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Our 2018 Annual Letter
February 13, 2018
By Bill Gates and Melinda Gates
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, sexual harassment, or natural disaster.
Despite the headlines, we see a world that’s getting better.
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.
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.
Why don’t you give more in the United States?
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.
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.
Bill: We’ve been looking at how we might expand our work in the US beyond education. We fund the US 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.
We will share more about our approach when we have settled on a strategy.
What do you have to show for the billions you’ve spent on US education?
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. We have also worked with districts across the country to help them improve the quality of teaching.
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.
Why don’t you give money to fight climate change?
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.
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. 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.
Are you imposing your values on other cultures?
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?
Melinda: We’re acutely aware that some development programmes 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 try to approach our work with humility about what we don’t know and the determination to learn from our mistakes.
Does saving kids’ lives lead to overpopulation?
Melinda: Hans Rosling, the brilliant and inspiring public health advocate who died last year, was great at answering this question. 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. 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—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 labour force producing economically—and relatively fewer dependents. 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.
Melinda: Saving the lives of children is its own justification. 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.
How are Donald Trump’s policies affecting your foundation’s work?
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 several 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 US 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.
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.
We have met with President Trump and his team, just as we have met with people in previous administrations. With every administration, we agree on some things and disagree on others. Although we disagree with this administration more than the others, we believe it's still important to work together whenever possible. We keep talking to them because if the US 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 US 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.
Why do you work with corporations?
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. The basic science that underlies product development happens at research centres 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.
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. 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.
Is it fair that you have so much influence?
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. We do this work, and use whatever influence we have, to help as many people as possible and to advance equity around the world. 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.
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.
What happens when the two of you disagree?
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 favour.
First, we agree on basic values.
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.
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.
Gradually, I’ve focused more on gender issues, because I’ve seen repeatedly that the more empowered women and girls are, the stronger their communities are. I’ve been proud that Bill and I have achieved equality in our life 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.
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.
Why are you really giving your money away—what’s in it for you?
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. 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 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.
Melinda: We both come from families that believed in leaving the world better than you found it. 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 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.
Bill and I have been doing this work for 18 years. We do the work because it’s our life.
This letter has been edited for brevity. Read the full letter here.
