Our 2017 annual letter is addressed to our dear friend Warren Buffett, who in 2006 donated the bulk of his fortune to our foundation to fight disease and reduce inequity. A few months ago, Warren asked us to reflect on what impact his gift has had on the world.
Dear Bill and Melinda,
Two years ago, I hit the 50-year mark as CEO of Berkshire and used the occasion to write a
special report to the company’s owners. I reflected on what had gone particularly well or
poorly, what I’d learned, and what I hoped would get done in the future.
As you might guess, I ended up being the prime beneficiary of this effort. There’s nothing
like actually writing something out to clarify thinking.
It’s now been ten years since what my children call “The Big Bang,” the day in 2006 when I
made pledges to the five foundations, including yours. Having hit that milestone, I thought
you might enjoy writing a look backward and forward similar to what I did.
I’m not the only one who’d like to read it. There are many who want to know where you’ve
come from, where you’re heading and why. I also believe it’s important that people better
understand why success in philanthropy is measured differently from success in business or
government. Your letter might explain how the two of you measure yourselves and how you
would like the final scorecard to read.
Your foundation will always be in the spotlight. It’s important, therefore, that it be well
understood. And there is no better way to this understanding than personal and direct
communication from the two whose names are on the door.
Best to you both,
What follows is our answer to him.
It’s a story about the stunning gains the poorest people in the world have made over the last 25 years. This incredible progress has been made possible not only by the generosity of Warren and other philanthropists, the charitable giving of individuals across the world, and the efforts of the poor on their own behalf—but also by the huge contributions made by donor nations, which account for the vast majority of global health and development funding.
Our letter is being released amid dramatic political transitions in these countries, including new leadership in the United States and the United Kingdom. We hope this story will remind everyone why foreign aid should remain a priority—because by lifting up the poorest, we express the highest values of our nations.
One of the greatest of those values is the belief that the best investment any of us can ever make is in the lives of others. As we explain to Warren in our letter, the returns are tremendous.
Dear Warren
Our 2017 Annual Letter
Bill and Melinda Gates | February 14, 2017
Dear Warren,
Ten years ago, when we first got word of your gift to the foundation, we were speechless. It was the biggest single gift anyone ever gave anybody for anything.
We knew we owed you a fantastic return on your investment.
Of course, philanthropy isn’t like business. We don’t have sales and profits to show you. There’s no share price to report. But there are numbers we watch closely to guide our work and measure our progress.
Our goals are shared by many other organizations working to save and improve lives. We’re all in this together. So most of the numbers we look at don’t focus just on how we as a foundation are doing, but on how the world is doing—and how we see our role.
Warren, your gift doubled the foundation’s resources. It’s allowed us to expand our work in US education, support smallholder farmers, and create financial services for the poor. But in this letter, we’re going to tell you about our work in global health—because that was the starting point of our philanthropy, and it’s the majority of what we do.
We’ll tell the story through the numbers that drive our work. Let’s start with the most important one:
Our Favorite Number
Read Bill & Melinda Gates’s full 2017 Annual Letter
122 Million: The number of children’s lives saved since 1990
Bill:
If we could show you only one number that proves how life has changed for the poorest, it would be 122 million—the number of children’s lives saved since 1990.
Melinda:
Every September, the UN announces the number of children under five who died the previous year. Every year, this number breaks my heart and gives me hope. It’s tragic that so many children are dying, but every year more children live.
Bill:
More children survived in 2015 than in 2014. More survived in 2014 than in 2013, and so on. If you add it all up, 122 million children under age five have been saved over the past 25 years. These are children who would have died if mortality rates had stayed where they were in 1990.
Melinda:
Here’s one of our favorite charts. It shows that the number of childhood deaths per year has been cut in half since 1990.
© The Economist Newspaper Limited, London, September 27, 2014
Bill:
Melinda and I first started following these childhood mortality numbers more than 20 years ago. As you know, we’d taken a trip to Africa to see the wildlife, and we were startled by the poverty. When we came back, we began reading about what we’d seen. It blew our minds that millions of children in Africa were dying from diarrhea, pneumonia, and malaria. Kids in rich countries don’t die from these things. The children in Africa were dying because they were poor. To us, it was the most unjust thing in the world.
Melinda:
Saving children’s lives is the goal that launched our global work. It’s an end in itself. But then we learned it has all these other benefits as well. If parents believe their children will survive—and if they have the power to time and space their pregnancies—they choose to have fewer children.
"Saving children's lives is the goal that launched our global work."
Read Bill & Melinda Gates’s full 2017 Annual Letter
"Saving children’s lives is the goal that launched our global work."
Bill:
When a mother can choose how many children to have, her children are healthier, they’re better nourished, their mental capacities are higher—and parents have more time and money to spend on each child’s health and schooling. That’s how families and countries get out of poverty. This link between saving lives, a lower birthrate, and ending poverty was the most important early lesson Melinda and I learned about global health.
Melinda:
This is why reducing childhood mortality is the heart of the work for us. Virtually all advances in society—nutrition, education, access to contraceptives, gender equity, economic growth—show up as gains in the childhood mortality chart, and every gain in this chart shows up in gains for society.
