Charlie RoseTonight, a special edition of Charlie Rose.Warren Buffett, the CEO of Berkshire Hathaway and the second richest man in the world, announcedyesterday he is giving much of his $40-plus-billion fortune to the largest and perhaps most admiredfoundation in history, the Bill and Melinda Gates Foundation.In essence, he is using that foundation to pass his money back to society.It means the foundation, which now spends $1.5 billion per year on global health, educationand libraries, will now spend $3 billion per year.Think of the consequences for those who are poor, sick and uneducated.It means Bill and Melinda and Warren can make even more real the guiding principle thatall lives are equal.It means Warren Buffett joins great names in business history and philanthropy, Rockefeller,Ford, Carnegie and Gates, who have given their fortune back to society.Think of the possibilities and you'll understand why this is the most important and historicannouncement ever in philanthropy.I am pleased that Warren, Bill and Melinda are making their only television appearancetoday on this program.Warren is a very good friend and I know and have great respect and affection for Billand Melinda.Bill and I have done many television interviews before.This is Melinda's first appearance and I hope not her last.Finally, Carol Loomis, the great business reporter from Fortune Magazine, she brokethe story yesterday in her cover stories in Fortune Magazine.The story is entitled, Warren Buffett Gives It Away.I am pleased to have Warren, Bill and Melinda at this table.Thank you.This is as much of a win-win as I've seen in a long time.
WarrenYeah, it doesn't get any better than this.
Charlie RoseTell me the significance as you see it of what's happened.
WarrenWell, it's something I've always planned.My wife Susie and I had planned that whatever I made would go back to society and originallyI thought she would outlive me and that she'd make the big decision on it, the manner.But since her death, I had to rethink the best way to get the money into society andhave it used in the most effective way and I had a solution staring me in the face.I'd seen Bill and Melinda do what they have done with their foundation.They've done it with their own money.They've poured themselves into it.The decisions are great.Their goals are similar to mine.So the time is now.Bill has already given you a book to start reading about all these issues.He gave that to me last night.
OtherThere'll probably be a quiz after the show and I thought we'd get to some of those things.
QuestionerHow much do you know about malaria and tuberculosis?
OtherI think he wants me to contract all these diseases just so I can work on them.
QuestionerHow do you two see the significance of this for you, for the causes you serve?
OtherFor us, it's just fantastic because we look at it as doubling the impact. The diseases we've already been working on and the education and inequities we've been looking at for so long just basically double by Warren's gift and it's incredible the depth that we'll be able to go to on some of these global health issues.
QuestionerBill?
OtherWell, it's a huge responsibility. In some ways, if you make mistakes with your own money, you don't feel as bad about it as if it's someone else's. So now we're even more intent on doing it right and it's a very exciting time. The advances in medicine and other things we can do to relieve poverty, we've been making good progress and with the doubling of resources, we think our impact can even more than double. And so it's thrilling but it's a huge responsibility.
QuestionerI mentioned that you two believe in the guiding principle has been all lives are equal. What do you mean by that in terms of how it affects you and how you look at the world?
OtherWell, it's a pretty simple thing and it goes back to something Warren talks about where you can be born anywhere in the world and your opportunities are very different.
QuestionerThis is ovarian lottery.
OtherYes. And it's not really fair that we could save lives for a few hundred dollars in many countries and yet we don't. We don't discover the drugs or even if we have them, we don't get them out there. And it turns out that if you save those lives, that has this incredible effect on reducing population growth surprisingly and then you have more resources to have great nutrition and education and get this virtuous cycle going that the richer countries have experienced and that's an amazing thing that should happen throughout the world.
QuestionerYou mentioned Susie's death made you began to think about it because she was not going to outlive you and run the Buffett Foundation. Tell me about what led up to this. I mean, was this sort of you went to Bill and said, I've decided what I want to do with our series of conversations. How did it unfold?
OtherWell, I began to mull various possibilities and I wanted the money to be used effectively and I've looked at a lot of foundations, Charlie, and they're a number that I admire, but there's
Warrennone that are in the same class in my view as the Bill and Melinda Gates Foundation andnot just because of size.They really have looked at the world without regard to gender, color, religion, geography,and they said, how can we do the most good for the most people and particularly the peoplethat have gotten the short straws in life.So I mentioned that I was thinking about it to Bill many, many months ago, but still was playing around in my mind the best way to do it because I wanted something that would work well for the Berkshire Hathaway shareholders as well as for the beneficiaries of the money.And finally I came up with this plan and when I decide on something, I'm ready to go.
QuestionerSo when you first heard this, what was your response?What did you think?
Bill GatesWhen I first heard it, it's something that's very hard to believe that might actually happen,but immediately turned for us to the responsibility.You know, when you give away your own money, you feel incredibly responsible as you do that.And then we look at and you say, this is the body of Warren's work for his life.You feel, I think, doubly responsible giving away somebody else's money.And then I think immediately we turn from that and say, okay, what can be done for the world?What can be done for good?And it's just an awesome thing to be able to think about the number of people that you could lift out of poverty with a gift like this.
