Moving to a green economy is the biggest challenge people have ever faced.
We are outspoken about our optimism. These days, though, optimism seems to be in short supply.
The headlines are filled with awful news. Every day brings a different story of political division, violence, or natural disaster.
Despite the headlines, we see a world that’s getting better.
Compare today to the way things were a decade or a century ago. The world is healthier and safer than ever. The number of children who die every year has been cut in half since 1990 and keeps going down. The number of mothers who die has also dropped dramatically. So has extreme poverty—declining by nearly half in just 20 years. More children are attending school. The list goes on and on.
But being an optimist isn’t about knowing that life used to be worse. It’s about knowing how life can get better. And that’s what really fuels our optimism. Although we see a lot of disease and poverty in our work—and many other big problems that need to be solved—we also see the best of humanity. We spend our time learning from scientists who are inventing cutting-edge tools to cure disease. We talk to dedicated government leaders who are being creative about prioritizing the health and well-being of people around the world. And we meet brave and brilliant individuals all over the world who are imagining new ways to transform their communities.
That’s our response when people ask, “How can you be so optimistic?” It’s a question we’ve been getting more and more, and we think the answer says a lot about how we view the world.
This is our 10th Annual Letter, and we’re marking the occasion by answering 10 tough questions that people ask us. We will answer them as forthrightly as we can, and we hope that when you’re finished reading, you’ll be just as optimistic as we are.
Melinda: Our foundation spends about $500 million a year in the United States, most of it on education. That’s a lot, but it is less than the roughly $4 billion we spend to help developing countries.
We don’t compare different people’s suffering. All suffering is a terrible tragedy. We do, however, assess our ability to help prevent different kinds of suffering. When we studied the global health landscape, we realized that our resources could have a disproportionate impact. We knew we could help save literally millions of lives. So that’s what we’ve tried to do.
Take vaccines. We assumed that since it was possible to prevent disease for a few cents or a few dollars at most, it was being taken care of. But it turned out that we were wrong, and tens of millions of kids weren’t being immunized at all.
We’ve spent $15.3 billion on vaccines over the past 18 years. And it’s been a terrific investment. Better immunization is one reason why the number of children who die has gone down by so much, from almost 10 million in 2000 to 5 million last year. That’s 5 million families that didn’t have to suffer the trauma of losing a daughter or a son, a sister or a brother.
We love our country and care deeply about the people who live here, so we are also committed to fighting inequities in the United States. All the evidence, including our personal experience, suggests that education is the key to opportunity. By 2020, two-thirds of American jobs will require post-high school education or training. Since millions of American students don’t get a high-quality education, that’s the issue we’ve been focused on for the past 18 years. Our goal is for all students to go to a school that prepares them to pursue their dreams.
Bill: We’ve been looking at how we might expand our work in the U.S. beyond education. We fund the U.S. Partnership on Mobility from Poverty, which is studying ways to help people move up the economic ladder. Although we travel extensively to learn about the lives of poor people in other countries, we’ve done less of that in America. So last fall, we took a trip to the South to learn more.
Our trip to Atlanta in October 2017.
In Atlanta, we met a single mom who told us a heartbreaking story about how she had just been evicted from her apartment for missing a rent payment while in the hospital with her newborn son. We had coffee with a few residents of an apartment complex in one of the city’s low-income neighborhoods. They showed us mold growing on the walls and ceiling of one of their homes. They told us they routinely hide their children under a bed or in the bathtub because of the sound of gunfire.
It would be an understatement to say the people we met in Atlanta faced big challenges. But they were also incredibly resilient. At a Boys and Girls Club, we met a man who uses his own money to buy lunch for the kids. We talked with former prison inmates who are now holding down jobs and raising families.
What we saw on this trip reinforced the importance of education, because it is ultimately about helping low-income students and students of color get the same opportunities as everyone else. The visit also made us think through other ways we could help people get out of poverty. The issues of economic mobility in America are deeply intertwined: education, employment, race, housing, mental health, incarceration, substance abuse. We haven’t decided how what we’ve been learning might affect our giving, but it has certainly had an effect on us. We will share more about our approach when we have settled on a strategy.
Bill: A lot, but not as much as either of us would like.
