2006 年 Charlie Rose：Warren Buffett with Bill and Melinda Gates

Warren Buffett with Bill and Melinda Gates

Monday 06/26/2006

https://charlierose.com/videos/18241

Warren Buffett and Bill and Melinda Gates discuss Buffett's decision to donate his fortune to the Gates foundation.

Charlie Rose: Warren Buffett, the CEO of Berkshire Hathaway and the second richest man in the world, announced yesterday he is giving much of his $40-plus billion fortune to the largest and perhaps most admired foundation in history, the Bill and Melinda Gates Foundation. In essence, he is using that foundation to pass his money back to society. It means the foundation, which now spends $1.5 billion per year on global health, education and libraries, will now spend $3 billion per year. Think of the consequences for those who are poor, sick and uneducated. It means Bill and Melinda and Warren can make even more real a guiding principle that all lives are equal. It means Warren Buffett joins great names in business history and philanthropy -- Rockefeller, Ford, Carnegie and Gates -- who have given their fortune back to society. Think of the possibilities and you'll understand why this is the most important and historic announcement ever in philanthropy. I am pleased that Warren, Bill and Melinda are making their only television appearance today on this program. Warren is a very good friend and I know and have great respect and affection for Bill and Melinda. Bill and I have done many television interviews before. This is Melinda's first appearance, and I hope not her last. Finally, Carol Loomis, the great business reporter from "Fortune" magazine. She broke the story yesterday in her cover story in "Fortune" magazine. The story is entitled "Warren Buffett Gives It Away." I am pleased to have Warren, Bill and Melinda at this table. Thank you. This is as much of a win-win as I've seen in a long time.

Warren Buffett: Yeah, i doesn't get any better than this.

Charlie Rose: Tell me the significance as you see it of what's happened.

Warren Buffett: Well, it's something I've always planned. My wife Suzy and I planned that whatever I made would go back to society. And originally, I thought she would outlive me and she'd make the big decision on it, the manner. But since her death, I had to rethink the best way to get the money into society and have it used in the most effective way. And I had a solution staring me in the face. And I had seen Bill and Melinda do what they have done with their foundation. You know, they've done it with their own money. They've poured themselves into it. The decisions are great. Their goals are similar to mine. So -- so the time is now.

Charlie Rose: Bill has already given you a book to start reading about all these issues.

Warren Buffett: He gave it to me. There will probably be a quiz after the show.

Charlie Rose: What else do you know about malaria, tuberculosis?

Warren Buffett: I think he wants me to contract all these diseases just so I can work on it.

Charlie Rose: How do you two see the significance of this, for you, for the causes you serve?

Melinda Gates: Well, for us, it's just fantastic, because we look at it as doubling the impact. The diseases we've already been working on and the education and the inequities that we've been looking at for so long just basically doubled by Warren's gift. And it's incredible, the depth that we'll be able to go to on some of these global health issues.

Charlie Rose: Bill?

Bill Gates: Well, it's a huge responsibility. In some ways, if you make mistakes with your own money, you don't feel as bad about it as if it were someone else's. So now we're even more intent on doing it right. And it's a very exciting time. The advances in medicine and other things we can do to relieve poverty -- we've been making good progress. And with the doubling of resources, we think our impact can even more than double. And so it's thrilling, but it's a huge responsibility.

Charlie Rose: I mentioned that you two believe and the guiding principle has been all lives are equal. What do you mean by that, in terms of how it affects you and how you look at the world?

Bill Gates: Well, it's a pretty simple thing. And it goes back to something Warren talks about, where you can be born anywhere in the world and your opportunities are very different.

Charlie Rose: This is ovarian lottery.

Bill Gates: Yes. And it's not really fair that we could save lives for a few hundred dollars in many countries, and yet we don't. We don't discover the drugs, or even if we have them, we don't get them out there. And it turns out that if you save those lives, that has this incredible effect on reducing population growth, surprisingly, and then you have more resources to have great nutrition and education and get this virtuous cycle going that the richer countries have experienced, and that's an amazing thing. That should happen throughout the world.

