Council on Foundations

April 30, 2007
Remarks by Melinda French Gates

Thank you, Doug, for that kind introduction. I am so excited that this amazing conference is happening in the Gates Foundation’s home town. About 30 of my colleagues from the foundation are attending and participating in the sessions, listening and sharing ideas with you all.

I want to thank Steve Gunderson and all the folks at the Council on Foundations, and Carol Lewis and her colleagues at Philanthropy Northwest, for giving us the chance to learn from all of you.

The Council and Philanthropy Northwest are dedicated to promoting more effective philanthropy. I believe so strongly in that mission because I know how much our foundation has evolved in the past decade—and how much Bill and I have learned.

We know we didn’t invent philanthropy, or a new way of doing it. We have relied so much on those who came before us.

We have read about the field. We have met with colleagues at other foundations. We have tried to emulate organizations that have been at this a lot longer than we have—groups like the Medina and Seattle Foundations, who have shaped our efforts to fight hunger here in Washington state.

Everybody in this room knows that philanthropy isn’t easy. It can be frustrating sometimes. I am reminded of the time I saw my 3-year-old daughter trying and failing to tie her shoes. She got angry. Still, she kept trying.

“This is difficult,” she concluded. “But I like difficult.” It turns out that her parents like difficult, too. And I suspect that you all like difficult, which is why you’ve devoted your lives to solving some of the world’s toughest problems.

Bill and I always knew we would eventually commit ourselves to philanthropy. When I was growing up in Dallas, my parents stressed the importance of volunteering, and some of my most rewarding experiences were the times I spent helping out at a local hospital and a public elementary school. Bill’s family has been involved in philanthropy in Seattle for generations.

So we knew what we were going to do, but we assumed we would turn our attention to philanthropy after Microsoft, when Bill was in his 60s.

That all changed just over 10 years ago. We read an article about the millions of children who were dying every year in poor countries from diseases we don’t think much about in this country.

We fixated on a disease called rotavirus, which kills more than 600,000 children each year. Neither of us had ever even heard of it.
 
We thought, that can’t be right. If a single disease were killing that many kids, we would know about it. We’d be running races to find a cure for it. It would be front-page news. But it wasn’t. So we made two decisions: Global health would be the first focus of our giving, and we would get started right away.

Once we made the decision to start a foundation, we still had to figure out how to do it.

We knew what we stood for: that all lives have equal value—that starving children in African and Indian slums are just as precious as your children or mine, that families struggling in American inner cities matter just as much as families in safe, suburban neighborhoods. Ultimately, all people, no matter where they live, deserve a chance to live a healthy, productive life.

But how do you translate that principle into a reality for the billions of people in the world who are suffering? We think our foundation can help in two ways.

First, we aim to harness advances in science and learning so they benefit people who need them most. We are living in an age of unprecedented innovation. We can access the Internet on wireless computers that fit in our palms. We mapped the human genome. Right now, we have the ability to solve big problems like never before.

Second, we seek to encourage a sense of shared responsibility for all. That is the key to building the will to take on these big problems. We hope to persuade governments and citizens around the world that they can, and should, help people in need, no matter where they are.

Reaching our goal is going to take a willingness to learn and change. Our foundation works hard to think through problems carefully, but it’s simply impossible to get our strategies exactly right in the beginning. In the end, our effectiveness depends on our willingness to take feedback and turn it into smarter and more honed strategies. That’s what I’d like to talk about this morning.

The list of lessons Bill and I have learned since we started is just about as long as the list of mistakes we’ve made. And we’re still making mistakes and learning lessons every day.

At the beginning of April, Bill and I were in Vietnam, visiting a facility where they store vaccines for 24 different health clinics. We were excited to see a new vaccine that’s available for rotavirus, the disease that captured our attention so many years ago.

But we noticed something wasn’t right. The refrigerators in the facility were small, and the rotavirus vaccine came in a bulky package. It simply didn’t fit. If the vaccine doesn’t stay cold, it won’t save any children. All that research and development, and the problem is the size of the box!

It was a dramatic reminder that we always have to keep the needs of the people we are trying to help at the front of our minds.

In the short term, we’re working with the company that created the vaccine to solve the packaging issue. In the long term, though, we’re going to think more creatively about how to develop vaccines that don’t need to be kept cold in the first place.

Seeing where we missed something can be humbling, but it helps us understand how we can be more innovative the next time. We try to bring that spirit of learning and changing to all our work.

One of the big changes we made last year was that we started making major grants in the area of Global Development. We formed an exciting partnership with the Rockefeller Foundation, which has been helping pioneer a global revolution in agriculture for more than 50 years. Together, our goal is to help millions of African farmers lift themselves out of hunger and poverty.

We also funded pilot projects that use technology to help poor people get access to financial services. And we expanded our work with public libraries in poor countries to provide citizens with free Internet access.

We believe these grants have great potential to help people in developing countries take advantage of life’s opportunities. But it isn’t as if we woke up one morning, knew all about development, and had solutions ready to go. Getting to this stage was a long and deliberate process.

As we began in global health, a lot of experts urged us to connect our work in health to larger problems of poverty and hunger.

They asked us—and rightfully so—why do something about vaccines but nothing about clean water? Why work on tuberculosis but not on agricultural productivity? Why deliver mosquito nets but not financial services? So Bill and I started thinking more about the host of issues related to poor health.

Part of my learning took me to India in 2000. I went to find out about water-borne diseases like diarrhea and rotavirus, but I could not help learning about the problem of water itself.

