 27 Jan 2002 @ 16:03, by Flemming Funch
One might say many less than pleasant things about Bill Gates. But he and his wife have also created the biggest humanitarian foundation in history, and have funded it with 24 billion dollars. Its focus is increasingly on health conditions in the developing world. See article on MSNBC.
BillÂ’s Biggest Bet Yet
The richest people on earth have created a fund of more than $24 billion to save the poorest from disease. How much of a difference can Bill and Melinda Gates make?
By Geoffrey Cowley, Newsweek
[... preceeding segment about Haiti left out ...]
A gaggle of khaki-clad Microsoft executives are seated in a small conference room across the hall from Bill GatesÂ’s office. TheyÂ’ll have to wait a few more minutes. Right now he is focused on the same question as the folks in Port-au-Prince: What can we do?
If youÂ’re the richest man on earth, itÂ’s not a rhetorical question. Gates could probably buy Haiti without a mortgage, but he isnÂ’t looking to rescue a particular country. His goal is to bridge the most fundamental gap separating the poor countries of the world from the rich ones: the gap in human health. His manner doesnÂ’t betray a lot of softhearted emotion; he rocks slightly as he talks, using eye contact only as punctuation. He speaks more freely of strategies than goals, and seems more moved by numbers than by anecdotes. But the numbers are daunting and he knows them by heart. Infections that can be prevented or treated for pennies are killing 11 million people every year. Two billion lack access to basic, low-cost medicine, such as penicillin. As U.S. life expectancy approaches 80, some 27 countries have yet to achieve life expectancies of 50.
FOCUS ON HEALTH
To a man like Gates, this is not just an outrage but an opportunity—one he is uniquely positioned to seize. Over the past several years, Gates and his wife, Melinda, have created what is now the largest foundation in history. Its assets stand at more than $24 billion. And though it supports some programs to improve schools and wire libraries to the Internet, its primary focus is health. Nothing about the foundation is conventional. Instead of turning it over to a board of directors, Gates placed his dad and a longtime friend in charge. And applying his legendary business sense to the enterprise, he has helped create a whole new model of philanthropy—a spare, lean, entrepreneurial model that employs leverage instead of largesse to make things happen.
Any student of Gates’s mind and methods will find the strategy familiar. In his 20s, he made Microsoft a giant by leveraging the power of its software, licensing it to computer makers and helping to create a vast new market for PCs. In his 30s, his critics argue, he leveraged Microsoft’s dominance in operating systems to give an unfair advantage to the firm’s other products. Now in his 40s, he’s using similar strategies to get the most out of his philanthropic buck. The Gates Foundation often makes grants only on condition that governments or other nonprofits match them, and requires that recipients meet regular goals for performance—or risk losing their funding. (That hardball approach has met with criticism from some members of the philanthropic community, who argue that holding people to ambitious standards may make sense in Redmond but not in places where millions can’t read.) And experts have calculated that improvements in health care themselves have a huge ripple effect in the poorest countries: if parents believe their children will live longer, they save more and reproduce less. That will help create capital for investment, which will spur more development and so on, in a “positive feedback loop,” as the techies like to say in Redmond. As you enter the Gates Foundation’s newly finished Seattle headquarters, the term “venture philanthropy” immediately makes sense. In contrast to the posh style of an old-line charity, this one is housed in a refurbished check-processing plant that abuts a working dock on Lake Union. There is no imposing nameplate on the building, just a street number. The interior is all clean lines; up-to-the-minute workstations sport dockable laptops. In the hallways, junior staffers mix casually with senior officers and global health experts. The only necktie on the premises belongs to Dr. Gordon Perkin, the physician and family-planning expert who directs the foundation’s global health program. But no one is in retirement mode—not even the nearly seven-foot-tall paterfamilias Bill Gates Sr., a retired lawyer who serves as the foundation’s CEO. Patty Stonesifer, the former Microsoft executive who co-chairs the foundation with Bill Sr., is under 50 but works full time without a salary, having cashed out enough Microsoft stock to live on. Joe Cerrell, the foundation’s public-affairs director, worked in the Clinton White House as an aide to Al Gore, but says nothing he did there had the intensity of this mission—or the sense of possibility. It’s little wonder. The whole staff includes only 216 people, and any one of the foundation’s projects could employ them all. The core health efforts include a drive to cut maternal mortality in poor countries, where women die during pregnancy and childbirth at rates up to 200 times those seen in the United States; a program to expand access to traditional childhood vaccines in 74 countries; an effort to speed the introduction of new vaccines in the developing world (high prices normally keep them out until patents expire), plus initiatives to develop the first effective vaccines against AIDS and malaria, which together kill 4 million people a year.
