The Giving Pledge: Bill Gates's Annual Letter

Though Bill Gates is best known for creating the software behemoth that is Microsoft, lately he has made a much greater impact in the philanthropic arena. Gates worked his last full day at Microsoft in 2008 after working there since he founded the company in 1976. Even before his official departure, he gradually transitioned his efforts toward the Bill and Melinda Gates Foundation--an organization that he created in order to effectively give away his prodigious fortune. Every year since he transitioned to working for his foundation, he has written an annual letter detailing the state of affairs at the organization. Last month he published the third of these letters. He writes about three notable initiatives that I'll discuss--foreign aid, education, and the Giving Pledge.

Microsoft in 1978 (Bill Gates bottom left)

The first half of Gates' letter is a plea to the rich countries of the world to maintain or even increase the resources they devote to foreign aid, even in a time of economic hardship. He states that less than 1% of developed nations' budgets goes to foreign aid, and yet that slice of the budget is on the chopping block in a time when austerity is in vogue. He especially focuses on the financial viability of the erradication of polio, a disease that only lingers in 4 countries.

Gates makes a strong case for the use of vaccinations in preventing childhood mortality. First, he argues that childhood mortality is counterintuitively a cause of overpopulation. Reduction in childhood deaths is linked to smaller family sizes, and the change takes effect within a generation. Reducing overpopulation in turn ameliorates problems such as hunger and insufficient resources for education. Second, vaccines are incredibly cheap and effective. For instance, the US could buy polio vaccine for all people living in affected countries for the price of just one F-22 Raptor fighter jet. (Vaccine = 13 cents, Jet = $150 million). If that's not a convincing case for foreign aid, then I don't know what is. Additionally, it's far from obvious to me that the vaccines would do less in the way of projecting American influence abroad than the jet--assuming this is the goal of the jet in the first place.

1,153,846,154 polio vaccines

One of Gates's persistent projects is domestic education. His focus in this area is unsurprising given his origins in an industry that relies on a highly educated workforce in order to remain competitive. The US ranks between 16th and 30th among 35 developed nations in math, reading, and science. A study by the Programme for International Student Assessment found that US students are in the classroom for fewer hours than their foreign peers. Even more disturbingly, the study found that America does very little to reward teacher excellence. In a country that readily admits the fact that much of its material wealth owes to its free market system, the absence of a similar incentive structure in the education system is worrisome and counterintuitive.

Bill Gates is regarded as an intelligent man who has spent the last few years contemplating this issue. He writes, "I think it is clear that a system can be designed that teachers agree is fair, has modest overhead, and rewards the teachers who are doing the most for their students." This is a strong opinion that critics of merit based pay need to deal with.

Finally, Gates discusses the Giving Pledge. In 2010, Gates joined forces with Warren Buffet to propose an unprecedented philanthropic venture. They urged billionaires to pledge to giving more than 50% of their wealth to philanthropic causes before or after their death. Buffett himself pledged 99% of his wealth. Thus far, 58 billionaires have pledged a minimum of $125 billion. The pledge counts Mark Zuckerberg, Michael Bloomberg, Carl Icahn, and Larry Ellison among its signatories. This example, set by the two richest men in the country, is tremendously encouraging.

Many would retire from the emotional rollercoaster of founding Microsoft to enjoy their fortune in private. Commendably, Bill Gates has become a very public philanthropist not only committed to solving some of the world's toughest problems but also committed to enlisting the help of other fantastically wealthy individuals. Whatever your opinion of Gates's actions while at the helm of Microsoft, one can't help but be inspired by his generosity after the fact.