The Bill and Melinda Gates Foundation is all about going big and bold and tackling the world’s hardest problems. Its guiding principle is that “All lives have equal value.” Its aims are to get more young children to survive and thrive, to empower the world’s poorest people, to combat infectious disease and to inspire people to take action. Nothing bashful here!
The foundation’s chief executive Sue Desmond-Hellman gave a talk last week at the University of California San Francisco where she made clear that it’s pretty great to have a job that’s about improving the human condition.
She also said it’s great to have three bosses like Bill Gates, Melinda Gates and Warren Buffett (who donated the bulk of his wealth to the foundation and serves as a trustee). Buffett, she said, always arrives armed with questions and on the look-out for what he calls the “ABC’s” – that is, Arrogance, Bureaucracy and Complacency – which often can creep into successful organizations.
While few of us will ever have the chance to throw around the kinds of ideas – or money – that the Gates Foundation does, there still are lessons from it for the everyday investor, philanthropist and human.
One is that if you want to have impact, you have to be willing to take risks and be patient. Early on, Warren Buffett told Bill and Melinda Gates, “Don’t just go for safe projects . . . Take on the really tough problems.” And Desmond-Hellman urged the audience to think the same way. If you’re in a position to take on a high-risk project as a philanthropist, she said, do it – and then be patient!
Desmond-Hellman told us that over a decade ago, the Gates Foundation funded experimental work to infect dengue-carrying mosquitoes with a type of bacteria called wolbachia because wolbachia prevents mosquitoes from being able to transmit the disease. If you could succeed at infecting mosquitoes with wolbachia, you could release them into the wild to mate with local mosquitoes until all of them carried the bacteria and disease transmission would stop within several mosquito generations.
It was technically difficult work and took a very long time to get it right. But today several communities are trying it out. And the bonus is that it doesn’t work just for dengue, but also for Zika – which wasn’t a big issue when the project started but is now.
Another interesting lesson is how risk capital can be used in smart ways to exert serious social impact. When the Gates Foundation learned that 225 million women around the world wanted contraceptives but couldn’t access them, it approached Merck and Bayer – two leading makers of contraceptive implants – to enter poorer nations. Neither company, however, wanted to take on the risk. Both doubted there would be sufficient demand.
In response, the Gates Foundation, along with donors from several nations, stepped up with $400 million in risk capital to guarantee there would be no profit shortfall. In the end, Merck and Bayer found that demand for the contraceptives far exceeded expectations. They never needed to draw on the guaranteed capital. They learned how to operate in new markets. And it’s estimated that by 2018, the program will have saved $500 million for the public health donors that buy these products for those most in need.
All of this is powerful stuff. But perhaps nothing is more powerful than the overarching theme of remembering to be generous and be optimistic. Desmond-Hellman urged us not to starve the nonprofits we support and still expect them to produce results. While donors often get suspicious of large overhead, she said, nonprofits need overhead to operate. More important, cultivating a generous spirit is a gift to yourself. Start to give your money away while you’re alive, Desmond-Hellman said, and you’ll find that being generous is a source of joy.