A LACK OF INFRASTRUCTURE
The Gates Foundation pursues academic solutions to killer diseases, but it also works to remove some of the absurd obstacles to health that are so common in the developing world. Even the poorest countries can usually obtain the half-dozen basic vaccines that American kids have received for the past half century. Yet many still lack the “infrastructure”—nurses, syringes, refrigerators—to deliver them. According to protocol, for instance, fieldworkers usually discard a vaccine if they’re unsure of its freshness—a precaution that results in immense waste. One of Perkin’s favorite breakthrough technologies is a three-cent sticker containing a polymer that darkens in response to heat, enabling anyone to tell whether the contents of a vial are spoiled. The foundation is also promoting a disposable, pre-filled injection device called Uniject, which eliminates the need for syringes and can’t spread infection through repeated use. “Anyone can learn to use one of these in five minutes,” Perkin says, pulling one from his pocket and tossing it on his desk. “In Indonesia, where a lot of babies are exposed to hepatitis B during birth, you can have midwives immunize them right away. It stops the infection.” How did Bill Gates become so dedicated to world health? Many people find it surprising, if not suspicious, that the cold-eyed supernerd who built Microsoft would focus so intently on the plight of women and children in the Third World. Critics accused him of taking up charity to soften his image during the government’s antitrust lawsuit against Microsoft, but that ended and his resolve has not faded. In truth, his family and friends say Gates’s new mission is not a departure but an extension of two forces that were there all along: his family’s longstanding involvement in philanthropy, and his own passion for high-stakes investing and problem-solving. It did take a nudge to get him started. During the late ’80s and early ’90s, as Microsoft became a behemoth, the pressure to give something back was enormous. But young Bill was content to ignore it. “His mother and I were always pushing and prodding about doing the appropriate thing in terms of good citizenship,” recalls his father, who along with Gates’s late mother, Mary Maxwell Gates, was active in Seattle-area civic activities. “The consistent answer was, ‘Mother, Mother, I’ve got a company to run. The best thing I can do for the community is to have this business succeed’.” Concerned that too many pleas were going unanswered, Bill Sr. eventually volunteered to keep track of the mail and send out responses.
OTHER POSSIBILITIES
By 1994, that errand had blossomed into a full-time job, and the father had persuaded Bill and Melinda to consolidate a growing patchwork of charitable efforts by forming a foundation. Bill Sr. and Stonesifer signed on as co-chairs—he acting as CEO, she as president—and they started meeting regularly with Bill and Melinda to thrash out possibilities for doing good. Entrusted with a modest $94 million, they focused at first on getting computers into schools and libraries (an effort sometimes criticized for helping expand the software market). But Bill Sr. encouraged the couple to think about other possibilities, and in 1998 they stumbled onto health. For Bill Jr., the impetus was a compelling set of statistics. Stonesifer describes Melinda as a “see it, touch it, feel it” person, Bill as an “academic learner” who was shocked by a 1998 newspaper article documenting the discrepancies in income, health care and life expectancy in different parts of the world. Poor countries were carrying 90 percent of the world’s disease burden but receiving only 10 percent of its health resources. And these widespread medieval health conditions were thwarting social and economic development. “Trey sent me that article,” his father recalls, using Bill’s childhood nickname. “And he said, ‘Dad, maybe we could do something about this’.” The Bill and Melinda Gates Foundation is funding local programs to train health workers and vaccinate kids in Mozambique, where 20 percent of all children die before age five
The health effort started modestly, in 1998, as a $100 million program to speed delivery of new vaccines to poor countries. But the Gateses unveiled a larger, $750 million vaccine fund a year later. The huge pledge made news around the world, but its size was no more significant than the way it was set up. Instead of keeping the new fund isolated within the foundation—and duplicating the efforts of the half-dozen agencies already working to increase vaccine use—he linked it to the Global Alliance for Vaccines and Immunization (GAVI), a coalition representing all those agencies. As GAVI’s financial arm, the Vaccine Fund became a magnet for other donors (it has grown to $1.2 billion). And with such resources at hand, health advocates who had spent a decade fighting over crumbs discovered they could work together. “Suddenly it wasn’t a question of getting your share,” says William Muraskin, a medical historian at Queens College in New York. “There was enough for everybody.”
