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January 7 2008: 3:37 AM EST
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Melinda Gates goes public (pg. 3)

By Patricia Sellers, editor at large

Soon after their wedding came the calling to global health. Melinda read a front-page New York Times story about children in developing countries dying of diseases that most Americans have never heard of - rotavirus, which kills more than 500,000 children every year - and others like malaria and tuberculosis that barely exist in the U.S. "I thought, 'This can't be happening,'" Melinda says, and she attached a note to Bill. ("This is how we work," she says. "We constantly put stuff on each other's desks.") Reading the article, Bill learned about the World Bank's 1993 Development Report, which calculated the cost of these diseases. He got the 344-page document and read it several times. "That is not something I will do," notes Melinda. "I learn in a different way. I learn experientially."

Buffett's gift

"Yes, we're a couple that has fun discussing fertilizer while we walk on the beach," says Bill proudly. We are sitting in the chairman's office at Microsoft, and Bill, in an armchair, is rocking forward and back - an old habit that Melinda has not broken. "Melinda is more scientific and reads more than 99% of the people you'll ever meet," he says. When the couple reviews grants (of the 6,000 or so requests that the foundation receives annually, they personally evaluate only those asking for $40 million or more), they typically meet in a study or hash out their views during long walks. They discuss grant requests without notes in front of them because, as Melinda says, "You'd better have it in your head. That's a good discipline."

Former President Bill Clinton, who paid tribute to Melinda at a Save the Children dinner in New York City in September, said that two years ago, when he went to Africa with the Gateses, he and Bill "thought we were so smart. We showed how much we knew about all these issues, you know, and we asked all the right questions. Melinda just sat there patiently. And then when we shut up, she bored in and said, 'What are you doing in education? What are you doing on prevention? How many people are using condoms?'" The two Bills wilted. "Melinda showed that in the end, women are stronger than men when it counts," Clinton said.

As Melinda has handed him AIDS babies with dirty pants, her husband has developed a noticeable compassion. But hers seems natural. Her close friend Charlotte Guyman, a retired Hewlett-Packard and Microsoft executive who is now on Buffett's Berkshire Hathaway board, recalls a trip to Calcutta in 2004. One day, when Melinda had foundation meetings to attend, Guyman and a few in their group spent a half-day at Mother Teresa's Home for the Dying. There, they were captivated by one young woman suffering from AIDS and tuberculosis who was "just bones," Guyman says. No one could break the woman's zombie-like stare. The next day Melinda visited. "Melinda walks in, pauses, and goes right over to this young woman," Guyman recalls. "She pulls up a chair, puts the woman's hand in her hands. The woman won't look at her. Then Melinda says, 'You have AIDS. It's not your fault.' She says it again: 'It's not your fault.' Tears stream down the woman's face, and she looks at Melinda." Guyman can't forget the connection. "Melinda sat with her. It seemed like forever."

Seeing such suffering up close has led the Gateses to direct more money to what they call intervention: those bed nets, condoms, microbicides (clear, odorless gels that women apply vaginally) that help ward off illness and death until the magic bullet, vaccines, arrives. As AIDS among women has exploded in the developing world, Melinda, who goes to church regularly, feels no guilt about funding programs that more conservative Roman Catholics question. "Condoms save lives," she says.

As mighty as the Gates Foundation is, Melinda insists that it needs partners. Relatively speaking, she says, "our pocket of money is quite small. The NIH budget is $29 billion. The state of California spends $60 billion in one year. If we spent that, our entire foundation would be out of business." So the Gates Foundation has allied with other charities - Rockefeller, Michael and Susan Dell, Hewlett - and with companies such as GlaxoSmithKline and Procter & Gamble on various projects. The most successful joint venture is the GAVI Alliance, formerly called the Global Alliance for Vaccines and Immunization, which the Gateses helped start with donations of $1.5 billion. With 17 donor governments and the European Union in the fold, GAVI has distributed vaccines (including tetanus, hepatitis B, and yellow fever) to 138 million children in 70 of the world's poorest countries. Thanks largely to this alliance, immunization rates are at all-time highs in the developing world, and more than two million premature deaths have been prevented.

Closer to home, where just 70% of American ninth-graders graduate on time from high school, reforming education has been a slog. Melinda admits that she and Bill were initially naive. "I thought that if we got enough schools started, people would say, 'Let me build schools just like that.' Just the opposite is true. You could get 1,000 schools up and running, and the system would pull them down." In Denver and even in Seattle, the Gateses' backyard, some of their education efforts have failed for want of community engagement or the right leadership. So now the Gateses are working with 1,800 high schools and aligning with superintendents, mayors, and governors wherever they can. "It's always been one step forward and one step back," Melinda says.

