private, we can only look at member relationships with corporations.  They authors note that the Gates Foundation’s policy for conflicts of interest for employees (emphasis mine):

states that an employee has a potential conflict of interest when “He or she or any member of his or her family may receive a financial or other significant benefit as a result of the individual’s position at the foundation; The individual has the opportunity to influence the foundation’s granting, business, administrative, or other material decisions in a manner that leads to personal gain or advantage; or The individual has an existing or potential financial or other significant interest which impairs or might appear to impair the individual’s independence in the discharge of their responsibilities to the foundation.’’

In light of the bolded sentence, it is especially disturbing that they do not appear to adhere to their own policies for board members, as:

Several of the Foundation’s members of the management committee, leadership teams, affiliates, and major funders are currently or were previously members ofthe boards or executive branches of several major food and pharmaceutical companies (see the commercial network of the Bill & Melinda Gates Foundation in the interactive map tool at http://mapper.nndb.com/start/?map=12051; see also Figure S1 for more details), including Coca-Cola, Merck, Novartis, General Mills, Kraft, and Unilever (one of the largest global consumer goods companies owning product brands in food, beverage, and personal and home care), among others [59–62].

They dug deeper into the histories of some of these members:

The Foundation is described as ‘‘led by CEO Jeff Raikes and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.’’ Warren Buffett, the second-largest donor to the Foundation and a board member, was a member of the board of Coca-Cola from 1989–2006 (Figure S1; his son, Howard Buffett, is on the board of Coca-Cola Enterprises and ConAgra Foods [one of North America’s largest packaged food companies], which is invested in modern seed technology, as are other members of the board of Berkshire Hathaway). Warren Buffett is the chairman and CEO of Berkshire Hathaway (and Bill Gates is a director on its board). Jeff Raikes, who replaced Patty Stonesifer in May 2008 (currently a senior advisor to the trustees), retired as the president of Microsoft business division to join the Foundation. Both Raikes and William Gates Sr. are on the board of Costco Wholesale Corporation (a membership warehouse club, selling bulk-packaged products at very high volume and low prices—the third largest retailer in the US).

These relationships get so convoluted when you look at the big, tangled web that results. And the authors used an interactive mapping tool called NNDB Mapper to do just this. Here is a static screenshot of their results. If you click on the image, you can zoom into the map, and each of the links can be expanded to represent in total thousands of people:

(iii) Who Benefits? Where Does the Money Go?

The bulk of the Bill & Melinda Gates Foundation’s financial transfers in global health have been to programs developing medical technologies [24]: more than 97% of its financial disbursements are directed to infectious diseases, and less than 3% to chronic noncommunicable diseases [16].

Only 3% go to diseases in which ultra-processed foods are associated with, yet these diseases are a bigger problem now than infectious diseases in low- and middle-income countries.

Several grants are linked to companies that are represented on the Foundation’s board among its investments. The Foundation has established partnerships with the Coca-Cola Company, which, in the words of the Foundation, are intended to‘‘create new market opportunities for local farmers whose fruit will be used for Coca Cola’s locally-produced and sold fruit juices’’ [63]. The program is a four-year, $11.5 million partnership for ‘‘mango and passion fruit farmers to participate in Coca-Cola’s supply chain for the first time,’’ with a $7.5 million grant provided by the Bill & Melinda Gates Foundation to TechnoServe, $3 million provided by The Coca-Cola Company, and $1 million by bottling partner Coca-Cola Sabco. This could reflect the recent comments of Melinda Gates in a webcast, ‘‘What we can learn from Coke,’’ suggesting that government agencies and non governmental organizations (NGOs) could learn from the manufacturer to promote global health in low- and middle-income countries [64]. In addition, many of the Foundation’s pharmaceutical development grants may benefit leading pharmaceutical companies such as Merck and GlaxoSmithKline [24], for example via partnerships to test pneumonia and rotavirus vaccines (such as the ROTATEQ partnership and the Merck Vaccines network partnership with the Global Alliance for Vaccines and Immunizations network), experimental malaria vaccines (through Medicines for Malaria Venture, an NGO), cervical cancer vaccines (through PATH, anNGO, and Merck’s vaccine Gardasil), and HIV interventions (through the Africa Comprehensive HIV/AIDS partnership). Johnson & Johnson has entered a clinical partnership to develop new HIV-prevention technology, noting ‘‘the work between Johnson & Johnson and the Gates Foundation is a strong, strategic, comprehensive relationship’’ [65].

Investments in Coca-Cola, former/current board members with relationships to the foundation on Coca-Cola, and promoting developing nations to partner with Coca-Cola: clear conflicts of interest.  And that is just one of a likely great many examples.

What about Monsanto?

Monsanto is one of the companies the Gates Foundation invests in, but the authors specifically state in the discussion that they did not examine this closely closely. Luckily, Karl Haro von Mogel here at Biofortified wrote an excellent piece on the issue last year.  Be sure to read the discussion too- commenters even brought up the Foundation’s investments in food companies back then.

