Gates Foundation going strong 10 years after $16 billion donation
The Washington Post
It has been 10 years since Bill and Melinda Gates gave $16 billion to their foundation, putting it in the top tier of charitable organizations. Gates isn’t the first captain of industry to give a large chunk of his personal fortune to charity, but even by the standards of Carnegie, Rockefeller and Ford his gift is enormous. It was followed by a commitment in 2006 from Warren Buffett to give 10 million shares of his Berkshire Hathaway stock, then worth $31 billion, to the Bill & Melinda Gates Foundation.
Jeff Raikes, chief executive of the foundation, brings to his job a business background. He joined Microsoft in 1981 as a product manager and eventually became part of Microsoft’s senior leadership team. With international partners and government officials gathered in Seattle last week about an initiative to help the developing world’s poor protect their savings, Raikes took time to answer some questions about the foundation’s mission and strategy.
Q. Just how big is the Gates foundation?
A. We have an endowment of $36 billion, nearly 900 employees, and partnerships with thousands of NGOs, businesses, and governments. We are focused on being a catalyst – working with others to innovate and create new ideas and solutions to the world’s toughest problems – that can be scaled up and sustained by the private sector and/or public sector for lasting impact.
We have made a 10-year, $10 billion commitment to vaccines because we believe vaccines are the best investment you can make for saving lives, bar none. Because of polio vaccines, we’re on the verge of eradicating polio from the world. A measles vaccine costs about 25 cents per dose, and two doses protect a child for a lifetime, but delivering vaccines worldwide takes an enormous logistical effort. We are fortunate that we have the money and the people – and, most importantly, the partnerships with pharmaceutical companies, research institutes, multilaterals like the GAVI Alliance, government immunization programs, and dedicated nonprofits all over the world – to help make sure that many more children get the benefit of more and better vaccines.
Q: So that means you’re giving away … how much a year?
A: Last year, the foundation made $3 billion in grant payments. Since we got started, the foundation has given away more than $23 billion.
Q: This week, you announced that Gates would spend half a billion dollars over the next five years – on top of half a billion over the past four years – to help establish ways for poor people to save money in developing countries. Most development organizations seem more focused on lending money to the poor, not helping them to save it. Why is that important?
A: There is a lot of evidence that the poor can and do save. Unfortunately, they usually have to resort to risky methods – like hiding cash under a mattress, investing in livestock, or buying jewelry – because they don’t have access to bank accounts.
When families save, they can get through emergencies like a bad harvest or a medical emergency. But it’s more than that. They can also plan for the future, gradually saving up for a small business or for their children’s school tuition.
Let me point out two of the big innovations we’re seeing. First, more and more countries are experimenting with agent banking, which means that people can bank at the corner store where they shop every day, instead of having to spend a whole day on the bus to get to a bank branch. Second, as mobile phones continue to spread, more and more people are storing and transferring cash on their phones. It’s such an inexpensive and safe way to save that it’s no exaggeration to call mobile phones a breakthrough technology for financial services.
Q: Disease is also a cornerstone of the foundation’s work. Here again, what is your niche? Isn’t there a lot of research being done by big companies, universities and others?
A: There are diseases we don’t work on, for precisely the reason you point out: that others are already investing in them. Cancer is a great example. It’s a horrible disease, and we want to see it cured just as much as the American Cancer Society or the Susan G. Komen Foundation. But we realized that our investments wouldn’t move the needle in the area of cancer research and development, because there are so many others focused on it already.
On the other hand, the diseases of the poor world get a tiny fraction of the attention cancer gets. People in rich countries don’t die of diarrhea, and so for a long time, nobody was interested in rotavirus, which is the leading cause of diarrhea. Yet, rotavirus kills 500,000 kids every year in poor countries. We’re proud to say that now there is a vaccine for rotavirus, and we’re working with our partners to make sure that children can get it.
Our investments in things like vaccines, malaria, tuberculosis, and polio are targeted at the gaps where others aren’t necessarily investing. We think that’s how we can add the most value.
Q: Can you give two examples of areas where the foundation’s approach has failed? Has the foundation put those examples aside, or has it come back at the same places in new ways?
A: There’s no doubt that we’ve done things that didn’t get the results we were looking for. But, we’re not afraid of failure. We can tolerate more risk than governments and businesses.
Even bad results teach you something, and you can learn your lessons and get better.
Our earliest investments in education focused on opening new schools. Our expectation was that once enough new schools were getting great results, people everywhere would start opening schools based on the same principles. Well, our partners opened some very impressive schools, but it didn’t have the impact on the entire education system that we thought it would. We haven’t abandoned education, because we still believe in the reasons we got involved in the first place. But we have refined our approach, and we will continue to do so.
The foundation’s efforts to develop a microbicide spray that women can use to inhibit the spread of HIV might fail, but even if it fails, we can learn from it and build on it. A typical venture capitalist might back 20 ventures. The majority will fail, but you should hit one home run as well.
Strategies and grants that don’t fully succeed are only a failure if we don’t learn from them.