Remarks by Bill Gates, Chairman and Chief Software Architect, Microsoft Corporation
Community Foundation of Silicon Valley
Santa Clara, California
October 1, 2004


GREG AVIS (Founding/Managing Partner, Summit Partners and Member, Board of Directors, Community Foundation of Silicon Valley):
On behalf of the board of directors of Community Foundation of Silicon Valley I want to first of all thank all of you in attendance here today: community activists, leaders in business, medicine, the arts, education and other disciplines. It's you and it's your efforts that are making Silicon Valley a dynamic and caring place in which to live.

I would also like to thank my fellow board member Jeff Skoll for the tremendous gift you have made to Silicon Valley. I have the privilege of co-chairing the effort match Jeff's generous grant, and as Peter mentioned we're over half way to our goal in just a few months and again I encourage all of you to consider contributing to the Community Investment Fund.

This region has been blessed with community leaders who have shown tremendous creativity and entrepreneurial spirit. As we celebrate the Community Foundation's 50th anniversary today, we are privileged to acknowledge this unique spirit with the award that Peter and I are about to present.

This award recognizes that each generation requires visionary philanthropic leadership, that a truly successful entrepreneur not only builds a great company but uses his skills and resources to give to the community and to the world at large, that a truly successful company will encourage its employees to give and to volunteer.

On this anniversary we honor and recognize not only the personal philanthropy of Bill Gates and his remarkable foundation but also the spirit of giving that he has encouraged and nurtured at Microsoft.

PETER HERO (President, Community Foundation of Silicon Valley): Great. Thanks, Greg. (Applause.)

Greg and I are sort of the tag team here. While most recognize Bill Gates for his global business acumen, it's his passion for philanthropy that has touched lives throughout the world. The Bill and Melinda Gates Foundation has awarded more than $4 billion -- that's billion with a "b" -- since it was created in 2000. (Applause.)

The Gates Foundation efforts in education, its libraries initiatives and its efforts to eradicate disease in our world's poorest nations are innovative and bold. And we were just talking at the table, Jeff Skoll and Bill Gates, about that issue of disease and the insidious and difficult problems that they present in our poorest nations.

Bill Gates' passion for philanthropy also extends to Microsoft and its employees. Last year alone Microsoft contributed more than $79 million in cash and $367 million in software to nearly 5,000 schools and nonprofit organizations. (Applause.)

Microsoft's Unlimited Potential grants, as they're called, support programs here in Silicon Valley and around the globe, providing technological skills for under-served young people and adults through community-based technology and learning centers. The Community Foundation is honored to be a partner with Microsoft to administer this Unlimited Potential grants program.

I first met Bill Gates in 1999 when he stopped in San Francisco and met with a group of us responding to a call from one of our board members, actually Steve Kirsch, who you saw in our video. Steve had sent out an e-mail urging high-tech CEOs to join him in each giving $1 million to help resolve the unexpected $11 million shortfall at our United Way in Silicon Valley. Bill Gates and the Gates Foundation responded with a $5 million gift, more than any of our local donors. This visit gave me a preview of the generosity of both Microsoft and the Gates Foundation and for this we want to recognize and honor Bill Gates today.

So, Bill, on behalf of the board of directors, the advisory council, the entire Community Foundation of Silicon Valley, I'm honored to present you with our 50th anniversary Spirit of Philanthropy Award. (Applause.)

Thank you, Bill. Thank you for coming.

BILL GATES: Well, good afternoon. It's fantastic to be here and I'm very honored to receive this award. It's certainly an award that goes to the many Microsoft employees who have been very generous in their giving and have made our matching program a great success, and then the people who have joined the foundation that Melinda and I created and really helped turn that into a strong organization, reaching out, not only giving but also partnering with others and raising the visibility of some issues we think are very important.

I thought I'd share with you this afternoon a little bit of the history of my involvement with philanthropy and some of the lessons about how I think more philanthropy at the corporate level and the personal level is both something that we should strive for and something that is needed.

I grew up in a family that was very involved in the community. My mother and father both had a chance to head the local United Way campaign, and I remember my mom coming and talking about some of the tough decisions that she faced when she ran the allocation committee, looking at the different charities, trying to understand what the needs in the community were, who was spending the money wisely, what needs would not be met and it was amazing to me the range of people, you could say entrepreneurial people who had created nonprofits to meet those needs and how they were using very limited resources to do neat things.

My parents got me involved in volunteering early on, so I had a sense, hey, United Way was a really great thing.

Then I got a bit distracted, I went off to Harvard, didn't even finish my work there because I got distracted again and started Microsoft. And Microsoft had a few years down in Albuquerque, New Mexico, but then I moved it back in 1975 to be in Seattle where I'd grown up.

At the time, we had about 30 employees and I remember my mom saying to me, "Hey, it's about time you did a United Way campaign. This is really important." And I said, "Mom, that was nice, it was fun when I was growing up, but I'm really busy now and this is really serious stuff we're doing, and we work day and night and I don't really want to bother these hardworking people." Well, she had me meet with some community leaders and think about it some more until I came up with the right answer. (Laughter.)