Charlie Rose: You mentioned Suzy's death made you begin to think about it because she was not going to outlive you and run the Buffett Foundation. Tell me about what led up to this? I mean, was this sort of you went to Bill and said, I've decided what I want to do? Were there a series of conversations? How did it unfold?

Warren Buffett: Well, I began to mull the various possibilities. And I wanted the money to be used effectively. And I've looked at a lot of foundations, Charlie. And there are a number that I admire, but there are none that are in the same class, in my view, as the Bill and Melinda Gates Foundation. And not just because of size. They really have looked at the world without regard to gender, color, religion, geography, and they said, how can we do the most good for the most people, and particularly the people that have gotten the short straws in life? And so, I mentioned that I was thinking about it to Bill many, many months ago. But I still was playing around in my mind the best way to do it, because I wanted something that would work well for the Berkshire Hathaway shareholders as well as for the people who are going to be the beneficiaries of the money. And finally, I came up with this plan. And when I decide on something, you know, I'm ready to go.

Charlie Rose: Truer words have never been spoken.

Melinda Gates: True.

Charlie Rose: So when you first heard this, what was your response? What did you think?

Melinda Gates: When I first heard it, it's something that's very hard to believe, that it might actually happen. But immediately turned for us to the responsibility. You know, when you give away your own money, you feel incredibly responsible as you do that. And then we look at you say, this is the body of Warren's work for his life, you feel I think doubly responsible giving away somebody else's money. And then I think immediately, we turn from that and say, OK, what can be done for the world? What can be done for good? And it's just an awesome thing to be able to think about the number of people that you could lift out of poverty with a gift like this.

Charlie Rose: Were there any issues that came up, Bill, in terms of the mechanics of this, how you do this? I mean, Warren had decided that he was going to give to five foundations, five-sixths of it going to Bill and Melinda Gates Foundation. Any logistics here that you had to overcome?

Bill Gates: Well, in the last few months, we probably paid some lawyers' bills to make sure we've got it structured the right way. But, you know, in the end, even though there's some paperwork and some of that, it's really pretty simple. One other thing that we're thrilled about is Warren's joining us as a trustee, and so there will be three trustees of the foundation. And that will be a great addition for us.

Warren Buffett: But that was not a condition of the gift, Charlie. I'd be totally happy if -- well, and the two of them are going to be running it. But --

Bill Gates: And we would have been happy to have Warren as a trustee without the gift.

Melinda Gates: Yes, exactly. That's how it turns out.

Charlie Rose: And the idea, the only condition of this is if something happens to them, if a plane goes down, as you have said, then what?

Warren Buffett: Well, that's a very, very low probability, but if they weren't available to run it, I would want to take a look at what the ongoing situation was going to be.

Charlie Rose: Take a fresh look.

Warren Buffett: Yes, take a fresh look. Doesn't mean I wouldn't be doing the same thing, but I just -- I am doing this because I have seen two extraordinarily talented people apply themselves big time to the major problems of the world. And I would want to -- I would want to see what was going to be the next act if that happened, but it isn't going to happen.

Charlie Rose: There is also this, a selfless act. I mean, didn't you have any great desire to see the Buffett Foundation and the Buffett Library and the Buffett this and Buffett that?

Warren Buffett: No. No. I like the Omaha public library.

Charlie Rose: What will be your role then? I mean, you will be a trustee, but will you sort of what?

Warren Buffett: If I have any ideas, they can use me as a sounding board. They can use me anyway they want to use me.

Charlie Rose: They're already doing that.

Warren Buffett: Well, that's true. And so, really it's not a big deal. But any time I can be helpful, fine. I won't get involved in their investments. That complicates life. So I'm totally out of that game.

Charlie Rose: Are their priorities your priorities?

Warren Buffett: Yes, overwhelmingly they mesh, yes. I wouldn't be doing it otherwise.

Charlie Rose: And you have the Susan Thompson Foundation looking at other issues.

Warren Buffett: Right.

Charlie Rose: And the kids have foundations, which are involved in a range of issues.

Warren Buffett: But I've seen what they're interested in. And I've seen the way they pour themselves into it. Bill gave a presentation at the Rainbarder (ph) in 2001, it was right after 9/11, and it was one of the best talks I've ever heard. I really wish I had had it on tape. And I've encouraged him to go on with Bill Moyers later on. I mean, it blew us all away. There were 40 or 50 of us there. And when you see a couple of outstanding minds, you know, passionate about doing something that's in sync with what you would like to see done, you know, that's a no-brainer.