We made education the focus of our work in the United States because it is the key to a prosperous future, for individuals and the country. Unfortunately, although there’s been some progress over the past decade, America’s public schools are still falling short on important metrics, especially college completion. And the statistics are even worse for disadvantaged students.
We support early learning and postsecondary institutions, but we started with high schools, and that’s still the area in which we invest the most. We’ve learned a lot about what works in education, but the challenge has been to replicate the successes widely.
In the early 2000s, our foundation was one of the organizations that drew attention to a big flaw in the way high-school graduation rates were calculated. They were often reported at 90 percent when they were actually less than 70 percent—that is, roughly a third of students were dropping out. We funded research that identified the true graduation rate and helped build a coalition of states that agreed to use it.
To help raise those graduation rates, we supported hundreds of new secondary schools. Many of them have better achievement and graduation rates than the ones they replaced or complemented. Early on, we also supported efforts to transform low-performing schools into better ones. This is one of the toughest challenges in education. One thing we learned is that it’s extremely hard to transform low-performing schools; overall they didn’t perform as well as newly created schools. We also helped the education sector learn more about what makes a school highly effective. Strong leadership, proven instructional practices, a healthy school culture, and high expectations are all key.
We have also worked with districts across the country to help them improve the quality of teaching. This effort helped educators understand how to observe teachers, rate their performance fairly, and give them feedback they can act on. But we haven’t seen the large impact we had hoped for. For any new approach to take off, you need three things. First you have to run a pilot project showing that the approach works. Then the work has to sustain itself. Finally, the approach has to spread to other places.
How did our teacher effectiveness work do on these three tests? Its effect on students’ learning was mixed, in part because the pilot feedback systems were implemented differently in each place. The new systems were maintained in some places, such as Memphis, but not in others. And although most educators agree that teachers deserve more-useful feedback, not enough districts are making the necessary investments and systemic changes to deliver it.
To get widely adopted, an idea has to work for schools in a huge variety of settings: urban and rural, high-income and low-income, and so on. It also has to overcome the status quo. America’s schools are, by design, not a top-down system. To make significant change, you have to build consensus among a wide range of decision makers, including state governments, local school boards, administrators, teachers, and parents.
Melinda: We recently announced some changes in our education work that take these lessons into account. Everything we do in education begins as an idea that educators bring to us. They’re the ones who live and breathe this work, who have dedicated their careers to improving systems that are failing many students today, especially minority students.
That’s definitely true of our new strategy. We will work with networks of middle and high schools across the country to help them develop and implement their own strategies for overcoming the obstacles that keep students from succeeding. We will help these networks with the process: using key indicators of student success like grades and attendance to drive continuous learning and improvement. But the substance of the changes they make will depend on what local leaders and the available evidence say are most likely to be effective.
Some networks of schools will focus on approaches that we have a lot of experience with, like stronger curricula and teacher feedback systems. Others will look at areas that are new to us, like mentoring programs to ease the difficult transitions from middle to high school and high school to college.
Our role will be to support the schools as they design changes, gather and analyze data, and make adjustments over time based on what they’re learning.
Bill: We do! Some of it involves our foundation, and some of it involves our own personal investments.
Personally, we’re investing in innovations that will cut back on greenhouse gases (what’s called climate-change mitigation). The world needs new sources of reliable, affordable clean energy, but it has been dramatically underfunding the research that would produce these breakthroughs.
This funding gap is different from the problems we work on at the foundation. In philanthropy, you look for problems that can’t be fixed by the market or governments. The clean-energy problem can be fixed by both—as long as governments fund basic research and create incentives to reduce greenhouse gas emissions and investors are patient while companies turn that research into marketable products. That’s why I’m working on it personally rather than through our foundation.
In the past two years, there’s been a lot of progress. Twenty-three countries have committed to doubling their investments in clean-energy research by 2020. Breakthrough Energy Ventures, a private investment fund I am involved with, now has more than $1 billion from a variety of investors and will fund companies in several areas (such as grid-scale storage and geothermal power) that are ripe for innovation. BEV will also be working with a coalition of other clean-energy investors to connect them with governments. Right now, public and private spending on clean energy isn’t coordinated, which is one reason some promising technologies don’t make it to market. We want to bridge that gap.
