Microsoft general counsel Brad Smith and Bill Gates during a United Way event Tuesday night. (GeekWire photo)

For many years, technology executives would crowd into conference halls to listen to Bill Gates, hoping to glean some insight that might help them in their own businesses. The scene was much the same Tuesday night on the Microsoft campus, but the subject was philanthropy instead.

A relaxed and candid Gates spoke at length about the intersection of technology and philanthropy — talking about best strategies for corporate giving campaigns, sharing his experiences from Microsoft and the Bill & Melinda Gates Foundation, and even acknowledging the irony of the fact that he spends much of his time these days working in cooperation with governments.

The event was organized by the United Way of King County, in an attempt to spur the region’s technology leaders to start or ramp up giving campaigns at their own companies. The conversation was led by Brad Smith, the Microsoft general counsel and co-chair of this year’s United Way campaign.

[Follow-up: Bill Gates: What technology (and baseball) can teach schools]

Continue reading for excerpts from Gates’ comments, and see video highlights below.

How philanthropy improves companies: It’s smart to get involved. You have many constituencies you work with. You have your employees, and you want them to feel like you’re a company that is making a difference. You want to create a community of your employees that draws in not just the employee, but ideally the spouses, the partners of your employees. And have something that’s more enduring than just whatever your competitive battles are. You’ve got a customer group that’s looking to you … are you a part of the community? In some cases you’ll have a political environment that’s looking at you, deciding how to think about the company. Those things often make it very smart to be involved in these things. … Most of the leading companies that I know have creative ways that they take philanthropy, and drawing their employees in, and it strengthens the company.

The role of “metrics and outcomes” in giving programs: For all the foundation stuff I’m doing now, we are very hard-core about measurement, because when you know you have some things that are incredibly effective on a global level, for example, if you buy additional vaccines, you’re basically saving a life for about $1,000 per life. And you’re avoiding sickness, and you’re reducing population growth. So it’s a pretty phenomenal thing. So whenever I review another program, and I see that they’re being a little bit sloppy about how they’re spending money, I think, OK, they’re being sloppy about $1 million. They just killed 1,000 children, because I could have taken the money and put it over in that other program. It sort of focuses your mind on trying not to waste too many million dollars.

How that compares to the business world: The private sector does have that one great thing. If you’re sloppy about your metrics, you go bankrupt, and the resources that you’re tying up get freed up for someone else to take advantage of in a better way. That clarity is partly why somebody like Warren Buffett prefers to stay in the for-profit world, where the rules are very clear, and delegate the giving to Melinda and I, which is nice, it’s fun for us, because we’ve gotten to enjoy it. But he’s just decided that it’s kinda soft enough that he wouldn’t know whether he’s doing something. His view is, OK, the easy problems have been solved. The hard problems are the ones that remain. Whereas in business, his view is that, because various companies and stocks get mispriced from time to time, he’s handed pretty easy decisions to make. You’re not going to run into too many of those in philanthropy, but there are some. There are some social services locally, some things like vaccines that just cry out. But the metrics can be used.

On the untapped opportunities in philanthropy: I knew in my 30s that I had to figure out where the money would go. I didn’t have kids and I wasn’t married, but the general philosophy of giving it to (his own) kids just didn’t seem to be appropriate. I started reading books about foundations, and I thought, maybe I’ll just fund scientific research. I didn’t know much about Africa, or disease, and certainly didn’t know much about public education. But I started down that path. … I was afraid when I got into philanthropy that all the good ideas would be taken. It would be good if they were all taken. Somebody should have funded a malaria vaccine. Did they just save it for me to come along so that I could have fun being the primary funder of malaria vaccines? It doesn’t make sense that they were holding that open for me to show up.

On the similarities between his work in technology and philanthropy: It’s very similar, there’s some great innovators, you have to have patience about things, a numerical way of looking at it. I am involved in working with governments more, which sounds a little strange, since part of my Microsoft career involved a certain kind of relationship with governments. (Laughter) You might ask, why would you move to something that has even more of that? It is challenging with all these budget cuts going on. … Even just taking the foreign aid piece, defending that is hard, even though those dollars are very effective. But in a way you could say it just makes it a more complex game, that you have to understand those things. Governments aren’t that analytical … so the partnership between what the foundation is good at and what the government is good at is often extremely complementary.

How companies should get started: I always believe that when people first get involved in philanthropy, doing something that’s related to social services, something that’s local — almost certainly something that’s an agency that will have a strong relationship with the United Way … that’s really a great place to start, because you can actually see it. You’ve got to get a sense for why there is this need, and what can volunteers help out with.

Where companies should focus: Every company has something that they’re good at, and so when you think of your portfolio of how you’re improving the world, besides your products, besides whatever financial donations you’re involved in, it’s ideal if you can pick something that’s related to the skills of the company. So for a drug company, it’s obvious — invent medicines for the poorest, make sure that whatever you invent is available at very low prices for the poorest. For somebody like Microsoft it’s pretty clear — getting software out to schools that’s very inexpensive, helping non-profits, taking the understanding of digital tools and bringing those to organizations and doing things well. Most companies, if they think about their skill set — not necessarily their particular products, although that’s even better if it works that way — they can say, let’s get our people out there, spreading the word, building relationships, and making sure that these things get used. If you’re smart about it, you’re not taking your product into places you would have made a lot of money otherwise, but you’re increasing the utility.