QuestionerWere there any issues that came up, Bill, in terms of the mechanics of this, how you do this?I mean, Warren had decided that he's going to give to five foundations, five, six of it going to Bill and Melinda Gates Foundation.Any logistics here that you had to overcome?
Bill GatesWell, in the last few months, we probably paid some lawyers' bills to make sure we got it structured the right way.But, you know, in the end, even though there's some paperwork and some of that, it's really pretty simple.One other thing that we're thrilled about is Warren's joining us as a trustee.And so there'll be three trustees of the foundation.And that's going to be a great addition for us.But that was not a condition of the gift, Charlie.I'd be totally happy if, well, and the two of them are going to be running it.And we would have been happy to have Warren as a trustee.
CharlieYeah, exactly.That's how it turns out.And the idea, the only condition of this, if something happens to them, if a plane goes down, as you have said, then what?
QuestionerWell, that's a very, very low probability.But if they weren't available to run it, I would want to take a look at what the ongoingsituation would be.
OtherYeah.Take a fresh look.I'm doing the same thing.
QuestionerBut I just that I am doing this because I've seen two extraordinarily talented people applythemselves big time to the major problems of the world.And I would want to I would want to see what was going to be the next act if that happened.But it isn't going to happen.There is also this a selfless act.I mean, didn't you have any great desire to see the Buffett Foundation and the BuffettLibrary and the Buffett this and Buffett that?
OtherNo.I like the Omaha Public Library.
QuestionerWhat will be your role then?I mean, you'll be a trustee.But will you sort of what if I have any ideas that they can use me as a sounding board?
OtherThey can use me any way they want to use me.Are they already doing that?
QuestionerYeah.Well, that's true.And so it really it's not it's not a big deal.But if I you know, anytime I can be helpful, fine.I won't get involved in their investments.That complicates life.So I'm totally out of that game.Are their priorities your priorities?
OtherYeah.Overwhelmingly, they mesh.Yeah.I wouldn't be doing it.And you have the Susan Thompson Foundation looking at other issues and the kids havefoundations which are involved in it.But I've seen I've seen what what they're interested in.I mean, and I've seen the way they pour themselves into it.Bill gave a presentation at the Greenbrier in 2001.It was right after 9-11.And it was one of the best talks I've ever heard.I really wish I'd had it on tape.I encourage lawyers later on.But I mean, it blew us all away.There were 40 or 50 of us there.And and when you when you see a couple of outstanding minds, you know, passionate aboutdoing something that's in sync with what you would like to see done, you know, it's a nobrainer.
QuestionerYou describe the brains as ungodly.The idea of what impact this has, will it change priorities?Will it change?Obviously, the size of the staff?Will it change?Will you be able to do things that you couldn't before?
OtherWell, absolutely.In some ways, we have the challenge of success.That is, every time we get a new drug, then you have a much bigger problem of how do youget it distributed?How do you make sure it has the impact you have in mind?And if you look at the top 20 diseases, there's at least 10 of those we're making very goodprogress and can expect in the next five to 10 years to have solutions.
OtherAnd so scaling up is very important.In education, as you get one high school that's working well, it's a model.You'd like to see that spread throughout the country.And so what we've got here is the opportunity now to really deepen and accelerate.We'll add some things that relate to poverty, but the top goal being going after the healthand poverty issues, and then education is the second.That's not going to change.You have found that, in fact, if you can change health, it will have an impact on how manychildren people have.It will have an impact on a whole range of other things beyond their health.
OtherAbsolutely.And I think what this allows us to do is deepen what we do in health.So where we're already working on medicines for malaria or tuberculosis vaccine or anAIDS vaccine, we can also start to surround those programs.You can't give somebody medicine if they don't have any food in their belly to eat or ifthey don't have clean water.And so looking at some issues around, say, agriculture to help small farmers in Africagive them drought-resistant seeds for sorghum or help them get seeds that if there's a virusin their banana doesn't spread from crop year to year, help them get their products to marketand have more information.Helping them figure out ways that they can have clean water or healthy food to lift theirfamily up while we're also starting to solve some of these diseases, I think, is how we'lldeepen the impact of what we're doing in health.
QuestionerIs there and has there been any kind of dilemma between spending money in terms of the futureas you did with the Grand Challenge and spending money today in terms of the logistics of gettingexisting drugs to people?
OtherAbsolutely.I mean, we have finite resources and there's a very healthy dialogue that goes on wheresome say, hey, you ought to spend more on the immediate solutions and others say, no,you're kind of unique in being willing to fund the research and so you should focusmore on that.And that's great.Having that ongoing dialogue, people who disagree with this, getting advisors to come in onthose issues is very helpful.Take AIDS as an example.Spending money on prevention has this incredible impact because every case you prevent preventsthe cases that might have caused.But then you see the face of the tragedy, the people who are getting ill and you wantto have treatment getting to them as well.And so these problems are big problems that can absorb huge amounts of money and in fact
Otherthat's why we need to work with governments and make sure they get involved and we've been very pleased to see many governments around the world step up and do more in this area of global health.
OtherAnd I think sometimes we also look for is there a model project that we can do to prove something out that then can be taken to scale in other places.
OtherSo we got in early with antiretrovirals in Botswana knowing that we couldn't possibly give antiretrovirals to everybody in Africa that needs them, but if we could prove out that a country could really do it when it wasn't being done.