Melinda: Even breakthrough technology can’t stop the weather from changing. So the world needs to adapt to what’s happening now and what we know is coming. That’s why our foundation’s work, especially in global agriculture, is increasingly focused on climate issues.
Hundreds of millions of people in developing countries depend on farming for their livelihoods. They had almost nothing to do with causing climate change, but they will suffer the most from it. When extreme weather ruins their harvest, they won’t have food to eat that year. They won’t have income to spend on basic necessities like health care and school fees. For smallholder farmers, climate change is not just an ominous global trend. It is a daily emergency.
Green Super Rice and Scuba Rice, which this farmer has planted, have been bred to withstand extreme weather.
But just as innovation can limit climate change, it can also help people cope with it. We invest to help farmers be more productive, so that they’ll have more buffer to withstand lean years when they come. We also invest in climate-smart crops that are less susceptible to extreme heat and cold, drought and flooding, and diseases and pests. For example, we’re working with partners including the Chinese Academy of Agricultural Science to develop varieties of rice that tolerate drought and require less fertilizer, herbicide, and pesticide. Innovations like this “Green Super Rice” could be key to fighting poverty and feeding the world in the decades to come.
Bill: On one level, I think the answer is obviously no. The idea that children shouldn’t die of malaria or be malnourished is not just our value. It’s a human value. Parents in every culture want their children to survive and thrive.
Sometimes, though, the person asking this question is raising a deeper issue. It’s not so much a question about what we do, but how we do it. Do we really understand people’s needs? Are we working with people on the ground?
Melinda: We’re acutely aware that some development programs in the past were led by people who assumed they knew better than the people they were trying to help. We’ve learned over the years that listening and understanding people’s needs from their perspective is not only more respectful—it’s also more effective.
Our foundation is designed with this principle in mind. When we say “we” work on a certain issue, we don’t mean that Bill or I or the foundation’s employees are installing sewage systems in rapidly growing cities, delivering treatments for river blindness, or training farmers to rotate their crops. What we mean is that we fund organizations with years and sometimes decades of local experience that do those things. These organizations, our thousands of partners, keep us connected to the people we’re trying to help.
We have about 1,500 employees in offices on four continents who look at the data, survey the universe of possible approaches, study what’s worked and what hasn’t, and develop strategies that we believe will maximize our impact. But one of the most important parts of their job is to listen to partners, adjust the strategies based on what they hear, and give implementers the leeway to use their expertise and their local knowledge. That’s not to say we always get it right. We don’t. But we try to approach our work with humility about what we don’t know and the determination to learn from our mistakes.
On top of relying on local partners, we also have a strong conviction about the importance of empowerment. We aren’t interested in making choices for anyone. We invest in family planning, for example, not because we have a vision of what other people’s families should look like but because parents around the world have told us they want the tools to make their vision of their own family come to fruition. In all our work, we are interested in making sure people have the knowledge and power to make the best choices for themselves.
Melinda: We asked ourselves the same question at first. Hans Rosling, the brilliant and inspiring public health advocate who died last year, was great at answering it. I wrote about the issue at length in our 2014 letter. But it bears repeating, because it is so counterintuitive. When more children live past the age of 5, and when mothers can decide if and when to have children, population sizes don’t go up. They go down. Parents have fewer children when they’re confident those children will survive into adulthood. Big families are in some ways an insurance policy against the tragic likelihood of losing a son or a daughter.
We see this pattern throughout history. All over the world, when death rates among children go down, so do birth rates. It happened in France in the late 1700s. It happened in Germany in the late 1800s. Argentina in the 1910s, Brazil in the 1960s, Bangladesh in the 1980s.
Bill: There’s another benefit to the pattern Melinda describes—first more children survive, then families decide to have fewer children—which is that it can lead to a burst of economic growth that economists call “the demographic dividend.” Here’s how it works.
When more children live, you get one generation that’s relatively big. Then, when families decide to have fewer children, the next generation is much smaller. Eventually, a country ends up with relatively more people in the labor force producing economically—and relatively fewer dependents (very old or very young people). That’s a recipe for rapid economic development, especially if countries take advantage of it by investing in health and education.
