LET'S GIVE TWO CHEERS for Bill Gates and Warren Buffett. They have given new meaning to the word philanthropy, and not only by virtue of the magnitude of the funds they are jointly deploying. Not that somewhere between $60 billion and $70 billion is chicken feed. The lifetime donations of philanthropist Andrew Carnegie, who famously said, "The man who dies rich, dies disgraced," came to a comparatively meager $7 billion in today's money. The Gates Foundation--thanks to the infusion of $31 billion or so from Buffett--will give that much away every two years. It is now more than five times the size of the $11 billion Ford Foundation. And the $1.36 billion spent by the Gates Foundation last year--due to double next year--came pretty close to the entire $1.66 billion budgeted by the World Health Organization for this year.

Indeed, if this were an industrial merger of the first and second largest companies, as it is of the first and second largest philanthropies, the antitrust authorities would already be putting together teams of economists and lawyers to investigate the effect of the deal on competition.

Fortunately, the enhanced Bill and Melinda Gates Foundation does have substantial competitors. The approximately $3 billion per year that the foundation will henceforth spend is only one percent of the $260 billion of annual charitable giving in the United States, according to Richard Jolly, chairman of Giving USA.

Then there are the world's governments, which are in the same business as the Gates Foundation. But those agencies give away other people's money and therefore don't effectively scrutinize the use to which those contributions and grants are put, a situation the World Bank's Paul Wolfowitz is now trying to correct. A bit of competition from a private philanthropist who knows how to get value for money might just provide a yardstick of efficiency that will embarrass even the bureaucrats who specialize in no-questions-asked handouts. It would be wonderful if the Gates-Buffett merger triggered a Schumpeterian gale of creative destruction in the global giving business.

Another advantage of the Gates-Buffett arrangement is that it sends a signal to other potential donors that it is no shame to admit that knowing how to make money involves a different skill set, to use management-consultant jargon, from knowing how to give it away. In choosing the Gateses to manage his giving, the self-effacing Buffett deployed the vaunted skill at due diligence that made him such a sought-after adviser and enabled the "Sage of Omaha" to invest so successfully over the years in Coca-Cola, Anheuser-Busch, Wells Fargo, and furniture, carpet, candy, jewelry, restaurant, and natural gas companies. "You need to seek out people with a talent to distribute money in the same way as you do for those to accumulate it," Buffett told an admiring press corps. Giving away money is "a much tougher problem than amassing money," he added, to the surprise of all those Buffett wannabes in the hedge fund business for whom amassing is a top priority. Buffett has given huge impetus to what is being called "venture philanthropy" or "philanthrocapitalism."