In the slums, I saw children waiting in unbelievably long lines at the spigot to fill up dirty turpentine bottles. In rural communities, I talked to women who spent hours every day searching for clean water.

It just kept hitting me over the head: “How can we do this work and not be doing something about water?”

Back then, we decided we weren’t ready to branch out. We needed to develop a comprehensive strategy in one area before taking on new challenges. Dividing our attention right off the bat seemed like the wrong way to make a real impact.

In 2005, we decided we were ready to explore a wider range of problems in the developing world. The foundation put together a team to conduct a systematic study of the global development field.

We got input from as many experts as we could. The Rockefeller Foundation gave us the benefit of their decades of expertise on agricultural productivity, leading to the partnership I mentioned earlier. We made a few small development grants to start testing some of our hypotheses.

But we really got energized with Warren Buffett’s astounding gift last summer. He gave us the ability to move forward faster and go deeper into some of the areas we’d already identified. Eventually, Global Development will account for a quarter of our grantmaking.

But we don’t have it all sewn up. We’re not done learning. It was seven years ago that I started thinking seriously about water. Experts at the foundation have been studying it intensively for two years.

And we still aren’t sure whether the foundation’s particular strengths are the right match for the challenges in the field. So we continue to study whether water, sanitation, and hygiene should become one of our core initiatives.

That is how our foundation learns. We look for neglected problems, we travel so we can see for ourselves, we study, we consult with experts in the field, we try new things, and we measure the results. And in all our work, one particular lesson has been hammered home more than any other: If we’re going to have a global impact, and do it over the long haul, then governments and businesses have to be involved. They’re central to what we all do.

Our foundation has been blessed with significant resources, but by ourselves we can’t make a dent in any of the problems we focus on. Take education. Our goal is to significantly increase graduation rates across the country.

But if we spent our entire endowment, we couldn’t even cover the cost of schooling California’s students for one year. That one state spends more than $50 billion educating its children every year.

Debbie Meier, a visionary educator and one of our first grantees, helped me get a handle on the incredible dimensions of the education crisis in this country. After my conversations with Debbie, I had a better understanding of just how many variables go into school reform.

At first, our foundation focused on reforming one school at a time. We assumed that once enough great schools were up and running, all schools would start changing.

We didn’t fully appreciate all the factors that can squelch reform—things like grade reporting requirements and rules that restrict how much time teachers can spend in training. From Debbie, I learned that these systemic issues are enough to scuttle a strategy to improve high schools.

Now we work simultaneously at several levels. We don’t just partner with individual schools. We also work with school districts and state policymakers to make sure changes stick. We are not going to achieve our goals until we make an impression on the people who set policy. Until we collaborate with the people who administer all the schools.

We’ve also learned how important it is to work with the private sector. In global health, one of our main goals is to accelerate the introduction of vaccines to prevent diseases like malaria and HIV. But who has the expertise to develop vaccines? It’s not foundations. It’s not governments. It’s pharmaceutical companies.

Consider malaria. Let me give you a sense of just how deadly that disease is. Imagine there is a child in your seat. Imagine there’s a child in every seat in this room. Now imagine that every one of those children was dead.

That’s what’s happening every day in Africa: 2,000 children dying from a disease we know how to prevent. If we could all see the tragedy of malaria this clearly, we would do something about it.

But we don’t see it that way. For a century, malaria has been a classic case of market failure. It’s not that the science is too hard, though it is hard. It’s that we haven’t been working on the science. The people who need a malaria vaccine can’t afford to buy it, so there’s no incentive for companies to develop one.

At the foundation, we are trying to understand these incentives so we can work with companies toward a goal we all share. The fact is, they are obligated to make a profit for their shareholders.

We believe we can do something to make sure that business imperatives and saving lives are not mutually exclusive. Helping people in need doesn’t have to be an unsound financial model.

A great example that brings foundations, governments, and businesses together is a new device called Advance Market Commitments. Here is how they work: Governments commit money to buy, say, a malaria vaccine at a certain price as soon as a good one is available.

This guarantees pharmaceutical companies a reasonable return if they introduce vaccines for neglected diseases. And that guarantee protects them from serious risk and gives them an incentive to fight the diseases of the developing world.

We believe Advance Market Commitments can be a model of constructive engagement. They employ the strengths of all three sectors to direct advances in science and technology toward those with the most need.

In February, our foundation worked with five countries to pilot an Advance Market Commitment for a pneumococcal vaccine. If it’s developed and distributed, this vaccine could save the lives of 1 million children every year.

That is what can happen when we work together with businesses and governments. It is a lesson we have been very happy to learn.

The last few years I have spent learning these lessons have been some of the most exhilarating of my life. No one has taught me more than the people I’ve met in the field.

I remember a trip I took to Mozambique a few years ago. Bill and I met a young girl who was sick with malaria, shivering with fever, and on the verge of death. Her mother sat nearby, gently stroking her daughter’s head, fearing that she was about to lose her second child to malaria.

But today, the girl we met is alive and healthy. A great miracle happened to this beautiful child. Through a public-private partnership, she received the drugs she needed to clear the parasite from her body.

That is the power of philanthropy. That is why we are all here. We’re working together to see that miracles like this are repeated millions of times, until they’re not miracles anymore. Until they’re routine.

I often think about what we have the chance to accomplish together, in our lifetimes. I imagine a future in which the random chance of where a child is born doesn’t determine her odds of being happy and successful. I envision a different world in which suffering isn’t automatically the lot of billions of people.

I can be optimistic because there are so many of you here who have dedicated your lives to making this dream a reality.

It will be difficult. But I am hopeful—because we like difficult.

Thank you.