Fortunately, the number of child deaths is likely to keep going down. The rate of innovation in child health is extraordinary, and the world is starting to make progress on some of the most stubborn challenges in the field. For example, we now know that malnutrition is a contributing factor in half of all child deaths, but there are still many open questions about what causes malnutrition and how to prevent it. One promising area is the study of the microbiome—all the bacteria in the human gut—and the role it plays in kids’ ability to absorb nutrients. We’re also working with a partner on a device that’s the thickness of a piece of string that can go down infants’ noses and take 360-degree microscopic pictures of the gut. Soon, we’ll be able to see how a child is developing, instead of having to guess.
Melinda: Saving the lives of children is its own justification. It also has the potential to improve life for everyone. But this demographic transition can happen in a reasonable period of time only if all women have access to contraceptives. Right now, more than 200 million don’t. For the sake of those women, their children, and their communities, we must meet their needs—and we must do it now. If we deny access, we are dooming them to a lifetime of poverty. But if we invest in providing access, families will use it to lift themselves out of poverty and build a better future for their children.
Bill: In the past year, I’ve been asked about President Trump and his policies more often than all the other topics in this letter combined.
The administration’s policies affect our foundation’s work in a number of areas. The most concrete example is foreign aid. For decades the United States has been a leader in the fight against disease and poverty abroad. These efforts save lives. They also create U.S. jobs. And they make Americans more secure by making poor countries more stable and stopping disease outbreaks before they become pandemics. The world is not a safer place when more people are sick or hungry.
President Trump proposed severe cuts to foreign aid. To its credit, Congress has moved to put the money back in the budget. It’s better for the United States when it leads, through both hard power and soft power.
More broadly, the America First worldview concerns me. It’s not that the United States shouldn’t look out for its people. The question is how best to do that. My view is that engaging with the world has proven over time to benefit everyone, including Americans, more than withdrawing does. Even if we measured everything the government did only by how much it helped American citizens, global engagement would still be a smart investment.
We have met with President Trump and his team, just as we have met with people in previous administrations. With every administration—Republican and Democrat—we agree on some things and disagree on others. Although we disagree with this administration more than the others we’ve met with, we believe it's still important to work together whenever possible. We keep talking to them because if the U.S. cuts back on its investments abroad, people in other countries will die, and Americans will be worse off.
Melinda: We need to work with the administration to garner as much support as we can for policies that will benefit the most impoverished people in the world. In our U.S. work, one premise we start with is that a college degree or career certificate is critical to a successful future. In short, a college education should be a pathway to prosperity for all Americans. The Trump administration’s leadership, along with Congress’s, will have a lot to do with whether it is.
Specifically, student aid programs need to work better for low-income students. Right now, 2 million students who are eligible for aid don’t even apply for it, because the process is so burdensome. Some go into debt. Even worse, many don’t go to college at all. The government must continue to be generous in funding aid programs while following through on simplifying the application process. The futures of millions of young Americans are on the line.
I would also say that I believe one of the duties of the president of the United States is to role model American values in the world. I wish our president would treat people, and especially women, with more respect when he speaks and tweets. Equality is an important national principle. The sanctity of each individual, regardless of race, religion, sexual orientation, or gender, is part of our country’s spirit. The president has a responsibility to set a good example and empower all Americans through his statements and his policies.
Melinda: We work with companies like GSK and Johnson & Johnson because they can do things no one else can.
Take the example of developing new diagnostics, drugs, and vaccines for diseases of poverty. The basic science that underlies product development happens at research centers and universities. But when the goal is to build upon basic science, translate it into products that save lives, get those products tested and approved, and then manufacture those products, biotechnology and pharmaceutical companies have the vast majority of the necessary expertise. Every partner we work with is required to make products developed with foundation funding widely available at an affordable price.
Ideally, we’d like companies to seek out more opportunities to meet the needs of people in developing countries. If our limited partnerships encourage them to see potential in new markets, we’d consider it a big success.
Bill: We think poor people should benefit from the same kind of innovation in health and agriculture that has improved life in the richest parts of the world. Much of that innovation comes out of the private sector. But companies have to make a return on their investments, which means they have little incentive to work on problems that mainly affect the world’s poorest people. We’re trying to change that—to encourage companies to focus a bit of their expertise on the problems of the poor without asking them to lose money along the way.