OtherSo we got into that in 1999 with Merck, we each put in $50 million and the first time Bill and I went to visit Botswana, even in 2003, there were only about 3,000 people even then with our program on antiretrovirals.
OtherBut now we've taken that where you've got 62,000 people in the country on antiretrovirals and it was a model program so then when the government money, the PEPFAR money came in from the U.S. government, that could be expanded in other countries.
OtherSo a lot of times we'll go in in that way.
OtherAnd the research in terms of all these things is an ongoing huge commitment in terms of the payoff coming down the road.
QuestionerYou mentioned the 20 diseases. Give us a sense of what diseases that you think we're around the corner from dramatic differences. Malaria, TB, HIV?
OtherYeah, then there's a series of diarrheal diseases including rotavirus that we have a new vaccine for and two other causes of diarrhea.
OtherSo that's the two biggest killers of kids under five are diarrhea and respiratory disease.
OtherAnd we see that we can get through about five different vaccines, drastically eliminate those deaths.
OtherIt's over 10 million children a year die and those are the top two causes.
OtherAnd so the top five, AIDS, TB, malaria, and those two childhood causes, we're making great progress there.
OtherThe other 15, like visceral leishmaniasis, are less known because they're only in the tropical areas.
QuestionerAnd less pronounceable.
OtherYes.
QuestionerHe's going to be my family doctor, Charlie. I can see why more.
OtherThis guy is. He's got it.
QuestionerYeah, I want him in the operating room. Or you're an expert on tropical diseases too.
QuestionerThe idea of what they are doing, was it important to you to be able to make this philanthropic gift and have it pay off immediately?
OtherWell, you certainly want it to be used intelligently immediately.
OtherThe payoffs don't necessarily come that fast.
OtherAnd frankly, that's why they'll be a lot better at this than I am.
WarrenI like immediate feedback. I'm the kind of guy, if I walk into the ice cream store, I want a triple dipper right there. You don't want to sit down. And really philanthropy, you have to have a longer view of that. You have to take delayed results in many cases. Now, they're going to be impatient to get the best results they can. But it's a different game in that respect. And they're very well suited for it.
QuestionerYou weren't convinced that you'd be good at philanthropy, were you?
WarrenI think I'd be terrible at it.
QuestionerWhy?
WarrenWell, A, I like the fast feedback, but secondly, it probably requires answering to a bigger constituency in a sense than I like doing. I like to look in the mirror and ask myself what I'm doing okay. And there are a lot of people whose opinions I really don't want to listen to. So you have to be a little more diplomatic, perhaps, than I am. And I'm just delighted, Charlie, as I said in that article, I mean, if you've got something important in life to do, let's say I was going to play the golf match in my life, and I could get somebody to substitute for me like Tiger Woods, I would do it. And if I had to sing on television, you know, and I could just mouth the words and get Sinatra in the back room doing it for me, I'd do it. So the idea that you have to, you have various responsibilities in this world, and this money is a responsibility, but if you can get somebody better at doing something that needs to be done in your place, you know, I'm used to that.
QuestionerPeople have been speculating, as you know, for a long time about why you haven't done this before. And you were saying you haven't done it before. Susie's death was one thing.
WarrenYeah, well, but if you go all the way back, Charlie, I mean, Susie and I decided when we were in our 20s that money would go back to society.
QuestionerWhen you told her you were going to get rich, do you think you could assure her?
WarrenI'm sure of it. She thought I was delusional. But as time went along, I managed to convince her, but the, you know, it was always going to society. There wasn't any question about that. Now, my logic, but it also went down the grade of what I wanted to do, but my logic was that philanthropic needs would be huge today, tomorrow, 20 years from now, 100 years from now. And if people were going to devote their money to philanthropy, the ones who were high compounders should take care of the philanthropy 20 or 40 years out.
QuestionerThat would be you.
WarrenYeah, I really thought, you know, it made way more sense than to give a million dollars
Warrenin 30 years ago, which might have been all I would have had available to have it compounded.And people who are low compounders should take care of the current needs.I mean, if I ran a university and I had two wealthy alumni and they were going to supplyall the money, I would take the guy who wasn't going to do much with the money and use hismoney currently and I would have the other fellow compound for me.So anyway, it was a convenient way to think anyway.And you know, that has been my philosophy on it.But now is the time.
QuestionerDo you think people are surprised you did this?
WarrenProbably.
QuestionerYeah.When you made this decision, you had to ask yourself, will there be consequences for thisextraordinary compounding that has been taking place and will it affect Berkshire Hathawaystockholders?
WarrenYeah.And I don't I don't think it will.When I own, as a matter of fact, 31 percent of the money that Berkshire Hathaway makesif we can make another 100 million dollars, 31 percent of it through my shares is goingto philanthropy.If there's any if you could have a greater motivation than I've had over the years, I'mnot sure you could, but I would have it now.I mean, it's a great feeling to know that as the company becomes worth more and moremoney, that it actually translates into something good for people around the world.
