Bill and Melinda Gates Reflect on Need for Global Philanthropy

December 20, 2006 at 6:25 PM EDT

JUDY WOODRUFF, NewsHour Special Correspondent: They have given a new meaning to the term “power couple.” Bill and Melinda Gates are not only the richest couple on the planet; they have become one of the most influential philanthropic forces in the world, often donating more money than many governments and countries.

Their foundation has an endowment of $32 billion. It was created in the ’90s, after Bill Gates accumulated tens of billions in profits as the co–founder of Microsoft. Back then, the company was under fire when the U.S. Justice Department brought an antitrust case against Microsoft for some of its business practices. The two sides eventually settled the case.

Since then, the foundation has granted more than $11 billion, much of it to support public health efforts in more than 100 countries.

The Gates’ role is not simply ceremonial, either: Both are closely involved on a regular basis, whether it’s tracking the work of the AIDS clinics they fund in India, pushing for a new malaria vaccine at a White House summit, or donating new funds this week to buy drugs to fight tropical diseases, such as river blindness.

In the United States, they have become a major player in the field of education. Their college scholarships topped $1 billion, and they have spent more than a billion dollars in high school reform in more than 1,800 schools, much of it by creating smaller schools.

Bill Gates also tried to draw attention to the subject in a speech last year.

BILL GATES, Founder, Microsoft: When we looked at the millions of students that our high schools were not preparing for higher education and we looked at the damaging impact that it has on their lives, we came to a painful conclusion, and that is that America’s high schools are obsolete.

JUDY WOODRUFF: The Gates’ effort got an historic boost this year when the world’s second richest man, Warren Buffett, announced that he would leave most of his fortune to their foundation, thus making him its third trustee.

I sat down with Bill and Melinda Gates last Friday at the Microsoft headquarters in Redmond, Washington.

Thank you very much, Bill Gates, Melinda Gates, for talking with us. We appreciate it.

Last June, big splash. Warren Buffett, the investor, announces that he is giving the bulk of his enormous fortune, $31 billion, to the Bill and Melinda Gates Foundation. First question: Has this changed what you do? And if so, how?

MELINDA GATES, Philanthropist: Well, I think, for both of us, it’s made us re-look at the priorities that we have for the foundation, make sure that they’re the right ones, and we feel very good about what we’ve already been doing. I think that’s what Warren saw that he liked, was our focus on global health, our focus on the U.S. education system.

But, really, we’re going back to the work and saying, how do we deepen what we do? We’re very committed to making sure that the issues we’re already tackling, that we go deeper and not broader on those.

JUDY WOODRUFF: Do you feel it’s changed things with the foundation?

BILL GATES: Well, it’s exciting to have what’s literally a doubling of the resources. And it means that, as we have success, as we get new vaccines, new drugs, we’ll be able to play an even stronger role, working with governments to get those out there.

So it’s not like we’ve taken on a new mission, but we’re going to be able to do it far better, far faster, because Warren has made this unbelievable gift.

Deciding where to give

Bill Gates
Bill and Melinda Gates Foundation
We picked global health because it's the greatest inequity, that children are dying, literally millions, that shouldn't.

JUDY WOODRUFF: How do you decide -- there are so many good causes out there, so many things you can give money to -- how do you decide what's the right thing for you to address?

BILL GATES: We picked global health because it's the greatest inequity, that children are dying, literally millions, that shouldn't. The AIDS epidemic is growing, and we want to make sure that these breakthroughs in science are applied to those diseases.

They weren't being, because there's no market there, and so it takes philanthropy and the government to come in. The second cause is to say, what's the biggest thing that can help the United States renew its excellence? And there we picked education and chose a focus on high schools.

JUDY WOODRUFF: Do you ever go back and say, you know, you've given your money to this, but you think, you see another problem, you pick up the newspaper, and you read about something else. I mean, how do you resist wanting to give to so many more things?

MELINDA GATES: Well, I think, when we look at the problems that we're already trying to face, they're so enormous, they're so intractable, that I pretty much look at a new dollar and say, you know, would I rather give that to a child who's dying of malaria or give it to this other cause?

And, yes, the other cause might look great, but I know what it's going to take for us to tackle malaria. It's enormous. And so I feel like the priorities we've set, we both feel so good about them, and we keep going back over them.

JUDY WOODRUFF: Do you feel you have the accountability built in to what you're doing when you're giving away so much money?

MELINDA GATES: That's part of our granting process now. I think maybe in the early days, it wasn't something we were quite as good at as we are now, but it's absolutely built in.

I mean, we look at that global vaccine initiative program, and we say, how many vaccines were delivered? A hundred and fifteen million people got vaccines that they would not have gotten before. And so that's all part of it.