Conclusions

The authors are clear in the limitations of an analysis such as this; they can map the web of connections but cannot prove that they influence decision making.
They leave us with some strong statements and suggestions:

A private foundation clearly has the legal right to spend money however it wishes within the limits of the law; yet, in an environment where private foundations influence the future direction of, for example, what programs will be introduced into a foreign community, in a manner that does not necessarily involve directorship or voting from the community members themselves, it is reasonable to subject the decision-making processes of these entities to public debate, especially if these funds were to have otherwise been collected for public redistribution through federal taxation.

Possibilities to resolve some of these potentials for conflicts of interest put forth by the authors:

(1) Divestment.  Private foundations have been advised to not invest in companies that stand to profit from the tax-exempt foundation’s agenda or in those that produce products such as tobacco, salty foods, or sugary drinks that have well-established connections to global health epidemics [71]. Such investments may counter these foundations’ purposes of promoting global health. Similarly, foundations must be wary about investing in pharmaceutical and food and beverage companies that could gain market share and enhanced publicity, and could benefit as a result of the foundation’s grants. For example, the Bill & Melinda Gates Foundation held stock in Merck at a time when it developed partnerships with the African Comprehensive AIDS and Malaria Partnership and the Merck Company Foundation to test Merck products. As another instance, which may reflect aligning interests, the Robert Wood Johnson Foundation has played a leading role in promoting anti-tobacco products and maintains Smoking Cessation Leadership Centers and programs [72], although its endowment is mainly invested in Johnson & Johnson, a leading manufacturer of cessation products, and some board members have been represented on both the Foundation’s and the company’s boards [53].
(2) Transparency.  Given that there is a limited pool of specialist expertise that can be drawn upon, it is possible that situations may arise where some persons who sit on the boards of, or advise, philanthropic foundations, will also have links to corporations. It would be unreasonable to demand that foundations refuse to engage with those who have corporate links, so denying themselves the best advice in some fields. Many authors have stated that a solution to this issue is to adopt full disclosure, or transparency, and to ensure that all individuals on foundation boards recuse themselves from decisions related to their affiliate companies [16]. However, achieving transparency and appropriate recusals is not always easy. Indeed, while the information we collected to conduct this case study is all in the public domain (and thus transparent), it required considerable time and effort to assemble in a manner that can be publicly interpreted, thus limiting full transparency. Furthermore, there is an inevitable time lag between decisions being made and information onthe relationships among those making the decisions becoming available, which again limits transparency. Nevertheless this case study sets out the type of information that is required for observers to interpret global health financial flows and, we argue, offers a template for future disclosures to enhance transparency of not just individual employees but the full scope of potential conflicts of entire institutions.
(3) Aligning Aid with Community Needs.  It is important to align aid with community needs. However, despite numerous declarations to align aid with the preventable burden of disease, private foundations tend to operate in ‘‘silos,’’ focused on a core set of issues that their founder or governing director decides isimportant [73]. Extra-budgetary contributions, earmarked by donors, are a major factor in creating the observed imbalance between patterns of expenditure by global health institutions and the current burden of disease [17]. Major funders can have a significant impact on overall financial flows; International Monetary Fund (IMF) economists are advising that countries divert aid to reserves because of concerns about its unreliable and unpredictable nature, and the desire to privatize health care services rather than perpetuate state-run health care operations [74,75]. A recent study found that when countries are borrowing from the IMF more than 98% of aid is diverted to reserves or displacing government spending on health [75]. Working toward global health financing that aligns with the disease burden will remain elusive if foundations and financial institutions operate as distinct bodies while influencing communities that are receiving numerous disparate and poorly coordinated funds. Thus, foundation investment and program portfolios should incorporate representation from the intended recipients of its support.

In a perfect world, public health bodies and efforts would be free of all outside influences and be able to objectively evaluate public health needs and distribute funds accordingly.  But this is a pipe dream.  A rigorous analysis of more of these relationships that potentially alter our food/health environment so much is clearly needed, and the template used by these researchers is novel and important.

Reference

David Stuckler, Sanjay Basu, & Martin McKee (2011). Global Health Philanthropy and Institutional Relationships: How Should Conflicts of Interest Be Addressed? PLoS Medicine : 10.1371/journal.pmed.1001020
*Ironically Martin McKee has been on advisory boards for Merck & Co and Johnson & Johnson, received funding from the Rockefeller Foundation, and the school he resides at receives funding from the Gates Foundation.

Written by Guest Expert

Colby Vorland is a PhD student in nutritional science at Purdue University. He is studying the regulation of intestinal phosphorus absorption in health and chronic kidney disease. Colby has a background in dietetics and has previously worked in lipid metabolism in non-alcoholic fatty liver disease.