The World's Greatest Philanthropists

"We Are Willing To Take Risks That Governments Typically Don't"

Bill Gates is among the handful of colossi who want to leave behind a much better planet than they found it

Published 10 years ago on Jul 19, 2014 16 minutes Read

There are billionaires and then there is William Henry “Bill” Gates III. Come to think of it, how many billionaires have “Bill” as their nickname? His parents sure knew what they were up to when they named him William. There is a good reason that Bill Gates is the richest man on earth today. The Creator figured there would have been no better heart or a more resolute mind to entrust such riches with. Gates brings the same steely aggression to philanthropy that helped him build Microsoft into an operating system powerhouse. Albert Einstein might have had Bill in mind when he said, “Intellectuals solve problems, geniuses prevent them.” Improving people’s health and giving them the chance to lift themselves out of extreme poverty and ensuring that all people have access to opportunities they need to succeed in school and life are the key goals of the Bill & Melinda Gates Foundation. He is among the handful of colossi who want to leave behind a much better planet than they found it. In this exclusive interaction with N Mahalakshmi and Rajesh Padmashali, he shares his thoughts on why he is doing what he is.

Why did you decide a personal involvement in the foundation was necessary? You could have continued to write cheques but you decided to plunge in full-time.

Yes. My full-time work now is here at the foundation. It is very exciting work and I enjoy it. I felt that my work at Microsoft prepared me in terms of being willing to learn science in a deep way, work and bet on the best scientific teams, figure out what we would do to actually get the products to be used out in the field. So we built an institution, hired really good people, figured out how to do partnerships, how to work with governments, how to get things down. We do a lot of work in India and in Africa. For this phase of my life, it is the perfect thing. It has allowed our resources to have far more impact than if we had just done it passively. Some philanthropists are still tied up doing their business work, like Warren [Buffett] is at Berkshire. That is a perfectly valid model. For me, I felt I wanted to switch over and make this my primary work.

You have said what you did at Microsoft during the first 20 years helped in preparing for this. What transferable skills have come here? 

Well, Microsoft was about technology and believing that innovation could change things very dramatically for literally hundreds of millions of people. In fact, the science of biology is advancing — maybe not as fast as quickly as chips and optic fibre and software, but almost. Particularly, if we focus on why do children die, clearly, malaria, pneumonia, diarrhea, helping kids survive the first 30 days [are issues that] simply haven’t got the focus they deserve. So I came over here with resources and the ability to fund very ambitious projects to change those things.

A lot of the science is different. We use some digital technology. But you have to understand vaccines and everything about getting them approved, making them cheap and getting them delivered. So I have had a chance to learn more. But it is not all that different from running Microsoft.

What are the unique strengths that you and Melinda bring every day to the table at the foundation? Why did you choose this catalytic philanthropy approach?

We are now about 15 years into it. My full-time work started in 2008, so it’s been about six years now. During that time, you get to know malaria, the malaria community, malaria modelling, malaria science. I was in Cambodia just last Saturday with Melinda, looking at some malaria projects. Before that, I was in Indonesia looking at some dengue projects. So if you pick something and focus all of your energy and attention on it, build it both through partnerships and within the foundation and the best people commit their lives to it, it is a lot like doing magic software. You make mistakes that you learn from, you see some things that go well that you learn from and so, we are better now. We have incredibly ambitious goals on how we can reduce childhood death.

Your foundation’s blog is called  ‘Impatient Optimists’. Could you define an impatient optimist? What is expected of him or her?

Well, the optimism is that you have seen that the world has improved, whether it is literacy, women’s rights or fewer children dying every year. The world is on the right track [with] innovation and increased wealth. Not in a very straight line, not in an optimal way, but they are improving these things and we should want to speed that up, particularly for those most in need. Some of the complacency, the lack of funding, the regulatory barriers, the lack of educating people about these things — whether contraception or vaccines — means that we are not doing as well as we should. We should move faster so that the chance of any child dying before the age of five is less than 1%. That is what we have in the rich countries whereas in India, it is about 5%. In Nigeria, it is about 15%. Why should it be different? It is actually not that expensive to push for both the science and the delivery to create equity.

When you moved full-time into the foundation, did it require any kind of mindset change? You are a very driven person and we have seen the results at Microsoft. But catalytic philanthropy requires time.

Well, big software projects require a lot of time. Microsoft started work on the graphics interface in the early 1980s, we worked on the first version in 1982 but it didn’t become mainstream for over a decade. The really big projects and things do require some patience. Breakthrough science is not an overnight thing. 

The feedback systems were more efficient in the case of software in terms of what people liked and what did they not like. Here, we actually had to build measurement systems to understand why are people still dying of AIDS; what is it about the delivery system that is not getting those deaths down to zero; why is it that women who want contraception do not have it; what is the design or the delivery or the education that would help solve that problem? So, it is a little slower moving, a bit more regulated than other areas. The delivery problems, particularly in Africa are tougher; the need to work with governments on their primary healthcare excellence is very strong. I didn’t have to know quite as much about Indian politics when I was just doing software. I spend more time with Indian chief ministers now than I did then.