The best examples so far are in global health. Some diseases of the poor require new vaccines and drugs, which as Melinda says is an area where biotech companies excel. So, for instance, we’re funding two early-stage companies that are working on ways to use messenger RNA to teach your body how to produce its own vaccines. It could lead to breakthroughs in HIV and malaria—as well as flu and even cancer.
We’re also working with the private sector to make existing drugs and vaccines available to people in poor countries. There is a group of more than a dozen awful diseases, known collectively as neglected tropical diseases, that affect more than 1.5 billion people. Most of these diseases can be treated, but the drugs are too expensive for the poorest countries to buy and deliver to their people. Several years ago, we learned that a few pharmaceutical companies were donating the necessary drugs. We loved the idea and helped bring together a larger group of companies to donate even more. In 2016 they provided treatment for at least one of these diseases to 1 billion people in 130 countries. I’m optimistic that we can eliminate a number of neglected tropical diseases in the next decade, and this work is one reason why.
Sometimes we use more complex financial deals to bring in the private sector. For example, donors can remove some of the risk for companies by guaranteeing them that they will either get a certain price for their product or sell a certain volume of it. We are one of several donors that created a price guarantee to scale up the delivery of a vaccine for pneumococcal disease, an infection that kills nearly half a million children every year. Poor children in 57 countries now get this vaccine, and it could save 1.5 million lives by 2020.
We’re also working with the private sector in other areas, but those efforts aren’t as far along. Agriculture companies like Monsanto are making seeds that could help farmers in poor countries grow more food, earn more money, and (as Melinda mentioned earlier) adapt to climate change. And we’re working with mobile-phone providers like Vodafone so that more poor people can save money, make payments, and borrow through their phone. This work took off initially in Kenya and is now expanding to other countries, including India.
Melinda: No. It’s not fair that we have so much wealth when billions of others have so little. And it’s not fair that our wealth opens doors that are closed to most people. World leaders tend to take our phone calls and seriously consider what we have to say. Cash-strapped school districts are more likely to divert money and talent toward ideas they think we will fund.
But there is nothing secret about our objectives as a foundation. We are committed to being open about what we fund and what the results have been. (It’s not always immediately clear what’s been successful and what hasn’t, but we work hard to assess our impact, course correct, and share lessons.) We do this work, and use whatever influence we have, to help as many people as possible and to advance equity around the world. Although we’ve had some success, I think it would be hard to argue at this point that we made the world focus too much on health, education, or poverty.
Bill: As much as we try to encourage feedback, we know that some of our critics don’t speak up because they don’t want to risk losing money. That means we need to hire well, consult experts, learn constantly, and seek out different viewpoints.
Even though our foundation is the biggest in the world, the money we have is very small compared to what businesses and governments spend. For example, California spends more than our entire endowment just to run its public school system for one year.
So we use our resources in a very specific way: to test out promising innovations, collect and analyze the data, and let businesses and governments scale up and sustain what works. We’re like an incubator in that way. We aim to improve the quality of the ideas that go into public policies and to steer funding toward those ideas that have the most impact.
There’s another issue at the heart of this question. If we think it’s unfair that we have so much wealth, why don’t we give it all to the government? The answer is that we think there’s always going to be a unique role for foundations. They’re able to take a global view to find the greatest needs, take a long-term approach to solving problems, and manage high-risk projects that governments can’t take on and corporations won’t. If a government tries an idea that fails, someone wasn’t doing their job. Whereas if we don’t try some ideas that fail, we’re not doing our jobs.
Melinda: We never disagree. Just kidding.
Bill almost never gets this question. I get it all the time. Sometimes, it’s from journalists hinting that Bill must be the one making the decisions. Other times, it’s from women philanthropists asking advice about how to work more effectively with their husbands.
Bill and I have two things going in our favor.
First, we agree on basic values. For our wedding, Bill’s parents gave us a sculpture of two birds side by side, staring at the horizon, and it’s still in front of our house. I think of it all the time, because fundamentally we’re looking in the same direction.
Second, Bill is very open-minded, which isn’t necessarily how people perceive him. I love Bill because he has a kind heart, listens to other people, and lets himself be moved by what they say. When I tell a story about what I’ve seen, he feels it. He might ask me to gather some data for good measure, but he doesn’t doubt the reality of my experiences or the soundness of my judgment.
