My Take on Bill Gates’ Letter

Bill Gates first annual letter, which I previewed on Friday, is out today. It is refreshing in its tone and doesn’t read like an “official annual report” (Gates says that this letter does not replace the Gates Foundation’s normal annual reporting). If you are not familiar with the thinking that drives the Gates Foundation, then this letter is a very good way to get up to speed. I think this is probably the most valuable aspect of the letter. Bates lays out the way that he thinks about philanthropy. Understanding how other philanthropists think is a great way to improve your own approach.

One thing that jumped out to me (although it is not surprising) is that Gates writes about the techniques to achieve social impact (such as reducing infant mortality) but does not address the building of great nonprofit organizations. This is the dominate approach that large foundations take so it is not surprising, but I thought it was notable in light of my recent debate with Paul Brest. Note however, that Gates does mention the nonprofit KIPP, which Paul Brest also pointed to during our discussion. Might funders achieve more by locating and funding great organizations like KIPP rather than spending their resources designing or vetting theories of change (such as lower infant mortality leads to lower birth rates, which increases standard of livings)?

I mentioned in my post on Friday that Warren Buffett’s annual letters (Buffett is Gates’ inspiration for his letter) have been compiled into books because they are viewed as holding so much wisdom. I can’t say that Gates’ first letter inspires me to predict that his letters will be similarly compiled (although it is a good start). But I do appreciate very much the fact that Gates has put his thoughts down on paper in a readable, approachable way. If the CEO’s of the top 20 foundations (Gates isn’t CEO, so maybe just the 20 most important people in philanthropy) all did this each year, I think that would make for a great book.

Definitely take a look at the letter. You can jump to different parts of the letter if you don’t want to read the whole thing. If you only have a minute, read the Introduction and the section on The Role of Foundations.