QuestionerSo the people put this value on it, you just for the benefit of the audience, the GatesBill and Melinda Gates Foundation, about 30 billion dollars, something thereabouts, right?That stock is committed.And in terms of present market value, it'd be about 30 billion.What you are doing is committing about 37 billion based on the value of shares today.
WarrenToday.37 billion.Right.It'll be given.It'll start.It starts immediately in 2006.It will be given over a period of years.It'll be given indefinitely, in a sense.And to the extent that Berkshire becomes more valuable, which I think it will, it can bea lot bigger than 37 billion over time.And I think it will be.And, you know, the bigger, the better.And it can be going on 20, 30 or 40 years from now.Bill and Melinda will agree on this point.I know of no one who loves his work more than this guy.
QuestionerAbsolutely.He loves to tap dance to work, as he says.
WarrenThat will continue.You'll go back to Omaha and tap dance to work and make these decisions now, knowing thatyou're not only benefiting the Berkshire shareholders, but also people's lives far away.
OtherI knew it would benefit philanthropy eventually.
OtherBut now it's very tangible.
OtherIt's tangible.
OtherIt's very tangible.
OtherAnd every year, I hope those shares that are committed to go that year are worth more money.
OtherAnd over time, you know, I think they will be.
OtherSo this can be a lot bigger.
OtherAnd, you know, it's up to me to work to make it so.
OtherBut you do grow great satisfaction from the fact that you now have made this decisionand you know where it's going.
OtherYeah.
OtherAbsolutely, Charlie.
OtherI mean, it's the second act of the money, you know, basically.
OtherYou amass these claim checks, in effect, which money is on society, and then you figure outthe best use for them.
QuestionerHow is your role going to change at all?
QuestionerBill announced a month ago that you were giving up chief software architect at Microsoft,leaving executive responsibilities, although you remain and will remain as chairman.
QuestionerDoes that mean that your role at the Bill and Linda Gates Foundation will change?
OtherYes.
OtherI'll, in June 2008, I'll switch and become full time at the foundation.
OtherAnd that was actually developing in parallel with Warren's thinking.
OtherBut not connected.
OtherAnd they're unrelated.
OtherThey're actually somewhat synergistic.
OtherThat is, it's thrilling that as I'm going to full time, that the scope of the resourceshave been expanded more than doubled because of what Warren's done.
OtherAnd my role is to help us, help us learn.
OtherMelinda and I both travel quite a bit.
OtherI'll get to go to a lot more schools, a lot more of those trips, read more of these longhealth books.
OtherPatty Stonesifer runs the foundation, has done a fantastic job, and has been thinkingabout this scaling up, how we grow the staff and yet keep the efficiency that we all believein.
OtherAnd so I'll be helping with strategy far more than I've been able to.
QuestionerSo rather than one day a month, you're now going to have him as your assistant, partner.
OtherIt's going to be great.
OtherWe love doing this work together.
OtherWhat ought to be said, and Warren has reminded me of this in every conversation we've everhad, this is named the Bill and Melinda Gates Foundation for a very good reason in termsof her involvement in this from the get-go.
QuestionerWhat do you do, and how is it divided between, and how will this evolve in terms of you twoas trustees and sort of make all the decisions and set the vision along with the people whoexecute them like that?
OtherWell, I think you're using the right word, which is evolve, which is how our roles haveevolved over the last ten years that we've been at this together.
OtherI mean, I think it's hard to predict exactly how much time you're going to spend on something,but Bill's spent more and more time over the years.I've had a bit more time, obviously, because I don't have a full-time career.Our kids are getting to where they're all at sort of school age now.But you know, I think it gives us more time to travel together.I think it really gives you a depth to the work when you can go out to Bangladesh andbe in the slums, go out to India and be there, be with the people in Africa.It gives you a real depth to understand what are the issues they're facing.There's an incredible program already in tuberculosis that's been going on for a longtime where every day for six months, if you're trying to be treated of tuberculosis, theygive you a pill.So I was out in Zambia and saw this going on recently.But you know, you stand back and you ask the question, well, six months, every day, comingand standing in line for two hours to get your pill with no food in your belly, that'snot a successful health program.So sometimes I think you have to actually be on the ground to understand what thosenumbers mean.And we're already looking at how do you cut that time in half and how do you ultimatelyget a vaccine.So I think those are the types of trips and the types of discussion that enrich the flavorof what we do together.And today, when I come back from a trip or when we're on a trip together, we just havea whole other level of discussion about where we want to go and how we want to deepen thework.Many people believe that because of business techniques, demanding results, setting goalsand making sure that they are met, that you guys have introduced something new to philanthropyand as a model.Tell me how you think the Bill and Melinda Gates Foundation is different or how you believeits guiding principles ought to be.Well, I think there is something to be said for being incredibly results oriented andhaving the kind of optimism that if you bring great people together and set very ambitiousgoals, amazing things can happen.I don't think that's totally new.I think you can go back to Rockefeller and say he was willing to go against conventionalwisdom.He was willing to take on very tough problems.Again and again, we find things where the Rockefeller Foundation was doing it right.The philosophy that Carnegie had in the gospel of wealth, Warren handed that out at a get
Othertogether we had and it really helped me think about philanthropy and how you ought to setvery high goals.
