By Philip Rucker
Washington Post Staff Writer
Thursday, December 4, 2008; A17
The world's richest technology entrepreneur -- and leading philanthropist -- came to Washington yesterday with a simple message for President-elect Barack Obama: Increase spending.
Against the backdrop of a recession, Microsoft founder Bill Gates said the federal government must increase deficit spending to stimulate the economy and help the country's most vulnerable residents. Gates said new investments are critical to building on recent improvements in U.S. public education and fighting disease abroad, which he said could be reversed if spending dries up.
Gates, who has used his fortune to build the world's largest foundation, redefining the meaning of mega-philanthropist, said his foundation will increase the amount of its grants next year, despite declines in its $35 billion endowment caused by the sagging economy. He called on Obama to follow through on his campaign commitment to double U.S. foreign assistance to $50 billion by the end of his first term.
"In a crisis, there is always a risk that you take your eyes off the future and you sacrifice long-term investments for short-term gains," Gates said in a speech at George Washington University. "You have to seek both. . . . We should have a bigger goal than getting the economy growing again. I think we should expand the number of people who are contributing to the economy and benefiting from it."
Gates described the financial crisis as an opportunity for innovation, likening it to the economic woes of the 1970s, which gave rise to America's information technology boom, during which Microsoft was born. "Difficult times can launch great ideas," he said.
Later, in a broad interview with The Washington Post, Gates also lamented the state of the District's struggling public schools, which have received hundreds of millions of dollars from his foundation, but had high praise for efforts by Chancellor Michelle A. Rhee.
Gates's foundation funds charter schools, scholarships and other programs for the city's poorest students.
"It's a very hard job, and whether it's the facilities or the personnel issues, somebody had to come in and really point out that the students are not getting what they deserve," he said of Rhee. "The irony [is] that it's almost the highest spending per pupil in the country, and it's almost the worst set of outcomes of students in the country -- and this is the nation's capital. You'd think that in terms of effective spending of dollars and outcomes, that D.C. would be a model city, and, in fact, it has been the exact opposite."
As much as the Gates Foundation invests in U.S. education -- its grants last year totaled more than $400 million -- the investments pale in comparison with government spending. The foundation's entire endowment, for instance, would not be enough to fund public schools in California for a single year.
Gates also uses his star power to draw attention to what he considers priorities. Just one week after last month's election, Gates summoned some education policy heavyweights -- Education Secretary Margaret Spellings, New York schools chief Joel I. Klein, Rhee and leaders of Obama's transition team -- to Seattle, where he unveiled his foundation's new approach to education, which includes new investments in community colleges.
Gates stepped down this summer from Microsoft, the technology company he grew into a behemoth, to work full time on the Bill and Melinda Gates Foundation, whose endowment receives more than a billion dollars each year from investor Warren Buffett's fortune. At 53, Gates is pioneering a new approach to philanthropy, applying the risk-taking and results-based philosophy of an entrepreneur to solving some of the world's most chronic problems.
In the interview, Gates likened his role at the foundation to running Microsoft. "How do you find the smartest people, and how do you create teams around them where they've got the right set of skills? How do you take on things where you're going to have failures and learn from those failures, be willing to do things that are risky, some of which will end up being a complete dead end, and have a set of outcomes: lives saved."
The foundation is akin to a start-up. "It's like a large company with a big vision and a determination to grow rapidly," said Duke University professor Joel L. Fleishman, who studies philanthropy. "But in this case, it's not growing to make money. It's growing to figure out how to give away money in an orderly and effective fashion."
Philanthropic leaders have looked upon the foundation's rise with awe. "It's the largest in the world by a factor of two, and that's astonishing," said Harvey P. Dale, a nonprofit law professor at New York University. But, he said, some leaders "are jealous of it, some feel threatened by it, including some of the foundations who were hugely dominant and now, by comparison, are relatively modest."
But many other philanthropists try to emulate Gates. "When you're as large as Gates, the market moves when you move," said Larry Brilliant, a health expert who directs Google's giving.
"Great public health accomplishments on a global scale require prescience. They require resources. They require scientific and managerial excellence, and maybe most importantly, they require leadership and public will," Brilliant said. "This is something only Gates can do."
It is too soon to determine whether Gates's work will have a lasting impact, experts said.
"The jury is definitely still out," said Fleishman, who has written a history of foundations. "They're going about things in the right way, but it is still too early to say that they have had an unqualified success. . . . The problems are just so big."
Asked what his legacy may be in 15 years, Gates said he hopes it would be as a catalyst for "dramatic improvement in global health. . . . I expect that we would have played a role in a dramatic reduction in disease in many of the top areas: malaria, tuberculosis, AIDS, childhood diseases."
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