New York City, though, shows what Gates money can do. At 43 new small high schools funded by the Gates Foundation, graduation rates are 73%, compared with 35% for the schools they replaced. The Gateses' partner here happens to be Joel Klein, who led the government's antitrust case against Microsoft a decade ago and now runs New York City's public schools. Klein appreciates the irony of their alliance, calling the progress "a tribute to Bill." For his part, Bill claims that it was no big deal to give his money to his former nemesis. And Melinda won't say a word about the tension that stemmed from that period. "That's part of our relationship that I need to keep private," she says. But clearly she helped her husband get his head around the notion of working with Klein. "This is one of the great things about Bill," she says. "Bill looks forward." Buffett observes, "When Bill gave $50 million to New York City schools with Joel Klein in charge, I thought, 'This guy can rise to the occasion.'"

Now, with another key partnership - the one with Buffett - the Gateses have more to spend and do than ever. Buffett had planned to hold onto his money until his death, but he changed his mind after his wife, Susie, died in 2004. In the spring of 2006, after lots of hinting, he broke the news to Bill. When Bill went home and told Melinda, they went on a long walk, and both cried. Melinda recalls, "We said to each other, 'Oh, my gosh, do you know how responsible we're going to feel giving someone else's money away?'"

Buffett, who requires that the Gateses spend his annual contributions in full the following year, has given them just one piece of advice: "Stay focused." He considers the Gateses "the perfect solution," he says, because they are experts in philanthropy and also because he sees himself in Bill and his late wife in Melinda. "Bill is an awkward guy. He's lopsided, but less lopsided since he's with Melinda," he says. "Susie made me less lopsided too." Perhaps proving the point, Bill is quite touching when he explains his delight in disbursing Buffett's billions. "Warren knows how lucky I am to have Melinda. It makes him look back at his time with Susie and wonder what it would have been like to be doing the giving with Susie."

Bill and Melinda are only now figuring out their new division of duties - crucial in a 500-person outfit that will probably double in size in two years. Bill, no organization geek (that would be Ballmer), intends to spend more time with scientists and academics, explore technology in education, and egg on the pharmaceutical companies that are not working on vaccines for the developing world. "Nobody gives them a hard time," he complains. "That job is natural for me to do." Melinda, meanwhile, intends to focus on personnel and culture. Some critics of the foundation contend that only managers who are close to the Gateses have the clout to get things done. Melinda says she wants to push decision-making further down the organization. Asked whether criticism about the Gates Foundation's bureaucracy is valid, she replies, "You bet, some of it is." Still, she says, "years ago we got compliments about how fast we reviewed grants. Those grants were swift, but they were not all as effective as they could have been. I'd rather be a bit more methodical and effective." She also believes that the foundation must respond better to charges that its assets are invested in companies, including BP and Exxon Mobil, whose business interests can conflict with its altruistic goals. In May, Melinda and Bill directed endowment managers to divest stocks of companies invested in Sudan.

Housing crisis

Melinda and Bill married on Jan. 1, 1994, in a small ceremony on the Hawaiian island of Lanai, with Willie Nelson, one of her favorite singers, performing - a surprise arranged by Bill. Afterward, Melinda says, she had "a mini sort of personal crisis." This crisis was over the house Bill was building on Lake Washington outside Seattle. It was a bachelor's dream and a bride's nightmare: 40,000 square feet with several garages, a trampoline room, an indoor pool, a theater with a popcorn machine, and enough software and high-tech displays to make a newlywed feel as though she were living inside a videogame. "If I do move in," she recalls telling Bill, "it's going to be like I want it to be - our house where we have our family life." After six months of discussions about shuttering the project, Melinda hired a new architect to redesign the place. They worked together to create intimate spaces, an office for her, and staff quarters out of sight and on the periphery.

The couple moved in before construction was finished, which might have been a mistake. "Having a hundred workmen there gave her the message, 'This is what your life is going to be like,'" Bill says. He used to tell Melinda: "Every day I want to hear one thing you like about this house." She recalls: "I'd say, 'Okay, I like the laundry chute.' Or 'Okay, here's what I like and ten things I don't like.'"

The house is, of course, a metaphor for Melinda's desire for normalcy. Her foremost concern is that the kids lead lives as normal as possible. She insisted on booting all hired help on weekends except for the security people and a sitter who arrives late in the day in case she and Bill want to exercise or go to dinner or a movie. Wednesday night is family swimming night. Friday night is family movie night. Bono, who has stayed with the Gateses several times, says, "That home has a stillness to it. It's got a sort of Zen-like quality. Melinda has created that." When they congregate in the light-filled kitchen overlooking the lake, Bono says, "they're fun to hang out with. And they're funny. She plays the straight man to his dark humor."

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