What is the most moving or the most heartening experience that you have had during your field visits?

Well, you can go to malaria wards in Africa now and see far less children. Then, you can meet kids who are still affected. I was in New Delhi and met this child, who was one of the last in India to get polio. She was too young, so she didn’t understand how that would make her life very difficult. But it was tragic to see. Fortunately, since January 14, 2011, we haven’t had any cases in India and if we can have a little bit of success up in Pakistan and Afghanistan then we will get it out of Asia. We need a little bit of luck in Nigeria to get it done there. So we are close on that and it is heartening that I haven’t had to meet with any other kids in India who have got polio. 

We are down to pretty small numbers, it is pretty amazing. India should be very proud of its role in this. In India, [given] the number of kids who are born, the amount the people move around the country, by many measures it was going to be the most difficult. We never had a tax on vaccinators, which we have up in Pakistan. 

You have to see this stuff by seeing the individual kids and then go back and look at the statistics and realise that by getting vaccines out or by getting bed nets out, there are millions of mothers who have kids who survived who wouldn’t have before. 

Actually per life that is saved, it is pretty low-cost stuff. It costs less than a few thousand dollars per life that is saved.

Is this the most gratifying part of this whole endeavour?

It is gratifying to see a scientist succeed. At the end of the day it is about kids growing up healthily and for every kid who dies there are at least four kids who survive. But their brain isn’t fully developed. So the levels of stunting in India are pretty unbelievable and those are kids who can’t contribute. No matter how much you invest in their education, they are going to fall far short of what their true potential is. That is tragic because they are not getting the right vaccines, the right nutrition. Their life just isn’t the same. 

It is exciting to change that. A lot of countries like Mexico, Brazil and China that had these problems 20 years ago, had them very severely and now they would be way less than before. There would be about three kids out of a hundred that die before the age of five. It is definitely achievable and we want to see every country get even below that level.

At this year’s TED conference, you showed a graph that showed that infant mortality had fallen in the last five decades, from 22 million to about 6 million now. Have you charted how much hope has risen as a result of your efforts or how much cynicism has fallen?

I think that the good news about the progress being made is not that well understood. There is a part of [the cynicism] that is fine, which is that people should never be satisfied as long as any children under the age of five are dying. But we should be smart enough to be optimistic by knowing the trends and we should study the trends of countries that did particularly well. What did they do right? There are countries like Vietnam or Rwanda that run fantastic primary health care facilities — 99% of the kids get their vaccines and there are places like the north of India that are wealthier than either of those countries where kids don’t get their vaccines, maybe at a 70% coverage rate or even less than that. 

Things have improved a bit recently [but] there are always things for people to worry about. If you ask people in India or China are things getting better, you do get a very strong response. There are countries where they miss that quite a bit — in the US, people’s sense that things will be way better in 20 or 30 years isn’t the strongest it should be.

The preferred mode of the foundation was to work with local partners and NGOs. Then you also decided to invest directly in companies. Was that driven by some insight or some finding?

We don’t do much. We do this so-called programme-related investment and we have done hundreds of millions. But that as a percentage of money we put out is pretty small. It is mostly start-ups that are working on a health technology that would be really important for us, for the poor people, if it works out -— [we are] making sure they get enough funding to get full speed. Because we understand science, we are willing to take the risk and do those things. But it is not a huge part of our funding. But it is nice to have that tool available at hand.

Given your experience working full-time with the foundation, what do you thinks works in philanthropy and what doesn’t?

We don’t do lots of types of philanthropy. We don’t do cultural philanthropy, we don’t do religious philanthropy, we don’t do direct charity. We do a lot in education but that is mostly focused on the US — scholarships, technology, helping teachers improve. The slice we do is mostly health and agriculture. There are few other things like sanitation and financial services that we think can also be  pretty catalytic. It is like a company in a particular industry. Does it have much advice for a company in another industry? Maybe about recruiting or morale or simplified processes. But everybody has to look and say that maybe there is enough difference that you do things in a different way. 

Also, we are operating on a philanthropic scale that is pretty large. We have got over a 1,000 people here who are experts — we have a malaria team, a TB team. There are philanthropists who can do a great job and choose not to hire staff at all. They just have to pick really good grantees and expect the expertise to be inside those grantees and that is a perfectly valid way of doing things. It would be great if they would, but I don’t think many philanthropists would want to turn it into as much a job as we have. But some do.

Why is that? Is that because it requires a change in temperament or a different mindset or is it just the association with the cause?

Well, you are going to have to start over and you are going to have to learn new things and you are going to be uncomfortable because the domain you are in, you got very good at over a period of decades. Now, you are in a domain where the need to work with government is very high. You are picking it because it hasn’t been solved as yet. It doesn’t work the same way as the private sector where your product or service sells or doesn’t and your relative strength can be determined by your profitability. 

Azim Premji is someone I admire a lot. He has picked education as his primary calling and he puts most of his time into working on that. It is a very analogous case even though the topic isn’t the same one. It would be interesting to ask him whether he gets frustrated by the government or does he just see the progress and is thrilled in doing it. He seems very engaged. It is very similar to the situation we are in.