QuestionerThis is before you created the foundation?
OtherThat's right.The whole idea of not, that leaving the wealth to your children would actually not be thebest idea for society or for them, that came out of some things that Warren was talkingabout right around the time we met him.I was stunned to think, oh geez, this is a problem I'll have to deal with.Here's some very good advice about that and now here we are.I do think energy and pulling people together the right way, getting partners to work togetherin new ways, it's what's allowed us to move as fast as we have.
QuestionerCharlie, in business I've had a great partnership with my partner Charlie Munger and I've seenwhat happens when you get two people together that are totally in sync but also have differentways of looking at things but are working toward a common goal and you could not havea better pair than Bill and Melinda running a foundation.I wonder, do you think he'll be drawn into this and so his involvement will deepen?
OtherA little bit.I think Warren would be an incredible philanthropist but he loves his job and that's what he'sgoing to do full time.
QuestionerBut you love your job and you have misgivings about leaving Microsoft.No I do.This is a tough one.It's unusual to have two things that you love and that you think are important and challengingand so I've had this debate for several years and I wanted to be very explicit about thechange and I don't even know what it will be like but I'm very excited about it andthis just reinforces the importance of having that time and spending it well.
OtherWe had Warren at a discussion about microfinance about a month ago and it was great talkingwith these bankers and Warren was asking about their costs and did people repay the loansand so we're going to draw him in a little bit and we'll do our best.
QuestionerYou said it famously about children, your own children, who you've done wonderful thingsand created foundations for them and you're very proud of them and they feel the sameway about you.That you wanted to leave them enough money so they could do whatever they wanted to dobut not do nothing.
OtherYeah, that's so they can do anything but not nothing and I don't believe in dynastic wealth.I mean if you contrast, it's nice to leave something to kids and I mean I can understanda person who wants to leave their farm or a small business they built and all of that
Questionerto their children but dynastic wealth, the idea that many generations should be ableto go without doing a thing if they wish simply because they came from the right womb,I mean that really strikes me as flying in the face of really what this country is about.I mean we believe in a meritocracy and equality of opportunity and dynastic wealth flies inthe face of that.So I've really felt that if you have a choice between having a foundation like this doingtremendous things for people all over the world or having a bunch of people, you knowas they say, they came from the lucky sperm club.You mentioned Charlie Munker.You called him up and said I'm thinking about doing this.What was his reaction?
WarrenHe says you finally had a good idea.I've been waiting for that for years.
QuestionerAre you really?
WarrenYeah, a bit more or less, yeah.It took me 40 years to get that out of him but I got it.One good idea.Yeah, one good idea.He's not expecting another one either.But he believed in it and said this is the right thing for you to do.The idea that Warren got you to start thinking about philanthropy, then in 1993 or 94 youread this report, World Development Report.Tell me what that said to you that seems to be linked to everything you have done sincethen.
QuestionerWell, before I read that I thought that the world was really prioritizing how money wasspent so that it would go after these inexpensive ways of saving lives and that there wouldn'tbe a disease that I'd never heard of that was killing over half a million children ayear, rotavirus, and that if there were all the drug companies would be working on it.And so this fact that when people are so poor they can't afford the medicines so nobodyworks to create those medicines and you have diseases that aren't in the rich world soyou don't get the trickle-down benefit that you're solving it for the rich and thereforeeventually it gets to the poor.I hadn't known that.You didn't know this fact and so therefore.Right.I thought that coming into philanthropy all the really important stuff would already beaddressed and so it would just be on the margin what could be done and that you'd have tostruggle to find something really impactful.Once I read that report I said, hey, there is something here, actually a tragedy thatit's not addressed, but in terms of being the key priority that we could put our energiesinto and go after, it just jumped out at me.Charlie, Bill and I sort of have a background mindset of a market system and a market system
Warrenworks awfully well.It's worked well in this country.But a market system has not worked in terms of people, poor people around the world, witha disease that should be available for just peanuts.It doesn't work because people can't afford to participate.The market system just fails in that case and you have to interject yourself into thatand make sure there is a system that will deliver.I'm a big believer in the market system 95% of the time, but it's done pretty well forme.And the world.
QuestionerAbsolutely.
WarrenBut there are things where the market system is not going to solve the problem and that'swhere Bill came in on this.You have said to me in other conversations that when you were thinking about what foundationyou might be involved in, not in terms of choosing one, but in terms of what your moneymight, that you wanted to choose things that had perhaps been neglected.
QuestionerYeah.
WarrenIf the money is pouring into something, and talent, there's really no right or wrong.There's really no reason to duplicate.There's millions of good things to do in the world.You're looking for something that's important.You're looking for something that you'll be reasonably good at in terms of implementingany ideas that do come to mind.And you're looking for something that really needs more funding.And that's exactly the way that Bill and Melinda have come at the problem.You know who Bill and Melinda can certainly speak to this, who would love this, is Susie.The idea of what you have done.She said to me, you know, I'm always wanting him to do more.Right.I was not holding her back, let's put it that way.Or speaking her mind more.No one could have had better instincts about doing it.And she would have liked to have started much sooner and as soon as it could be done ona good scale.And I wouldn't quarrel with that.She saw people one at a time and she saw them with needs now and she was hit by that,obviously.So, I mean, I don't disagree with that.It was perfectly natural for her to react that way.And if I died when I was 60 or something and there had been a lot of money then, I mean,she would have really gone to town with it.And you would have been pleased that she would be running a foundation dedicated to that.