And so when we look to re-invest in vaccines, we are looking to say: Did we really make a difference, in terms of children getting vaccinated?

Or New York City, in education, the schools that we invested in there, the graduate -- we're having our first cohort of students graduating from these U.S. high schools in New York. The graduation rate in the schools we were working in before was about 31 percent, and this year it's 73 percent.

So absolutely we feel like we're building in the measurements to know whether those investments work.

Education, health top priorities

Melinda Gates
Bill and Melinda Gates Foundation
Math and science, there needs to be a curriculum change, and sometimes even teacher training to make sure that we're teaching the right things to students.

JUDY WOODRUFF: Well, speaking of education, Mr. Gates, you made big headlines last year when you gave that speech in early 2005 and said that the American school system, in effect, is broken, is obsolete. Do you still believe that?

BILL GATES: Yes, I believe that the system does not embrace getting every kid to want to stay in the high school and get a level of education that qualifies them for the good jobs that will be out there.

There's an acceptance of a tiering approach, where over a third of the students never graduate, and another third are trapped into a situation where they don't have the skills that are going to give them a good lifetime outcome. So I think we owe it to the kids in the school that what we're doing for that top third, that we try and do that for everyone.

JUDY WOODRUFF: The reports coming back are that, yes, there's been some improvement, but in terms of academic achievement, improved only slightly, and in math, it appears to have gone down. What lesson is there from that?

MELINDA GATES: I think, well, there have been several lessons for us in education. One is you can't just work -- it would be great to work in just new schools or new models of schools, but we're realizing that you have to work at the district and the state level. You have to have policy changes that support these 1,800 schools that we're working in.

And as well, I think we're looking and saying, my gosh, we have to work on curriculum. It would be nice if the curriculum that was there really worked, but, as you start to look at it, we're realizing that the gains we're making are in reading and in English and some of those areas.

But you're absolutely right: Math and science, there needs to be a curriculum change, and sometimes even teacher training to make sure that we're teaching the right things to students.

JUDY WOODRUFF: But do you ever think, in the middle of the night when you wake up, do you ever have a fear, 10 years from now, you'll look back and think, "We should have directed the money somehow differently"?

MELINDA GATES: I don't think we think that. We certainly wake up in the middle of the night and say, you know, what lessons do we learn? What did we learn?

We're not afraid to make mistakes, so there are going to be things in the next 10 years where we'll try something, we'll push on a lot of vaccine candidates for malaria or HIV. Some of them won't work; we know some of them will be a dead-end, but we'll learn from those and we'll turn.

And you keep learning and you -- it's like business. You take those lessons, and you apply them to the next place. So neither of us fear that we're mis-investing the money. It's more of that, hey, what are we learning from this and how do we keep pushing forward?

BILL GATES: The impact of improving health is that the population growth goes down, and so you can educate more kids, feed more kids. It's paradoxical that, when you have better health, families choose to have less children, because they've been having enough children so that they can be sure that a few of them will survive and take care of them. So as health improves, then all the other problems are dramatically easier to tackle.

MELINDA GATES: When we got into this work initially, it was news to us that, as you made sure that women were not only educated but that you saved more of their children, that they would absolutely decrease the number of children. They're looking to have enough children to grow up and have a healthy lifestyle. And when they see that that opportunity is there, they start to naturally, you know, have smaller families.

Program oversight

Bill Gates
Bill and Melinda Gates Foundation
At the trustee level, we've picked the things that we care deeply about. Additional overhead or larger committees I don't think would improve anything.

JUDY WOODRUFF: Take us a little bit inside the decision-making process. How do the two of you make decisions? You've talked about taking long walks together, but what does each one of you bring to these tough decisions?

BILL GATES: Well, the decisions are a lot about who we're going to partner with on particular things. So the staff goes out, does a lot of work, writes things up that we get to review.

And that, you know, gives us an update on what's going on in that area. We might have some suggestions on how they might do it a bit differently. We both read it, and it's fun for us to discuss those things.

MELINDA GATES: And sometimes we'll both have a series of questions, different set of questions, that we'll pose to each other or we'll pose back to the foundation. They'll answer those, and then we'll have even a second discussion over, what do you think about this? Both of us also see a lot more out in the U.S. education system or in the developing world, and we bring that to the decision-making, as well.

JUDY WOODRUFF: I did talk to some foundation folks preparing for this interview, and one of the questions they raised was: How can an organization with three trustees make the right decisions for so much money?

BILL GATES: I don't think that good decisions are made by having, you know, 30 trustees or 300 trustees. At the trustee level, we've picked the things that we care deeply about. Additional overhead or larger committees I don't think would improve anything.

