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Originally published Tuesday, July 1, 2008 at 12:00 AM

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Bill Gates Q&A: The challenges of running the Gates Foundation

Microsoft co-founder and Chairman Bill Gates talked with Seattle Times reporters Benjamin J. Romano and Kristi Heim in the days before he...

Microsoft co-founder and Chairman Bill Gates talked with Seattle Times reporters Benjamin J. Romano and Kristi Heim in the days before he moves full time to the Bill & Melinda Gates Foundation. Here are edited excerpts of his remarks about the foundation.

Q: In what way do you want to influence your foundation by your more active involvement there?

Gates: Well, the basic framework of what the foundation focuses on is not changing at all. We picked global health as our biggest thing, and then global development, and then in U.S. focus on education and scholarships and libraries. ... So I'll just have a lot more time to go to classrooms, go to places where these diseases are, to meet with the research scientists thinking about these diseases, reach out to potential partners, whether it's rich world governments, or pharmaceutical companies, or anybody who cares about these topics.

Q: What parts of Microsoft's culture would you like to bring to the Gates Foundation?

Gates: I don't think culture is something you can describe. ... The foundation has its own culture already, and it's got some of the elements of optimism, and a focus on scientific breakthroughs, and rigorous measurements.

But it's also got a slightly different thing in that going out into poor countries, and people who have spent many years working to deliver things, and the complexity of delivery there — there are just things that are unique about the foundation. So its culture is already great for what it does, and I'm not looking to change that at all.

Q: Earlier in your career, some observers would say that you were not motivated as much by money, but by a strong competitive drive. Do you think there's any place for that competitiveness in philanthropy?

Gates: The vision of Microsoft of a personal computer and empowerment — there was nothing competitive about that because there was no one else doing it. The most important thing Microsoft ever did, saying that software could be magically empowering, that was done when there were no other companies out there.

What motivated us, just probably, was ... innovation and having a tool that Paul Allen and I wanted for our own use that we thought, "Hey, if we could have a machine that could let us create documents, and explore models, and learn new things, we'd love to have that. ... "

The foundation is similar in that it's a lot of frontiers. The malaria vaccine — I wish somebody else was competing to do that, but it's an unfunded area because there are no market forces that drive people to do it. The idea of breakthroughs that can really change things, and getting the best scientists together, and knowing that there will be failures, and being constant with the same focus on the things ... some of those things are somewhat comparable to the kind of things that have made Microsoft so successful.

Q: Where do you draw the line between Microsoft products and the foundation's work to prevent conflicts of interest?

Gates: I wish Microsoft products could cure malaria, but Microsoft makes software, and the foundation is about helping the poor. It's true sometimes technology can be helpful, but they're just completely different organizations. Their charters are different.

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The foundation happens to use some Microsoft software to send e-mail and things like that. And there's some optimism about the role that things like cellphones can play in terms of health. Microsoft is a pretty impressive company in terms of the amount of time they spend thinking about the poorest 2 billion.

For Microsoft, all that attention is not because there's some big economic opportunity there, it's because the company is interested in extending empowerment to everybody.

Q: I was reading that you personally pay for the Microsoft products used in the foundation offices to avoid using the foundation's money.

Gates: Well, yes. In fact, I pay for the investment stuff. The money came from either myself or Warren Buffett that's in the foundation. I actually pay for lots of things just directly, just to simplify things. The foundation needs software to get its job done.

Q: I wonder if there's any way that the Gates Foundation could unintentionally end up doing more harm than good, focusing resources on one problem, which ends up neglecting or worsening another problem.

Gates: I'm not sure what you mean by that.

Q: I'll give you an example. Researchers gravitate toward topics they can find funding for. And health budgets are pretty limited in the developing world. If the Gates Foundation rallies around solving a certain problem, it may divert resources from a different problem, and unintentionally make that problem worse, while solving the problem that you've chosen to focus on.

Gates: Well, our money is all new money. And remember, 95 percent — actually, 98 percent — of all medical research is done for rich people. It's done for baldness, erectile dysfunction, cosmetic surgery. That's where 98 percent of the researchers are working. ...

So the voices of the poor are never heard in this marketplace system. That is, the needs of the poorest, they don't speak in that prioritization, because they're not paying for medicines. They can't.

So today's prioritization is totally for the richest, for the things that they speak by buying those various medicines for. And so as we take our money, which in total is, compared to the overall market, fairly small, and cause some shift in the favor of malaria, AIDS, tuberculosis, to the degree there's a finite number of scientists in the world, then you could say, OK, there's a little bit less on baldness.

Because our money is incremental, ideally you'd be growing the pool of scientists, because you have more money, more jobs, more opportunity there. But it is true that the needs of the very richest might get a tiny bit less attention as we cure tuberculosis.

Q: Is there any risk that the health systems in some of those poor countries would be diverted to malaria at the expense of some other things they have to deal with, such as mother-child care?

Gates: Well, if you take malaria, in Africa the main problem you have is malaria, with kids coming in with fever, and they're dying. They have a sleep-room area, they're sweating, they can't keep their food down. It is totally what's going on in that hospital ... and it's a very grim situation.

Now, if you actually had a malaria vaccine, they get a shot at the same time. They get it when they're very young, so it's just another shot in that thing. Then all those kids who were in that hospital being treated for malaria, they're not there.

