Evaluating the Gates Foundation: a Response From the CEO

In The Chronicle‘s March 8 issue, Pablo Eisenberg, a regular columnist for the newspaper, wrote an article, “Gates: Role Model in Need of Remodeling,” evaluating the performance of the Bill & Melinda Gates Foundation in the months since Warren Buffett announced that he would give the bulk of his fortune to the Seattle philanthropy. Instead of writing a letter to the editor in response, Patty Stonesifer, the foundation’s chief executive, asked for the opportunity to answer questions posed by the column. Following are the questions The Chronicle posed to her, based on Mr. Eisenberg’s article, and the answers she sent in an e-mail message:

Mr. Eisenberg has offered criteria for judging a major foundation. What would you emphasize in judging the performance of your foundation and other big grant makers?

We weren’t surprised by Mr. Eisenberg’s holding us to high expectations — in fact, two simple values lie at the core of this foundation’s work:

• All lives have equal value.
• To whom much is given, much is expected.

We appreciate that the “much is expected” bar is high for us given how “much” this foundation has been given.

Bill, Melinda, and Warren benefited from great schools, great health care, and a vibrant economic system, and they feel a tremendous responsibility to give back, and to use their wealth to reduce some of the world’s worst inequities. While they understand that Mr. Eisenberg and others care deeply about “how” we give it back (our governance, our processes), at the end of the day what matters most to all of us is: Are we fulfilling our mission to reduce inequity with these charitable funds? What impact did our efforts have? What is better now because of the foundation’s giving? How many people have better, healthier lives? How many more kids got a great education and went on to make their own contributions to the world? How much more attention is the world paying to these issues?

This is how all of us should be measured: Stack up our achievements against our goals and our priorities. Yes, we should also have great processes and great governance; the guidelines nearly completed by the Panel on the Nonprofit Sector are helping us to make sure our practices and processes are well considered. But recognize that the most important measure of success for this foundation should be the impact we have against the areas of inequity we’re focused on.

Mr. Eisenberg says it is hard to get a clear view of the foundation’s programs. Do you have plans to make more information available?

We agree that it’s more difficult to find information about us and our work than it should be. We’ve grown our program work really fast and our communications efforts have to grow to keep up.

Last year, more than two million unique visitors visited our site. We’re working on a Web-site redesign to share more information and make that information easier to find. But already today on our site you can find overview information about each of our programs, specific information about each grant, audited financial statements, copies of our tax returns, a listing of all investments, and a variety of reports that summarize what we and our grantees are learning.

I recently read three new reports on our Web site that I found very interesting: an evaluation on an important partner in our global-health work, the Center for Global Development (this evaluation was done in partnership with three other foundations); an evaluation on our partnership efforts in transitional housing that was conducted by the University of Washington; and an evaluation by WestEd of the first four years of the efforts in New York City to replace low-performing high schools with smaller schools. We also hope people will learn from our mistakes by reading the case studies we started publishing last year; eight are on our site today.

The bottom line is that we recognize our shared responsibility to make progress in this work, and the more we can help each other — by sharing what we’re learning, good and bad — the faster the work can proceed.

Mr. Eisenberg says that the board of the foundation, made up of Bill and Melinda Gates plus Warren Buffett, is too small to adequately ensure that a diversity of views influence decision making. The foundation says it actively solicits outside views, but Mr. Eisenberg says that doesn’t matter unless outsiders have a vote on the board.

Bill, Melinda, and Warren have donated billions of dollars toward our work and nobody is more passionate or engaged in making sure we spend that money wisely than the three of them. (A look at my inbox on any given day will convince you of that.)

These three trustees also believe that the structure we have in place is what makes sense for this institution, given their interest in ensuring that we use these first years to focus our work. They also know that in order to have the biggest possible impact over the longer term, we need to continually challenge ourselves to make sure we’re hearing from diverse voices — inside and outside. That will take many shapes. More than half the people on our global-development team — now 46 people strong — have lived in the developing world.

In our Grand Challenges in Global Health program, the scientists and public-health experts come from 33 countries. We’re also instituting advisory panels in each program area to get top-level engagement on our strategies and grant making. We recognize very deeply that we have a responsibility to ensure that the work benefits from the input of a wide range of stakeholders; we’ll continue to find more and better ways to make that happen.

Mr. Eisenberg says the foundation won’t make big social changes unless it puts more money into financing community-organizing groups.

We absolutely share Mr. Eisenberg’s view toward using our voice and our influence to achieve even bigger impact for the people we’re trying to serve; it’s one of our top areas of focus.

I should admit this wasn’t always the case. When we first got started, we thought that the work alone (whether that was ensuring that public libraries offered access to the Internet or funding research for a new vaccine) was what mattered and others who had been active in these areas for decades would lead the way with advocacy.

However, now that our priorities are clear and we understand the issues more deeply, we devote more than 10 percent of our funding to advocacy. We do this because we know that even with all of our resources, we will only ever be a drop in the bucket compared to what’s needed — in terms of both political will and financial resources — to achieve much-needed progress against the huge challenges we’re all working on.

It’s essential that other people and organizations, especially governments, get involved in addressing inequity. We consider it a huge win that 17 donor governments plus the European Union are now supporting the Global Alliance for Vaccines Initiative, for which we were the first funder.

Advocacy was crucial to that effort. The World Health Organization estimates that 2.3 million lives will be saved because of vaccinations already given through GAVI — and millions more will be saved in the future.

In our education work, we’re very focused on encouraging policy makers, educators, parents, students, and the broader public to become engaged — and we make grants to groups large and small to achieve this engagement in our focused areas. The great results we’re starting to see in New York high schools are the result of many people — from Mayor Bloomberg and Joel Klein [the city’s schools chancellor] leading within the administration to the Urban Youth Collaborative, which focuses on organizing youth to Acorn, which is a parent-engagement effort and many others — all working together to improve New York schools for all kids.