Bill:
Back in 2001, after I gave a talk to a group of your friends about cutting childhood deaths, you told me that the foundation’s values and your values aligned. Saving children’s lives aligns with another one of your deepest values, Warren: using resources wisely and never wasting money when it can be avoided.
Bill:
Remember the laugh we had when we traveled together to Hong Kong and decided to get lunch at McDonald’s? You offered to pay, dug into your pocket, and pulled out…coupons! Melinda just found this photo of me and “the big spender.” It reminded us how much you value a good deal. That’s why we want to point you to this number, 122 million. Saving children’s lives is the best deal in philanthropy.
The Best Deal Is Vaccines
Read Bill & Melinda Gates’s full 2017 Annual Letter
86%: The percentage of children worldwide who receive basic vaccines.
Melinda:
And if you want to know the best deal within the deal—it’s vaccines. Coverage for the basic package of childhood vaccines is now the highest it’s ever been, at 86 percent. And the gap between the richest and the poorest countries is the lowest it’s ever been. Vaccines are the biggest reason for the drop in childhood deaths.
Read Bill & Melinda Gates’s full 2017 Annual Letter
Global Vaccination Coverage Is at Its Highest
Melinda:
They’re an incredible investment. The pentavalent vaccine, which protects against five deadly infections in a single shot, now costs under a dollar.
Bill:
And for every dollar spent on childhood immunizations, you get $44 in economic benefits. That includes saving the money that families lose when a child is sick and a parent can’t work.
"For every dollar spent on childhood immunizations, you get $44 in economic benefits."
Read Bill & Melinda Gates’s full 2017 Annual Letter
"For every dollar spent on childhood immunizations, you get $44 in economic benefits."
Melinda:
At the start, we just couldn’t understand why vaccines weren’t available to every child who needed them. We were naïve. There were no market incentives to serve people, and we had never seen that before.
Bill:
The market wasn’t working for vaccines for poor kids because the families who needed them couldn’t afford them. But this gave us an opening. If we could create a purchasing fund so pharmaceutical companies would have enough customers, they’d have the market incentives to develop and produce vaccines.
Melinda:
That’s the magic of philanthropy. It doesn’t need a financial return, so it can do things business can’t. But the limit of philanthropy is that the money runs out before the need is met. That’s why business and government have to play a role if the change is going to last.
Bill:
That led us to partner with business and government to set up Gavi, the Vaccine Alliance, with the goal of getting vaccines to every child in the world. Gavi connects companies who develop vaccines with wealthy governments that help with funding and developing countries that get the vaccines to their people. Since 2000, Gavi has helped immunize 580 million children around the world. The United States is a major donor to Gavi—with bipartisan support—along with the UK, Norway, Germany, France, and Canada. It’s one of the great things the rich world does for the rest of the world.
Melinda:
But there’s more to do—19 million children, many of them living in conflict zones or remote areas, are still not fully immunized. Their governments have to work harder to reach these kids. It’s crucial to the goal of cutting childhood deaths in half again—down below 3 million by 2030.
Bill:
We can get there, but we have to learn more. The childhood mortality chart is a huge success story, but it masks some areas where we’ve not made as much progress. Here’s the big one:
Reducing Newborn Mortality
Read Bill & Melinda Gates’s full 2017 Annual Letter
1 Million: Number of babies who die on the day they are born
Bill:
Last year, about one million infants died on the day they were born. A total of more than 2.5 million died in their first month of life. As the total number of childhood deaths has dropped, the proportion that are newborn deaths has gone up. Newborn deaths now represent 45 percent of all childhood deaths, up from 40 percent in 1990.
If you look at the pie chart below, you can see at a glance that well over half the newborn deaths fall into one of three categories: sepsis and other infections; asphyxia, which means the newborn isn’t getting enough oxygen; and prematurity, which means the baby was born early.
Read Bill & Melinda Gates’s full 2017 Annual Letter
Still Too Many: In 2015, 2.6 million children died in their first month of life
Melinda:
For decades now, health experts have been struggling to treat or prevent these conditions, with disappointing results. When a huge challenge comes up and you have no answer, it’s crucial to ask, “Is anyone doing this well?”
Bill:
Right, so here’s a chart I found on Gapminder.com that applies to a lot of work we do in global health. It describes health as a function of wealth. It’s pretty uniform around the world that health gets better as wealth rises. But newborn death rates have this huge variance, and not just according to income. There are some positive outliers: poor countries that are doing a better job than wealthier countries and a far better job than some of their peers.
"From 2008 through 2015…Rwanda cut its newborn mortality rate by 30 percent."
Read Bill & Melinda Gates’s full 2017 Annual Letter
"From 2008 through 2015…Rwanda cut its newborn mortality rate by 30 percent."
Melinda:
It’s super-exciting to find countries that have figured things out. From 2008 through 2015, Rwanda, one of the poorest countries in Africa, cut its newborn mortality by 30 percent, down to 19 deaths per 1,000 births. By comparison, Mali—