So the mother who is coming in, who is pregnant, she actually gets a facility, gets people who care for her. The impact to that health-care system, to being able to do better, of reducing the malaria burden, it's a miracle. I mean, it's an unbelievable thing. So there's nothing more important than the vaccine.

The vaccine doesn't burden these health systems. Vaccines are incredible things, and that's why today you don't even think about, is there going to be some huge measles outbreak in the United States? Because you know there's a level of vaccination that covers that.

Measles at its peak killed 5 million people a year. It's down to about 400,000 a year. That's what vaccines do.

Q: What are you doing to prepare yourself in the couple of months ahead? What's on your reading list, and are you taking some fact-finding trips?

Gates: I've done a lot of foundation trips over the years, and I'm in China this summer doing some foundation stuff. I'm in India in the fall doing foundation stuff. I'm in Africa next January doing foundation stuff.

So I've got a good schedule of those kind of hands-on things.

I do a lot of foundation reading, both to understand the science and the possibilities there, and the specifics — what was going on with the foundation. ...

Q: How can the foundation do work in China?

Gates: Well, the foundation has done a number of things in China, grants for a hepatitis B vaccination, because the disease burden in China, particularly in their poorer regions, is one of the highest in the world. So we helped out with that.

We're doing some AIDS-related things in China. Also, when you think of China, they have capabilities that now that they've improved their economy a lot, they can be a factor to help poorer countries. And so our agricultural people have spent a lot of time in China because China has agricultural expertise that could help raise crop yields significantly in Africa. We're looking at some exchange programs there that would draw on the good work, and the expertise that's in China, and help get Africa up to that same type of level.

China is kind of interesting, because it's in some ways, it's not large, it's a recipient, but in a lot of ways it's a participant in the things that need to get done.

Q: Is China accepting of the role of outside nonprofit organizations coming in and trying to work on the significant problems? How have you been able to deal with the leadership when you approach that country?

Gates: Well, we worked with the health ministry on a lot of things. On some, like the AIDS thing, they were very welcoming, and it's good collaboration.

It will be interesting to see on tobacco how much they cooperate on that. The U.S. was at a much, much higher level of wealth before it did anything about tobacco, so China has a chance to act well before the equivalent time that the U.S. did. It will vary by topic how much you get government cooperation on those things.

Some things, like delivering vaccines, you've got to get the government to help. And in China they do quite a good job of that. Vietnam [has] actually a higher vaccine-coverage rate than the United States. There are parts of Africa where the vaccine-coverage rates are quite low.

Q: And how does the Gates Foundation, as you said, work to bring some of what's going on in China in terms of seed development and agriculture into Africa?

Gates: Well, for example, the two leading places for rice research are one international group down in the Philippines and a group in China. And so figuring out what would it take for them to think about the particular needs of Africa in terms of the varieties grown there, and how we get these traits, say drought resistance, into those, in some cases they've just cooperated with us without us funding any activity. In some cases, we fund them to pay particular attention to the problems in the case of that crop out of Africa.

Q: How do you avoid the perception that you could be taking Microsoft technology to aid the company, rather than acting in the interest of that country, regardless of what technology they want to use? Is there any potential misperception?

Gates: We don't do the software. The foundation does the hardware piece of those things. Software companies all get a chance to donate whatever software they want. If Microsoft does the software, that's purely Microsoft. The foundation is not paying a dime. We're not doing that piece.

The most important thing we do actually is the training of the librarians, figuring out what kinds of things the constituents are going to come in to ask about. And the more software that gets donated for those machines the better.

Remember, technology for the foundation — it means things like vaccines, that's what isn't happening. The nice thing about software is Microsoft can afford to give either free or very low-priced software to these countries, because the marginal cost of production is very low.

In the case of medicines, you have two problems, one is that because the diseases are unique to the poor countries, or the burden is just uniquely high there, the right medicine doesn't get invented. Even if it does, the marginal cost of production is much higher. ... So the foundation is operating in a tougher space, where just the free donation isn't often there. There are cases like where Merck gave Mectizan for deworming that the marginal cost was low enough they could afford to give it away. They had actually invented the drug, ironically, for worms, dog worms, and for dogs of rich people. In ... Africa it was effective for the kinds of worms that infect humans.

Q: Your father has been involved in the foundation since the beginning. I'm wondering what you would say is the biggest lesson he's taught you about philanthropy.

Gates: Well, he's played many, many roles, been very hands-on with a huge number of things in the foundation. He's really set a tone of humility, and thinking about justice. He's been a great voice in the foundation. He's done up until now way more than I have, and so he deserves a lot of credit for what's been done. He's been the co-chair, and worked closely with [foundation CEO] Patty [Stonesifer] on how they pulled the organization together.

There's a lot of grants that he's super involved with, but there's a ton of those in the foundation. We had our annual meeting in May, and my dad spoke and talked about how he thinks about the foundation. Then he did a panel where he got to ask questions to myself and Melinda and Warren Buffett.

So he struck a great tone at the foundation. People are always coming up to me and saying, I heard your dad's speech, and it's really great. And they'll mention some place I didn't even know my dad was going to.

Copyright © 2008 The Seattle Times Company

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