And so at a fairly early stage I decided, OK, this could be something fairly exciting, something where the employees of Microsoft, who were very lucky in their work or their backgrounds, could get some visibility of the needs in the community. They could meet some of the agencies, they could think through the fact that it made sense for them to share some of their good fortune with these agencies and that either giving directly or giving through United Way would be a great way to do that.

And it was a particular challenge because many of our employees came from outside the community and so they didn't have a direct experience of the particular organizations there. A large number came from outside the United States, and the tradition of philanthropy is not as strong outside the United States as it is here. One can hope that this is one of the things that, as the world is adopting capitalism and democracy and many other things that we've helped refine, that philanthropy as an institution will come along with that, but for these people coming in the idea that, "Hey, I pay taxes, don't I, they're supposed to take that money and do all those things," it just wasn't common sense that philanthropy plays this unique role of finding unmet needs and funding pilot activities, taking on things that are too risky or too controversial for government and therefore is a critical part of the way things get done that communities work here in the United States.

It was interesting, we had some employees who had been in companies where they went for 100-percent participation and they talked about how that was done, and we said, OK, we won't do that, we'll go for 70 percent participation, try and get people but make sure it's something that they're excited about. And we over the years would always come up with interesting things. They often involved an executive making a challenge that if some participation level or certain number of dollars would be raised, that executive would do something fairly humiliating -- (laughter) -- crawl around the entire campus pushing a peanut. Or wear a dress all day long. Or swim across a frozen piece of water that existed on our campus property.

And we also engaged a lot of competitive spirit where we'd say Division A and Division B will be measured and compared and the winners will get the pride of victory, and the other ones will have to go in and cook meals and clean offices or something that you wouldn't want to do, and really engage people.

And the campaign became something that people would step out of their normal project, get to work with people in other parts of the company, think in a broader realm, think about raising money and start to think about the particular thing we created, software, where we could donate that, in addition to the dollars we were giving, and have the right kind of impact.

We put it into the framework of a matching program where whatever people give [to nonprofits] we match that, and so they can think of it as having double the impact that just their giving on their own would have.

And so it has been a fantastic success. It's a tradition that even as the company has grown, we've been able to extend it out to all our different groups. In fact, here in Silicon Valley we have about 1,200 people and of that 1,087 give to our payroll deduction campaign an average of $800 per person. So we feel super about that. (Applause.)

It's also a great example of the Community Foundation helping us because we take some of the corporate funds and funds we raise and get advice from the Community Foundation of what kind of things are available here, what should we be doing to have the highest impact.

In fact, earlier today I had a chance to meet with some of the people who take those dollars and do fantastic things with them. Just a few examples to give you a sense that this has real impact:

There's a group called TransAccess that takes people with disabilities, and they have trainers there that teach those people how to use computers, teach them skills where they can go out and get a job, teach them how to use it as an educational tool to learn on their own and huge impact, 4,000 disabled people coming through there and having their lives changed because of that opportunity.

There's a number of things that have to do with technology access, the San Jose Grail group has an Eastside Technology Access Program that lets kids come in, lets families come in where they can use computers, stay in touch with relatives, including examples of people, a woman whose son is out in Iraq for the United States now, her being able to stay in touch with him in a very simple way.

There are things we do through the Catholic giving services, Catholic Charities, that have to do with teaching people computer skills to go get a job and many great stories there.

We have people who want to volunteer, and the Community Foundation has helped us find those opportunities, get people more connected with what is actually going on.

And so at least on the corporate front I really give my mom credit for drawing me into that and making it something that's been fantastic for the company and the communities we're part of.

Well, then my mom started to work on me on personal philanthropy and just corporate is not good enough. And I thought about it and I came to a decision, actually, at a fairly young age, in my 30s, that it wouldn't make sense for whatever wealth I was lucky enough to have to go to my children. They hadn't been born to make their case at the time. (Laughter, applause.) So it will be interesting to see what they say about it. (Laughter.) But that was my decision.

But I also decided that I would do my giving when I was in my 60s, that is after I'd retired from Microsoft, and so that I'd have a period of my life where I was in the profitable sector, often very profitable sector, and then I'd have a phase where I was giving away. And I thought that would avoid schizophrenia where, you know, what are you supposed to do, make money or give it away, can you in the same day go to a meeting about making money and a meeting about giving it away. So I thought, no, I don't want to do that. (Laughter.)

And it wasn't until about, oh, 12 years ago now that I started to learn about some causes that I thought were urgent enough that really I began to question this notion that would I wait, because after all if you can solve a problem today and the compound effect of solving that problem today is very dramatic, then that's just in an economic thinking point of view way smarter than waiting to give those dollars later.