QuestionerAbsolutely.
WarrenAnd she cared a lot about these issues.I mean, she talked enormously about women lifting themselves up in their situation andparticularly having access and tools to family planning was something she was very interested
Otherin and she traveled extensively, especially to Vietnam and a lot of places in Southeast Asia. So, she cared a lot about these inequities. And I keep thinking how pleased she would be if she would have made this decision.
QuestionerYeah. I mean, and reproductive rights and parenthood and all those kinds of issues.
OtherAbsolutely. What are the things that you're not doing, not beyond the things we've talked about, where you know there is an important issue out there or an important cause that you haven't been able to get to simply because you've been too busy with your own priorities right now?
QuestionerYeah. I wouldn't say that it's because we're too busy. It's that we chose at first to focus on the greatest need where we saw these medicines could help or vaccines could help. But one of the things we've known that's also been on the back of our minds for some time is the more you travel around the world and meet these people who need these medicines, they're living in slums. I mean, the greatest amount of population growth is going to come in the cities in these countries. And so, when you go to slums, there's a whole variation of what those look like from one that have absolutely no clean running water, no sanitation, no streets, you know, the houses are made of reeds, to ones that actually are getting somewhat sophisticated where they've built a latrine or they've got trash services or they might have a little bit of a paved road. So, looking at how you could plan for that population growth and getting the governments to start thinking about it so they put some infrastructure in place that when people move into those cities and they are living on less than $2 a day, that there's some place that they can go to actually have basic services.
OtherDo you feel some urgency now because of all, one, you're spending more time, B, you've got more resources, more in your arsenal, as you have said, to do more with respect to governments because you have access to every head of state in the world, I'm sure, to get them more involved because there are things, notwithstanding this addition, that in terms of sustaining impact, you're going to need other people to step up.
QuestionerAbsolutely. And the last few years have been good. The United States, under President Bush, has stepped up with the AIDS money under the PEPFAR program. A number of European governments, led by the UK but with France and others, have stepped up and given more money to vaccines, Norway also doing a great job there.
OtherAnd we need to keep that going.Bono has been a great partner in getting that dialogue going and creating the visibility.In fact, Warren and I called him up and gave him the news of what was going on here.Now, this was last night or a week ago or what?
QuestionerYesterday afternoon.
OtherYesterday afternoon.Right after the story came out.We were trying to create another possible leak.Oh, yeah.He might be singing about it.He'll be singing about it tonight.I'm sure.We hope so.Go ahead.You called him up.So getting governments, the rich world governments, more engaged in these issues in the right wayand then getting the developing world governments to have these priorities and get the infrastructurein place, that will make a big difference in how effective we are.We have to do that.And we're going to get more time to focus on that.Yeah.And treating with more urgency.How much corruption is there in the delivery of health care to the poorest among us inthe most difficult countries?
OtherWell, in fact, some things like building roads or building a dam, things like that, you endup with a lot of layers that lend themselves to diverting the money.With vaccines, it's not it's easier to have transparency.Nobody likes to hoard them because you don't need that many.And you have to refrigerate them and all that being being able to go out and check if ifthey were actually delivered to check the coverage is relatively straightforward.So we have to be vigilant on this.There there's always going to be things like, you know, the Jeeps that got bought and wheredid they end up?But it's a simpler system than most development.And therefore, we ought to be able to make sure that 95 percent of it gets exactly towhere it should go.They're going to be a little bit of leakage.But in fact, if you're not comfortable with that, you shouldn't be wrong.If you don't recognize leakage, you hope in what way this will, in a sense, spur otherwealthy people.Well, it's an interesting thing, Charlie, when when people are thinking about amassingwealth, they frequently go to somebody else that they think knows more about it than theydo and join in.I mean, 50 years ago, 50 years ago last month, I started a partnership and seven people gaveme one hundred and five thousand.Now, why they do it, they thought I would be better at accumulating money for them thanthey could themselves.Good.Bad.Yeah.Yeah.But why?Why not apply that same thinking when you're eventually dispersing wealth?
QuestionerI mean, the idea that your old business cronies or some local pals at the country club oror whomever, or even a professional staff may take over the agenda.The idea that you can't also apply that same theory of getting people that are better thanyou are at doing something in dispersing wealth as well as in amassing wealth, I thinkit's sort of obvious.
So I would hope that people, even the modest means, that don't have something specificthat they really want to do it.And if they have something specific, God bless them.I mean, they have their alma mater or whatever.But but if they really are sort of groping for what to do with far more money, maybethan they ever anticipated that they would have, they can look around.
Doesn't have to be the Gates Foundation at all.But they should look around for somebody that they think will do the job better than theycould do it themselves, that has somewhat similar goals and turn the money over to them.
I think it makes nothing but sense.
One thing that the Gates Foundation does, many people may not know about, is that youcreate partners where people are not willing to take.They can't, A, because in a market system, pharmaceutical companies or perhaps governments,because they can't take the first step.