Comments

  • http://www.facebook.com/profile.php?id=781655270 David Bowman

    But what if money in itself doesnt need to exist ? We have abundant resources, all we need is a Global Resource Management System and no one will ever go hungry again…

    http://www.youtube.com/watch?v=4Z9WVZddH9w

  • Mikeman

    No one asked what he is doing for Japan?

    • Anonymous

      That’s funny you should ask. I was struck by the lack of discussion about Japan during the on-stage conversation with Gates, as well, so I actually approached him afterward and asked him about it. Here’s how that went …

      Me: The situation in Japan — has that at all changed your outlook or taught you any lessons over the past few days, changed your perspective on philanthropy?

      Gates, after a long pause: Meaning what?

      Me: Anything thing you learned over the past few days — just curious about your outlook.

      Gates, laughing: That I could give money to present tsunamis?

      Me: Not at all. The lessons for the tech companies here today, and that perspective. Just hoping to find out your general outlook on the situation in Japan from a philanthropic perspective.

      Gates: Well, I’m not an expert. I’m certainly learning everything I can about both the tsunami and the nuclear piece of it. It’s too early to say. Microsoft is involved over there, making sure their employees are OK, giving money.

      ————

      In other words, not a very fruitful discussion. When I’ve interviewed Gates in the past, I’ve agonized over precisely how to phrase the questions, and this is why.

      • http://humanosphere.kplu.org Tom Paulson

        Hi Todd,

        As someone who covers Bill the Philanthropist I would say the Gates Foundation is generally just not that interested in donating to immediate disaster relief. They prefer to fund projects that are more longer-term and preventive in orientation, as opposed to reactive.

        As a side note, there are lots of folks who think Japan really doesn’t need charity. As awful as this tragedy is, Japan can take care of itself. See this perspective from an (anonymous) aid worker:

        http://humanosphere.kplu.org/2011/03/guest-post-the-ugly-game-of-relief-for-japan/

        • Anonymous

          Good insights. Thanks, Tom. I wonder why he couldn’t just say that?

          • http://humanosphere.kplu.org Tom Paulson

            Maybe it wasn’t in his talking points.

          • Bob

            Because Bill still has poorly developed social skills and in his mind the question was a non sequitor, which to some extent it was. But of course he could have just given you Tom’s answer, which is accurate.

          • http://www.alannashaikh.com/products/index.html Alanna

            It wouldn’t surprise me to find out that Gates has been giving 50-100K to several different relief agencies in response to Japan – it seems to me they often do that, just to be responsive.

          • Bob

            It wouldn’t surprise me either. I don’t think anyone is questioning his generosity or concern for the people of Japan during this crisis. It’s just a comment on his interpersonal skills which have always been somewhat lacking (as in famously so).

  • James from Pirq.com

    It was cool to talk with Bill Gates about how to encourage startups and young entrepreneurs to give back to community. I gave him feedback that smaller startups are so busy just trying to raise cash, build product, etc…that it’s not in the forefront of most entrepreneurs’ minds. I gave him feedback that larger companies like Microsoft need to partner with startups in a giving campaign. Startups want to do biz with Microsoft….well, here’s a great way for the CEO’s of smaller startups to network with the decision makers of Microsoft through a giving/volunteering campaign. Microsoft has done a great job in building a partner network for their business….they have the opportunity to do the same for getting a network of startups to a giving/volunteering campaign…..which will inevitably lead back to more business. I will say that he got my attention, and I am now exploring a way to give back a % of every transaction back to community.

    • Anonymous

      Good stuff, thanks James. Saw you there, sorry I didn’t get a chance to say hi.

      • http://twitter.com/james3sun James Sun

        Congrats on the launch of geekwire. Let’s talk soon. I’d like to share some info with you guys about Pirq soon.

    • http://www.puzzazz.com Roy Leban

      There are simpler and better things you can do than donating company money, especially at the beginning when not only do you need every dollar but it’s inappropriate to donate money that essentially came from your investors.

      You can do United Way payroll deduction from the start. Every employee has the option of giving, pre-tax, to United Way and/or non-profits of their choice. The cost to administer the program is absolutely minimal — an hour or two of your bookkeeper each month. Once you’re profitable, you can consider adding company matching.

      You can also do the Day of Caring and other community volunteer events. This not only helps the community but can help build camaraderie on your team.

      • http://twitter.com/james3sun James Sun

        Roy, I agree 100% that United Way payroll deduction and Day of Caring are great ways to get employees involved. Where I was challenged was in regards to Bill Gates’ comment about “creative capitalism”…..how we can use the resources of our creative business models and products to give back. I think a great example is Tom’s shoes. It’s actually quite simple. He gives a pair when you buy a pair. Very successful campaign and business. I agree that you shouldn’t give away investor dollars by any means…that would be silly. Loved your comments about how volunteering builds teamwork….truly works!

        • http://www.puzzazz.com Roy Leban

          Agreed. What you can do depends on what your business is. Microsoft donates huge amounts of software but not much hardware. We’d be happy to donate puzzles, but it’s not quite the same as software or shoes.

          But … for almost 10 years, I have donated custom puzzles for charity auctions (orgs ranging from Fred Hutch to my kids’ PTSA). This year, Puzzazz is doing the donating — a custom puzzle for Seattle Shakespeare Company’s annual auction.

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