The foundation has an end-date. After the founders are gone, spending that quantum is a huge challenge. With your scale, it is an even bigger challenge. Have you thought through that?

Our money will all be spent within 20 years of whenever neither Melinda nor I are here to guide things. It will all be spent on the causes that we believe in, of which health equity is the primary thing. We think there is plenty of need in the health area. Remember, even though our resources are large by philanthropic standards, by the standards of what these health needs are, even compared to other development aid budgets or the domestic Indian government health budget, our money is tiny. 

It can fund a lot of upstream research because we are willing to take risks there that governments typically don’t, like the creation of a whole new vaccine. We are working on a malaria vaccine. Other than the US government, there are very few additional funders. Over 90% of the money is either the US government or us. It is great that not too long after my life is done, this disease will get a lot of resources. And I believe in that time frame we can get health equity and for whatever problems the world has, there will be more rich people who are alive and can pick those things as opposed to some with an out-of-date chain of management that I would create.

In business we often find that beyond a certain point, diseconomies of scale begin to operate. In philanthropy, when do diseconomies start setting in? In spending the wealth of the foundation, at what stage do you think it might require a different approach? Where will diseconomies start eating into the impact that you will have? 

We don’t have enough money for these health issues. We are saving lives for $2,000 per life. If we had more money, then we would be saving lives for $3,000 or $4,000 per life. In rich countries, lives are valued at least $3-4 million. That is, they are willing to do things that cost $3-4 million per life saved.

Right now, the world is acting like these lives are worth less than $1,000. If that number was going up and we weren’t finding low hanging fruit then we could say “Maybe we should spend this money on dog food, or maybe more Coca-Cola, something else. What are you doing buying all these vaccines? You really should go to more soccer games or get a new car.” I agree. I don’t think all of society’s resources should go to health. But as long as you have this almost tragic under-funding, we don’t have a malaria or an HIV vaccine… Go spend a day talking to HIV and TB patients. Come out and say whether we should we take money away from health and put it into some other category. We are hardly at that point right now.

Fortunately, there is a market-driven incentive for diseases like cancer and diabetes. That is why we can stay away from those. Eventually, if there is a solution that is only working in the rich countries then there might be a role for us. But the very market-driven huge resources are being allocated in a normal capitalistic way. Farmer research budgets are about $70 billion a year. The US government’s medical research budget is about $30 billion a year. We are just a bit over $4 billion a year now. Yet we are spread across and are spending only $3 billion a year on working with developing countries. 

I don’t think we are anywhere near the point of diminishing returns. We literally have to sit and talk about how much we budget for pneumonia, childbirth or reproductive health. We have a pretty high threshold because each of the programmes is getting a lot of impact per dollar.

After last year’s Berkshire meeting, you listed on your blog the three things you have learnt from Warren Buffett. What are the three most important things you have learnt from your parents?

My parents were engaged in philanthropy as much of their time as in anything. They were mostly domestic things — Planned Parenthood, United Way, some education things, working with the local university. That set a very good model for me. My parents had a lot of curiosity. They encouraged my reading. They made sure I got a good education. My dad still comes into the foundation every day. He is an incredible role model, a man of great integrity and principles. He actually was working at the foundation full-time along with an executive from Microsoft whom Melinda and I knew and trusted. The first decade of the foundation was really shaped by my dad and Patty Stonesifer. When I came in full time, it was to something that had already learnt a lot. That was nice because I am used to a lot of activity and it would have taken time to build it up to that level. My dad did an amazing job building the foundation and getting it off to a good start. My mom didn’t get to see that. But she had sown the seeds of the values that led to the whole thing. 

Are there any insightful questions that you wish the press asked? Something that has either not been asked before or something that needs to be highlighted.

Somebody could ask why do children in India not have pneumococcal vaccine. Why should Bangladesh have the vaccine and children in India not have it? India in terms of health is absolutely a glass half full. There has been all this progress. In work we are doing in places like Bihar, we are seeing all this great progress. But relative to its success, vaccination coverage, stunting, is nowhere near the level of visibility it should be. And yet, if there is any question about something then there will be these public lawsuits — “Oh maybe, was there 1% that there was a problem on” — and that will delay things. Everything should be questioned, that’s fine. But it needs to be questioned in terms of the benefits as well. Why aren’t the benefits there? 

Over time, I do think, there will be strong local voices. Public Health Foundation of India is starting to fill this vacuum of speaking out on behalf of these sick children. The elections are more about competence of delivering health services, less about help my group versus some other groups in a zero-sum type way. I am hoping that health in general and specific health deficits and who is going to do the best job fixing those things are more of a publicly-visible thing. Because if you say, “Why isn’t education working,” well, there are things that are very much in the education system in terms of teachers being there and quality and things like that. But there is also the health status of the children, which is also a limiting factor there. I would love the general dialogue to be more animated about how far behind Bangladesh is India. And why should that be, anyway?