Right.
Tell me how that works.
OtherWell, I'll give you an example maybe that will highlight this.
There's an organization that we work with called Institute for One World Health.
There's a disease that affects a lot of people and about 200000 people, primarily in certainstates in India and Bangladesh.
And this Institute for One World Health had seen this drug that had been proven that theythought that it worked in one place in Africa.
But the drug was 50 years old.
It had been created in Italy.
There was only one lab in Malta that still was working on it.
And they said, look, if we could really do the final stage trials of this drug and proveout that it could work on this disease, calazar, visceral leaf pneumonia, and really get itout there, we could save a lot of lives.
And so we've worked with them to help them finish the trials.
Now we're helping them push it through the regulatory body in India, which takes a wholeother set of learning and infrastructure to do.
And then ultimately, we'll actually go with the David and Lucille Packard Foundation,having an organization they work with called Janani that actually can distribute drugsout in these particular states, in this place in Bangladesh.
OtherAnd so we'll work through them to get the drug distributed out.So that's an example of how we took something where there really is no market for that atall in the developed world, but in the developing world, it's a horrible parasitic disease thatlots of people die from.And so we're going to help get that out to the people that need it through those differentorganizations.Is there much sharing of information among foundations and at the highest levels of peoplethat are doing research on important subjects?
OtherAbsolutely.Unlike the software business.There's no rivalry, really.We're all going after the same thing.And we don't do any science ourselves.You mentioned pharmaceutical companies.Well, they know how to create drugs and test drugs.And so, for example, GlaxoSmithKline, GSK, has been one of our partners where we're usingtheir expertise, but we provide the financial resources so that they can turn to their shareholdersand say, hey, this is responsible.We're doing rich world drugs, and the resources are here for us to apply ourselves to malaria,which is one of our great partnerships with them.So in a sense, we're just a small piece of the puzzle.It's these partnerships that we create that really do all the work.They provide the kind of manpower and money that you need for the future.Do you have any idea how many lives the work of the Gates Foundation has saved?What do people tell you about the children that are alive today that might not have beenotherwise?
OtherWell, particularly, the easiest place to measure that is in the vaccine work.We got into that work early in 1998, 1999, and we made a large commitment to this globalalliance for vaccine initiative that we actually helped create.And we got other governments to come into it.Which has been the biggest recipient of your funds.Exactly.We gave them $750 million initially, and we went back just this year and announced, orin 2005, announced another $750 million grant over another 10 years.So we've gotten rich governments to come into that fund, and then 75 of these developingworld governments come and apply for the money.But when you look at the vaccines that are out there, we think we know that 1.7 millionlives have been saved just by children getting the basic vaccines that we take for grantedin our country.Diphtheria, tetanus, and pertussis is something every mother in the U.S. goes and gets forher child when they're under the age of one.
OtherThat getting out some of the new vaccines, Hib, yellow fever, those are all things thatwe're getting in the hands of children.
So you can measure it in that way.
And they estimate over the 10-year life of this thing, I think, that we'll save about10 million children's lives via those vaccines.
10 million.
OtherYes.
That says it all, doesn't it?
OtherMakes a difference.
OtherIt does.
Is this part of what drew you away from something you loved to where you will spend the restof your life?
You're 50 years old.
You're 75.
OtherYeah.
I've noticed.
Well, Carolyn, with the first question, she said, are you ill?
Are you doing this because you're ill?
I'm in amazing health.
I mean, considering the fact how I eat, no, I can't believe it.
And burger ice creams and Coca-Cola.
Absolutely.
But it works.
Is the fact that you can save lives something you never imagined when you were in, you know,as you have said, 24-7?
Would you say I was an eye-shade, eyes-down software guy?
Well, doing software is a phenomenally fun thing, and the empowerment it provides, thatI love, and I'll always keep a connection to that.
But as you say, for the rest of my life, starting two years from now, my full-time work is goingto be this foundation.
And it's thrilling because I meet brilliant people, I give them a little bit of optimism,show them maybe a path they might not have seen, you know, go out in the field, see thesetbacks, try and figure out a way around those.
I get to work with Melinda, my dad, Patti Stonecipher, just incredible people.
And so, you know, I'm doubly blessed to have had the work at Microsoft and now this foundationwork.
OtherWhen we described to a friend what Worm was doing, you know, we were saying, wow, thisis an amazing thing that the two of you met and that this could come together.
And they acted like it was, you know, almost obvious that this would happen.
I have to say, to me, it wasn't.
And even when Worm first mentioned it, it was like, wow, is he serious about that?
Wow, are we ready for that?
And you know, it's only hitting me today.
I mean, this is the day Worm's going to actually sign these letters.
But how long ago was that, Bill?
Do you remember?
They first mentioned it to you.
After the last year and a half or so, he mentioned it.
At first, it was, you know, kind of in passing, just a very nice thing that, gosh, your foundation'sdoing well and we'd had that ongoing dialogue.
It was in the last few months that it was clear he was getting very serious with Worm.
OtherOnce he decides something, it's very crisp.
OtherThe other thing I know about you, once you make a decision, you don't look back.You have not lost one moment of sleep because I might be doing the wrong thing.