Sharing a laugh with the Zhou Mingting family in Hainan, China.
When Bill first came over to the foundation from Microsoft, he was used to being in charge. I’d stayed home with our kids, so I was restarting my career. There were times I felt that disparity—in meetings when I was reticent and he was voluble, or when the person we were meeting with looked toward Bill and not me. It’s always been important to us that we are equal partners in our foundation’s work. We’ve learned over time to give each other feedback at home about times in the office when we didn’t meet that goal.
Gradually, I’ve focused more and more on gender issues, because I’ve seen repeatedly that the more empowered women and girls are, the stronger their communities are. As I’ve thought more deeply about equality for women around the world, I’ve been proud that Bill and I have achieved it in our life together.
This is a balance that married couples, and co-workers, all over the world are always trying to strike. One of the reasons this work has been so fun for me is that we’ve been on this journey together.
Bill: I agree with all of this! Though I have to admit that Melinda is more comfortable with—and better at—talking in public about personal subjects than I am.
As she says, our common values serve us well. We agree on the big issues. Our occasional disagreements these days are over tactics. Because I've been a public figure longer, and because I’m a man, some people assume I am making the big decisions. That's never been the case.
Some people see Melinda as the heart of our foundation, the emotional core. But just as she knows I’m more emotional than people realize, I know she’s more analytical than people realize. When I get really enthusiastic about something, I count on her to make sure I’m being realistic. I also love watching her bring together just the right mix of people to solve a problem. She helps me understand when I can push our teams harder (as I pretty much always did at Microsoft) and when I need to ease off.
We are partners in both senses that people use the word these days: at home and at work.
Bill: It’s not because we think about how we’ll be remembered. We would be delighted if someday diseases like polio and malaria are a distant memory, and the fact that we worked on them is too.
There are two reasons to do something like this. One is that it’s meaningful work. Even before we got married, we talked about how we would eventually spend a lot of time on philanthropy. We think that’s a basic responsibility of anyone with a lot of money. Once you’ve taken care of yourself and your children, the best use of extra wealth is to give it back to society.
The other reason is that we have fun doing it. Both of us love digging into the science behind our work. At Microsoft, I got deep into computer science. At the foundation, it’s computer science plus biology, chemistry, agronomy, and more. I’ll spend hours talking to a crop researcher or an HIV expert, and then I’ll go home, dying to tell Melinda what I’ve learned.
It’s rare to have a job where you get to have both a big impact and a lot of fun. I had it with Microsoft, and I have it with the foundation. I can’t imagine a better way to spend the bulk of my time.
Talking about malaria at the Bagamoyo District Hospital in Tanzania.
Melinda: We both come from families that believed in leaving the world better than you found it. My parents made sure my siblings and I took the social justice teachings of the Catholic Church to heart. Bill’s mom was known, and his dad still is known, for showing up to advocate for a dizzying number of important causes and support more local organizations than you can count.
When we got to know Warren Buffett, we discovered that he was steeped in those same values, even though he grew up in a different place and at a different time. When Warren entrusted us with giving away a large portion of his wealth, we redoubled our efforts to live up to the values we share.
Of course, these values are not unique to the three of us. Millions of people give back by volunteering their time and donating money to help others. We are, however, in the more unusual position of having a lot of money to donate. Our goal is to do what our parents taught us and do our part to make the world better.
Bill and I have been doing this work, more or less full-time, for 18 years. That’s the majority of our marriage. It’s almost the entirety of our children’s lives. By now the foundation’s work has become inseparable from who we are. We do the work because it’s our life.
We’ve tried to pass on values to our children by talking with them about the foundation’s work, and, as they’ve gotten older, taking them with us on trips so they can see it for themselves. We’ve connected to each other through thousands of daily debriefs on learning sessions, site visits, and strategy meetings. Where we go, who we spend our time with, what we read and watch and listen to—these decisions are made through the prism of our work at the foundation (when we’re not watching The Crown).
Maybe 20 years ago, we could have made a different choice about what to do with our wealth. But now it’s impossible to imagine. If we’d decided to live a different life then, we wouldn’t be us now. This is who we chose to be.