So there were a few causes that I got acquainted with that really drew me in, the idea of having access to a personal computer, it's such a neat thing that as a young person to have that tool, to have all the information on the Internet, who wasn't getting that access and what sort of disadvantage was that creating for them in their educational careers. So the idea of putting personal computers into every library in the country, connecting it up to the Internet, having great support, having the right software to make it easy for people to do that, that was a project that I decided to take on. I did that with Microsoft giving all the solution, with my early foundation giving the money, and that was a wonderful project where the librarians jumped on that, it really raised the visibility of the library.

And so with that success it got me thinking, boy, I can actually do this, I can do my job and put some thought into giving at the same time.

I also started to learn about some of the challenges in the U.S. education system and see that we aren't renewing our excellence there, which is, of course, the wellspring of the strong position that this country is in and started thinking about what could be done there.

And then I also got some exposure to the conditions in the world at large, the so-called developing world, which is the world that most people live in, and the kind of diseases that are there that we take for granted that those are gone.

And so my dad started working on me and eventually convinced me, OK, I'll do some philanthropy at a young age. And particularly the kind of impact we could have by renewing the excellence of education and by solving some of these big health problems, those seemed like things that really couldn't wait.

And I have to say, just like the United Way and corporate payroll deduction giving that's worked out so well, this has also been something that has exceeded my expectations. It's really fun for me to meet with smart people at the foundation and talk about world health issues and how we're going to get the brightest brains on those things and how we're going to get the visibility of the great progress and what needs to be done there.

And, in fact, the parallels in terms of smart people, hardworking people, the parallels between my work and my nonprofit are very, very strong, there really isn't that much difference, the dedication, the excitement, the idealism, it's very, very strong there, and so those are great people and it's fun to be able to back them.

There are a few examples here that are fun to talk about. One is the idea of these high-performance high schools, sometimes associated with taking specialized approaches or smaller high schools. In this area we've been able to support organizations like ASPIRE or High-Tech High or the New School Ventures, and these groups are creating model high schools that do great education.

The need to improve that I can't emphasize enough because as we look at a globe where the competition for jobs is coming from every country, and we won't be able to stop that by closing the borders or saying that people who provide jobs in those other countries are doing a bad thing; it's actually a good thing. We should want India to be as rich as we are, we should want China to be as rich as we are, but in terms of our position, our excellence, it means we have to raise it to the next level. And the thing that will really make the difference there I think is education.

In the area of health there's a very innovative organization here in this area called One World Health and we've given them through the foundation about $100 million to go after some serious disease problems, going after malaria that a million people a year die of malaria. When I first gave $50 million to [fight] malaria I was stunned to find that I was doubling the private giving for that disease, so it's one of these paradoxes where 10 percent of the money on health issues goes to the 90-percent problem, which is mainly problems in developing countries, and 90 percent of the money goes on 10 percent of the problems, which are things that the market mechanism works for -- cancer, heart disease, things that we experience in the rich world where there is a strong market mechanism.

And so being able to be involved in new medicines for malaria, and diseases that here we just don't hear about it because they're either gone or they were never here, that's something I think we can expect breakthroughs, we can expect great results.

One thing I want to share is my sense of optimism about where the empowerment is going through technological advances and how that will let philanthropic dollars have even more impact in the future. I think sharing best practices, whether it's in education or in health, the tools of technology will allow people to compare and share and train each other in a better way.

I think that we need to get this new generation, these people who have been so successful, drawn into philanthropy, and I do worry about whether that will happen or not because in some cases it's not gone as well as expected. It's great the United Way here is back on its feet doing good work, but it could be doing a lot more. The Computer Foundation is certainly a shining example of what can be done here and the generosity in this community.

I would challenge you all to say that obviously you're here because you believe in philanthropy, but I think we can draw more people in, I think we can have greater generosity.

And philanthropy to me really has two components: giving back to the community that helped you in your success and then giving back to the world at large. And some people choose to focus just on one or the other, some people choose to focus on both, which, of course, I've been lucky enough to, because of the scale that we work allows us to do that; those are both very, very rewarding things.

Philanthropy is something that I think you can think of it in two ways. One is you can just think of it in pure rational thought, that if we can save these lives that's a fantastic thing. I think there's another way to renew commitment and drive commitment to philanthropy though, which is to go down and meet with individuals who have been affected. And so I get to go off to Africa and India at least once a year and take the statistics and map that down to individuals. And likewise going out to see high schools and seeing agencies, meeting with some of the people like I met today, I encourage you to do that. It's uplifting, they love to have people come and ask them questions, see what would be done better there, and so drawing people in is a big part of what this is all about.

So thank you very much for the award, thank you for all of your commitment to philanthropy and let's see what more we can do.

Thank you. (Applause.)

PETER HERO: Thank you, Bill, for those inspiring remarks and for your leadership in philanthropy.

I'd like to thank all of our sponsors again and I'd especially like to thank my friend Jeff Skoll for his tremendous generosity and it's not too late to join in, we welcome all who'd like to.

Thank you for joining us today. Here's to the next 50 years and we'll see you next year. Thank you. (Applause.)