‘WE’RE HERE TO ACT AS A CATALYST’
The Gates Foundation has since grown vastly larger than the Vaccine Fund, but it still employs the same principles. It treats grant recipients as business partners, auditing their performance and demanding that they contribute whatever they can to a project. Governments, however strapped, typically have to increase their own health spending to qualify for help. And before funding a new initiative, the Gates team demands evidence that it will become self-sustaining in the future. “We’re not here to feed a machine,” says Stonesifer. “We’re here to act as a catalyst.” Nor does Gates defer quietly to the experts he has assembled. He participates directly in the foundation’s affairs, signing off on each major grant the organization approves. And though he doesn’t travel as much as Melinda, he has gained a reputation for devouring immunology texts and development reports during family vacations, and for questioning grant proposals with the zeal of a dissertation adviser. “We send him a two-foot stack of reading material every few months,” says Perkin. “He comes back with technical questions that take real work to answer. At this point, I think he knows as much about vaccines as we do.” Well, not quite as much, but Gates has lit a bonfire under the companies that make them. “Technology is created in response to market pressures,” United Nations experts wrote in a recent development report, “not the needs of poor people, who have little purchasing power.” Health advocates have traditionally blamed the drug industry. As a businessman, Gates knows that private companies can’t rationally spend their money developing vaccines for people who have no money to buy them. Instead of scolding them, the foundation finances their long-shot R&D efforts and helps ensure that breakthrough products will be used. The Gates-backed International AIDS Vaccine Initiative now has a half-dozen compounds in development. And the Malaria Vaccine Initiative is pushing eight separate efforts to arm the body against the mosquito-borne plasmodium parasite. Even with good luck, plentiful funds and the work schedule of a software tycoon, these efforts will take a decade or more to bear fruit. But the foundation is pushing more immediate measures as well, and many of them are changing people’s lives. In Mozambique, where 20 percent of all children die before the age of 5, the foundation is funding local programs aimed at training health workers and vaccinating kids against tetanus, diphtheria, pertussis and hepatitis B. Gates-backed researchers are closely tracking malarial incidence in the rural Manhica region, using bicycles, motorbikes and handheld global positioning devices to monitor every household within a 10-kilometer radius of the local hospital. Sick kids sleep two and three to a bed in the hospital’s crude wards, but each of them now gets medication. And beginning this summer, volunteers from around the area will take part in a Gates-funded vaccine trial. Saving people’s lives is sometimes even simpler. Three hours north of Port-au-Prince, high above the coastal town of Montrouis, sits a tiny village called Ivwa. The peasants who live there coax corn, beans and sorghum from the rocky hillsides, and count themselves lucky when they have enough to eat. The settlement lacks water most of the year, so the women fill buckets at a well in Montrouis and haul them up the mountain on their heads. Babies arrive often—it’s not unusual for a couple to bear seven or eight children—but survival is never a sure thing. “There are some who don’t get to the age of 5,” a villager explains matter-of-factly, “and some who die at 10 days, or 8 months or 2 years.”
PROVIDING THE BASICS
One of the Gates Foundation’s Haitian partners is a group called World Neighbors, an Oklahoma-based organization that has worked in Ivwa since 1996. When the group’s Haitian country director, agronomist Cantave Jean-Baptiste, arrived in the village, it still had no latrine. Farmers were using sticks instead of pickaxes to till the land, and most were planting seeds borrowed from usurers at interest rates of 200 percent. Armed with little more than information, Jean-Baptiste and two community organizers helped the peasants start a tool bank, a seed bank and a savings-and-loan with assets of $2,200. Thanks to a Gates Foundation grant, Ivwa also has a burgeoning grass-roots health program. Launched in 1999, the Gates-backed health effort employs a pair of nurses who travel from village to village, training local health volunteers who then become teachers themselves. Every Wednesday morning, several dozen volunteers visit the area’s churches and outdoor markets to share the insights they’ve gained. Their tools are humble—condoms, chlorine tablets, oral rehydration formula—but the knowledge they share is transforming. People accustomed to blaming voodoo magic for their maladies discover that hygiene and clean water count, too. Midwives learn to recognize trouble in a pregnancy before it’s too late to trek to a clinic. And couples discover the link between family planning and prosperity. Statistics are scarce in this region, but when the peasants met recently in Ivwa’s cinder-block meeting hall, they loudly affirmed they were having fewer babies, and seeing more of them grow up. Gates has more than met his dad’s expectations. When the elder Gates stood up recently to accept a medal of philanthropy from the Carnegie Corporation, he spoke of being “one proud father,” then teared up as he said, “I only wish his mother were here to see this.” But the task at hand is still huge. When world leaders rang in the new century with a Millennium Summit in New York two years ago, they embraced the ideal of basic health for all and set a series of specific goals for the year 2015. Some 66 countries are now on track to reduce childhood deaths by two thirds, as the leaders resolved. Yet the United Nations reports that 93 countries are either falling behind in the effort or actively losing ground, thanks mainly to a lack of political will. Gates says his own dream is to “get rich-world health conditions to be a human right that you take for granted.” Will he live to see that happen? Probably not, he concedes. But the prospect of smaller victories keeps his spirits up. “You can’t address all the political, social and environmental issues at once,” he says. “But with tools like vaccination you can reduce people’s suffering.” As health improves and birthrates decline, social and economic progress almost always follow. As Gates likes to say, better health is an end in itself, but it has countless virtuous side effects. It’s a lever, in other words, and he’s got $24 billion pushing it.
With Tom Masland in Mozambique and Anne Underwood in New York
© 2002 Newsweek, Inc.
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