We also believe in working directly with companies on ways they can apply their expertise and resources to help make a difference for people in need. Through a partnership with Merck and the government of Botswana, for example, 85 percent of the people in Botswana in need of HIV treatment are now receiving lifesaving antiretroviral drugs.

None of the three entities could have done it without the others. But we recognize that we have a shared responsibility to create a world where every person — no matter where they were born — has the opportunity to live a healthy, productive life, and that’s what we’re going to keep driving toward.

Mr. Eisenberg criticizes the foundation for not investing in generic drug companies, which he says can make drugs available for lower prices than major pharmaceutical companies. Could you explain your strategy in promoting the spread of vaccines and other medicines in the developing world?

We absolutely agree that affordability and access are critical issues, and we’re working on a variety of fronts to make lifesaving drugs available to the people who need them most.

We’re going to do this through a variety of ways, including supporting research into how to make drugs, diagnostics, and vaccines cheaper, simpler, and easier to produce; partnering with business where it makes sense; supporting financing mechanisms that will encourage companies and governments to build a sustainable pipeline for drugs that benefit poor people; and by improving distribution systems and technologies. I often think people are unaware of some of the great work that’s already going on in this area.

How many people know that Merck donates the drug that is used to combat river blindness? A debilitating disease that left hundreds of thousands of people helpless is now controllable because of the combined efforts of governments, business, and dedicated health experts at the Carter Center (one of our partners) who have created and led the way with a program that takes the donated drug and ensures it reaches those who need it most.

Mr. Eisenberg expressed concern that the foundation is not using the addition of Warren Buffett’s pledge to expand the grant-making priorities of the foundation. In particular, he suggests that some of the money should be used to expand health programs in the United States.

In our global-health work, we’re going to deepen and accelerate the work that’s already under way. In global development, we’re already ramping up rapidly on two new programs launched in 2006, Agricultural Development, and Financial Services for the Poor.

In the United States, we’re working to carefully explore opportunities where we might complement our work in ensuring that all kids graduate from high school ready for college, work, and citizenship. Any time we extend our work we try to stay very mindful of Bill, Melinda, and Warren’s direction that we stay focused on issues that complement our strengths and learning and that address sources of deep inequity.

The Los Angeles Times recently examined the investments of the Gates Foundation’s endowment and raised questions about whether they match the mission of the foundation — or could be seen as undermining it. You told the newspaper you didn’t think it was possible for a single investor to influence corporate policy, a point Mr. Eisenberg said was unrealistic given the size of the foundation’s assets.

I wish we’d more clearly articulated our investment philosophy from the beginning. To that end, we’ve posted a statement on our Web site. We believe that there are many different ways people and organizations can influence business.

We also believe that we can have the most impact by working directly with businesses to encourage them to apply their expertise and resources in ways that will help the world’s most vulnerable people. Bill has often said that we’ll publicly encourage good behavior, and we’ll work quietly behind the scenes to discourage bad behavior — because we believe that for us, this is the most effective way to deliver results to the people who need them most.

Working with Merck to ensure that the people of Botswana in need of HIV treatment are getting antiretrovirals, working with Glaxo Smith Kline to move a promising malaria vaccine through clinical trials, or partnering with consumer-product companies like Procter & Gamble through the Global Alliance for Improved Nutrition initiative to fortify staple foods to prevent crippling nutrient deficiencies — this is how this foundation is going to change the most lives.

Mr. Eisenberg urged the foundation to think more about making small grants — saying those sometimes make more of a difference than big grants.

We absolutely agree. Small can be beautiful.

We have many small grants that have been effective — we granted to thousands of library systems in the past five years. The Burley Public Library in Burley, Idaho, is one example.

This small, rural agricultural community, where more than 18 percent of the population lives in poverty, used a $13,500 grant to make Internet access available to everyone who needs it. The Burley Public Library is now the place to go within the community for computer and Internet access and is an important resource for information on e-government and employment opportunities.

But Mr. Eisenberg is missing one critical aspect of the way we work — we are usually give our “big” grants to intermediary organizations working in a focused area and regranting in much smaller increments to organizations and issues they know very well. The great majority of our grant making is going into partnerships — many of which create shared strategies and then redistribute the funds to achieve the strategies.

For example, the product-development partnership organization Medicines for Malaria Venture is an entity to which we have committed $165-million. They use our grant to channel funds to dozens of researchers and organizations doing important work in developing faster and more-effective malaria drugs. Similarly, the Seattle Foundation uses our annual $1-million gift to stretch their community grant making to dozens of small community-based organizations that focus on issues here in our home region that might never reach the attention of our in-house team.

Likewise, the KnowledgeWorks Foundation, in Ohio, which has received more than $40-million in education grants, partners across Ohio with educators and organizations with a shared commitment to all kids. Thanks to their partnerships, more than 50 small high schools have been created from large, comprehensive high schools and much more is being done to improve education.

We rely on these partnerships and dozens of others to stay close to the problem and close to people who can deliver the solutions. Our partners’ focus and devotion are what have made it possible for us to grow our giving so rapidly and improve the opportunity for those in need.

At the same time, by using a partnership strategy we hope we’re building important and quality capacity to address these issues in more places and with far more people than will ever reside here at our offices in Seattle.

Small may indeed be beautiful, as Mr. Eisenberg says, but we also believe deeply in the African proverb often quoted here in Seattle: “If you want to go fast, go alone. If you want to go far, go together.”

We owe a lot to present and future partners; it’s through their efforts that our giving will go far.