"Slow Down and Listen": Lessons from Gates Foundation CEO Patty Stonesifer

By Mario Morino | November 22, 2006

On October 17, 2006, the board of Venture Philanthropy Partners was privileged to host Patty Stonesifer, CEO of the Bill & Melinda Gates Foundation, in a special event for VPP founding investors, new supporters, friends, board members, and team. Patty, joined by her colleague Allan Golston, President, US Program, candidly shared what she has learned as the foundation has stepped up its efforts to reduce inequities in the United States and around the world.

In an informal back-and-forth conversation, Patty and I discussed what's surprised her most in her transition from the private sector, what concerns her most, her advice for other philanthropists, and her take on the critical need for partnerships. A lively Q&A with those at the event allowed us to delve deeper into issues of assessment, partnership, political will and the role of government, and new models of philanthropy. The afternoon was truly a rare opportunity to hear first-hand the experiences of one of the leaders in the field.

We have summarized the key take-aways from the afternoon:

"Slow Down and Listen:" Changing Sectors from High Tech to Philanthropy
"There are no silver bullets," said Patty. One of the biggest surprises in her transition from the private sector has been the need to slow down, listen, and learn from the past. When she began working for the Gates Foundation, it took time for Patty to change her perspective. "You're always looking forward," when working in technology, but she found that in social change work, it was critical to look into the historical roots of the deep challenges the foundation seeks to address. You need to study efforts that have gone on before to avoid reinventing the wheel.

Lessons for Grantmaking
1. First, find a trusted partner so you have room to learn and someone who will be critical of your thinking.

2. Second, pick an issue close to your heart. You'll be with it for a long time.

3. Third, pick an issue where you can see results. They have to feed your energies.

"These are not easy issues and they need passion to sustain the effort," Patty said.

The Gates Foundation: Building a Leading Philanthropic Institution
The foundation has a huge potential, because of its size and work, to shine a spotlight on issues and raise awareness. For example, arguably the biggest contribution they have made to improving the US education system so far has been getting others to really see that our high schools are broken. "We use our spotlight wisely and sparingly, especially about US issues. In local communities, we feel the local clout should really be with local stakeholders, and we are pleased to be in those communities with partners," said Patty.

At the same time, the Gates Foundation "should be the hand behind government" to help it be successful. To put their size in perspective, it's important to note that public funding is still the key support behind social systems nationally and internationally. For example the foundation's health spending is roughly three percent of the NIH budget. Government "can't back off or back down."

Some of their biggest challenges as they grow:

- Avoiding confusion or overly-high expectations of grant seekers: "Be as specific as possible at what you'll fund and why" so people who don't get money "won't be upset, turned off, and disappointed."
- Building a foundation that won't get deaf to needs and complaints of grantees. "We need to build our antennae…Thank goodness for the Internet."
- Finding the balance in their grantmaking between a narrow, deep focus and program sprawl.
- Maintaining organizational culture as they scale.

As a learning organization, they have systematized the way they collect feedback on their impact and are spending seven to twelve percent of their budget on understanding what they are learning. In addition to a monitoring component imbedded in programs, they have also created a centralized team inside the organization to focus on impact assessment. "It will take three to five years to know if we made the right hypothesis, and we're taking a lot of risk," Patty shared.

On Partnership
To date, 85% of the Gates funding has been through partnerships, and Patty stressed that partnerships would be an even greater part of their strategy moving forward, driven by both the new size of the endowment and giving requirements from the Buffett gift and the magnitude of the global problems they are addressing. She is determined to work with all major players - government, markets, media. She summed up their position by quoting an African proverb: "If you want to go fast, go alone. If you want to go far, go together."

An Ecosystem for Social Change - The Big Picture
To address complex and entrenched issues like the AIDS epidemic, all the pieces need to work together: research and innovation, government, funders, nonprofits and NGOs, and in some cases, the market.

One of the Gates Foundation's biggest lessons as an institution has been the "shock" that government and advocacy are such huge parts of effective philanthropy. "We had no idea that to improve school systems, we would be holding hands with markets and governments and media, and that we had a responsibility to work through those kinds of partnerships."

Patty worries about a huge "innovation pile-up." We have the capacity to invent marvelous new vaccines but she fears "they won't be able to be distributed where they're needed because of political will and the cost [of distribution]." Even now, although the measles vaccine costs pennies, one million children die every year from measles infections. "I believe, and the Gates family believes, that what will happen in the next three to four decades will be remarkable with the rapid pace of science and technology," she said. And she feels that it is an opportunity that can't be missed.

She is also concerned about "field capacity." Scaling up will be difficult, but she expects the real difficulties in doing Gates' philanthropy will lie in the field.

"Don't talk about 'philanthropy.' Philanthropy is just one of a suite of tools," she suggested. With experiments like google.org and the Omidyar Network, new players are demonstrating "financial ethics" to create social change where the benefit doesn't have to come solely from charitable giving. Markets also play a huge role, as Grameen Bank and others in microenterprise have found. "We're happy if a market develops to meet the needs of the poor. That's the most sustainable solution."