OtherI might maybe, maybe, maybe, maybe nothing.Nothing.
OtherDo you wish you had done this earlier?
WarrenNo, I really don't.I think this is the right time.This is the right time to do it.
OtherYeah, I do, Charlie.
WarrenYeah.You know, I've had a good chance to see what they've done.I feel Berkshire's positioned better than ever for the future.One thing about it is if I'd given the stock in a lump amount, there might be people whosay that they were too concentrated in one stock and that sort of thing.Well, I want the well-being of their foundation to be sort of concentrated, Berkshire, becauseI think it's going to do very well, so I wouldn't want them to be forced to sell it by governmentbonds or something of the sort.So this way, I don't see how it could be any better.So they're sitting on stock and they may or may not have to cash in the stock.Well, yeah, but they'll tend to cash in the stock as it comes, as will the other foundations.But I've got all these years ahead to make the stock more valuable, which is, you know,I've always wanted to do anyway, obviously, but it'll be even more fun now.
OtherBut I'm coming back to another point.How will this change your life day to day?
WarrenZero.Zero.You go back to Omaha and you tap dance to work and you get on the phone.
OtherBill once said to me, you do three things.You talk on the phone, you read, you play bridge, and then watch an occasional televisionshow.
WarrenWell, I'll tell you what I'll say is that there is the satisfaction to know and to seethat you can, while you're alive, not when you're dead and not among executors, thatyou can do something that you can see because it's already taking place, changing and gettingdone right.Which is really true.
OtherWith accommodation.Now, the idea of what you have done, has it changed your thinking since you began this?In 1994, was it?
OtherYeah, absolutely.Every year and we're going to go on, Laurie.You know, in philanthropy, to make sure you're spending the money right is harder.You don't get a market response quite the same way.And so you're going to do things wrong.And you're dealing with partnerships and incentive systems.And so there's a lot of choices that you have to make.For example, when we started out, we didn't think of having a dialogue with governments
Otherbecause we weren't sure enough about what we were doing to be able to go and say, look,put more money into vaccines, put more money into AIDS.And it was four or five years into it that we started to say, wow, even our resourcesare small enough that we're going to have to have advocacy.And so that's a new capability that we're getting better at and working with partnerslike Bono to have that.We need to keep learning.And I would say even in education, the U.S. education system, realizing, I think we wentinto it a little bit naively at first, thinking if we could get enough of these small schoolsup and running, you'd get enough that the system would see how great they were thatthey would start to really replicate.And as we've learned more, we've realized not only do you have to have, of course, greatintermediaries to replicate those models, but you really have to work with the stateand local government.You've got to work at the district level and you've got to work at the state level if they'regoing to sustain those schools and grow more over time.And that's been a lesson for us.And we'll take lessons like that in every area that we work in.
QuestionerThe 60 percent of the Gates Foundation is directed to global health, as I understandit.And the other 40 is education, especially high school education and libraries.That pretty much will change, not change, in terms of the percentage of what you spendin the future?
OtherThat's right.The global health, which we also now include global development, so the finance and agricultureand slums and sanitation, that's going to be 60-plus percent.And then education, which is very focused on the United States.We said, what's the biggest inequity in the world and what's the biggest issue for thecountry that we were lucky enough to grow up in to maintain its incredible positionand its incredible contributions?And so that will stay as our other big priority and be about a third of the resources.So both will be scaling up with this incredible gift.Global health has gotten more attention, some would say.Is it simply because it's so much more visible?Have the successes there been more tangible than in education?
OtherWell, I think you have to realize that global health is a whole mix of problems.I mean, we're talking about malaria and tuberculosis and HIV and rotavirus.So when we talk about it, it's hard to talk about it as all one thing.And I think Bill and I are both equally passionate about how do you lift up these people from
Otherpoverty, but all the issues related to them.Or equally, we talk a lot about U.S. education, but I don't think it's not there aren't quiteas many things that to go and discuss as there are in global health, where we're constantlypushing in all these different areas.So and I think also as Bill gets more time and we're in the schools more, you'll hearus more, even more talking about the U.S. education system.We are passionate about it.And, you know, I think a lot, you know, we give a lot of scholarships.We've got a thousand kids a year on scholarships through this one of our programs.And those are fantastic stories when you don't go and talk to those kids.Thank you for coming.It's great to have you here on this program to talk about this.And I hope you'll do this again now that I've got kids on the table.I wouldn't miss the point.Bill, it's great to see you.I mean, I think you and I have done more interviews than anybody else.And it's always a pleasure to have you on the program.This is a great day for you.
OtherIt's a great day.It really is.Yeah.And there is a sense of excitement about it because it is about the future and it's aboutchanging lives.And I'm deeply, deeply thankful that you came here because it is such an incrediblestory of spirit.And as you said, the spirit of your late wife, Susie, is part of what's happened here today.
OtherThank you all for joining me.Thank you for joining us, the Bill and Melinda Gates Foundation.As of today, it's a much different foundation with the same goals, but more, as Bill wouldsay, in its arsenal.To make an impact on people's lives around the world, every life that is equal.Thank you for joining us.We'll see you next time.