MELINDA GATES: But that said, the other thing we are doing in 2007, which is new for us, was take each of the large program areas -- the U.S. program area, the global development and global health -- and we're going to devise specific advisory boards in those areas with people with deep knowledge in the areas to give us advice.

JUDY WOODRUFF: Here's another comment from some folks out in the foundation. Well, you mentioned the necessity of getting governments involved. It's not enough, obviously, for the private sector.

One of the points they made was, when you have so much money to pour at these problems, in some instances you're going to drive out, not only other foundations, but even governments. Do you worry, do you think sometimes we're going to drive others out? How do you deal with that?

MELINDA GATES: The goal in everything that we do is to bring governments into what we're doing. So it's an area that we have to be careful of, but it's also an area sometimes where you can lead the way and make sure that others will come through.

JUDY WOODRUFF: I guess the underlying question that some had was, can a philanthropy be too big to be effective? What do you think?

BILL GATES: I think that millions of kids dying a year is a very big problem, and you've got to be able to bring in top experts. If there's some other way to come up with a malaria vaccine, come up with an AIDS vaccine, I'm all ears to it.

Our foundation is going to be hundreds of health experts, but it's not just us. It's the universities that are going through the grant process. It's the advisers helping us pick those people to work with. It's how we've teamed up now with the pharmaceutical companies in some ways, where we're able to get their expertise in.

So it's a very broad enterprise going after global health, even in education or granting through intermediaries who are showing their track record, so you shouldn't think of this as something where just a few people are deciding things. There's a process here that has brought way more expertise to bear on these problems than ever was there before.

MELINDA GATES: And I think you also have to look at something like the NIH budget. Their annual budget is $30 billion a year. In one year, we spent in global health -- I hope we made some huge changes; we think we did in the last year -- but our budget was about $840 million. So, I mean, just to give you the factor, and the diseases we're going after are absolutely enormous, so it takes all of these people to move things forward.

U.S. relations with the world

Melinda Gates
Bill and Melinda Gates Foundation
[I]f people could really have an understanding that the people in these villages are just like us and that they are our neighbors, and so we need to do everything that we can to help lift them up.

JUDY WOODRUFF: Let me just ask you a couple of questions related to stepping back and looking at this country and the world. Is the United States right now getting the political leadership -- and I'm not asking you to pass judgment on any particular politician or another -- but do we have the kind of political leadership we need to get us through the next decades?

BILL GATES: Well, there's a real question of whether the U.S. will be viewed positively, in terms of, are we bringing health advances? Are we bringing in aid that's really effective? I think that's very important for the country. And right now, there's somewhat of a deficit of how we're perceived.

JUDY WOODRUFF: Because of the Iraq war?

BILL GATES: Yes, we're known more for hard power and how we're projecting that out and some of the resentments that creates. And that's not -- you know, sometimes that's necessary, but it's not complemented by seeing the scale of, "Here's what we're going to do in health and these other things."

Now, there actually has been an increase, so we're headed in the right direction. The AIDS program was a substantial increase. But relative to European countries, the United States is far less generous on these issues, and there's an expectation that, if we want to be perceived the right way and on the same side as these other countries, that we're going to have to put more into it.

JUDY WOODRUFF: So as we approach the Christmas season, a new year, what are your hopes for this country? And I have to ask both of you, when people look at you, and they think you have everything, so what do you want for Christmas?

MELINDA GATES: I think we just want our good health and our kids to be happy and healthy. I think that's a huge thing to us at the Christmas season. And as I approach the new year, I certainly think a lot about, you know, keeping these issues on the top of the agenda, making sure the American people know how important it is to work on something like AIDS in the developing world.

We often say to ourselves, if Americans -- if the people that we see often in Africa or in India, who are living in some of these impoverished situations, and with AIDS or with malaria, if they were your next-door neighbor and they lived next door to you, and you saw their child dying, you wouldn't let that happen.

You'd do something, right? We take action when we see things happening in the United States. And so often I think, if people could really have an understanding that the people in these villages are just like us and that they are our neighbors, and so we need to do everything that we can to help lift them up and have some of the benefits of these great things that we have in the United States.

JUDY WOODRUFF: And it never makes you angry that there isn't more attention?

BILL GATES: If anger would solve the problem. But, instead, it's got to be showing people that we can be hopeful that there will be improvement, showing them that, when the U.S. has put money into these things, that it really has made a difference. We have to be smart about that, and we've got some partners who are helping with that. And we're hopefully doing a better job on it. But, you know, we need to do better.

JUDY WOODRUFF: Well, Melinda Gates, Bill Gates, thank you very much for talking with us. We appreciate it.

MELINDA GATES: Thanks, Judy. Thanks for having us.