Charlie Rose: You described the brains as ungodly.

Warren Buffett: Right, right.

Charlie Rose: The idea of what impact this has, will it change priorities? Will it change obviously the size of the staff? Will it change -- will you be able to do things that you couldn't before?

Bill Gates: Absolutely. In some ways, we have the challenge of success. That is, every time we get a new drug, then you have a much bigger problem of how do you get it distributed? How do you make sure it has the impact you have in mind? I mean, if you look at the top 20 diseases, there's at least 10 of those we're making very good progress and can expect in the next five to 10 years to have solutions. And so scaling up is very important. In education, as you get one high school that's working well that's a model, you'd like to see that spread throughout the country. And so what we've got here is the opportunity now to really deepen and accelerate. We'll add some things that relate to poverty, but the top goal being going after the health and poverty issues, and then education is the second. That's not going to change.

Charlie Rose: You have found that, in fact, if you can change health, it will have an impact on how many children people have. It will have an impact on a whole range of other things beyond their health.

Melinda Gates: Absolutely. And I think what this allows us to do is deepen what we do in health. So where we're already working on medicines for malaria or tuberculosis vaccine or an AIDS vaccine, we can also start to surround those programs. You can't give somebody medicine if they don't have any food in their belly to eat, or if they don't have clean water. And so looking at some issues around, say, agriculture, to help small farmers in Africa, give them drought resistant seeds for sorghum or help them get seeds that if there's a virus in their banana, doesn't spread from crop year to year, help them get their products to market and have more information. Helping them figure out ways that they can have clean water or healthy food to lift their family up, while we're also starting to solve some of these diseases I think is how we'll deepen the impact of what we're doing in health.

Charlie Rose: Is there and has there been any kind of dilemma between spending money in terms of the future, as you did with the grand challenge, and spending money today in terms of the logistics of getting existing drugs to people?

Bill Gates: Absolutely. I mean, we have finite resources, and there's a very healthy dialogue that goes on, where some say, hey, you ought to spend more on the immediate solutions, and others say, no, you're kind of unique in being willing to fund the research, and so you should focus more on that. And that's great. Having that ongoing dialogue, people who disagree with this, getting the advisers to come in on those issues is very helpful. Take AIDS as an example. Spending money on prevention has this incredible impact, because every case you prevent prevents the cases that might have caused. But then you see the face of the tragedy, the people who are getting ill, and you want to have treatment getting to them as well. And so these problems are big problems that can absorb huge amounts of money. And in fact, that's why we need to work with governments and make sure they get involved. We've been very pleased to see many governments around the world step up and do more in this area of global health.

Melinda Gates: And I think sometimes we also look for, is there a model project that we can do to prove something out, that then can be taken to scale in other places. So we got in early with antiretrovirals in Botswana, knowing that we couldn't possibly give antiretrovirals to everybody in Africa that needs them, but if we could prove out that a country could really do it when it wasn't being done. So we got into that in 1999 with Merck. We each put in $50 million. And the first time Bill and I went to visit Botswana, even in 2003 there were only about 3,000 people even then with our program on antiretrovirals. But now we've taken that where you've got 62,000 people in the country on antiretrovirals, and it was a model program. So then, when the government money, the PEPFAR money came in from U.S. government, that could be expanded in other countries. So a lot of times we'll go in that way.

Charlie Rose: And the research in terms of all of these things is an ongoing huge commitment in terms of the payoff coming down the road? In terms of -- you mentioned the 20 diseases. Give me a sense of what diseases that you think we're around the corner from dramatic differences? Malaria, TB, HIV?

Bill Gates: Then there's a series of diarrheal diseases, including rotavirus that we have a new vaccine for. And other -- two other causes of diarrhea. So that's the biggest -- the two biggest killers of kids under 5 are diarrhea and respiratory disease. And we see that we can get through about five different vaccines, drastically eliminate those deaths. Over 10 million children a year die, and those are the top two causes. And so the top five -- AIDS, TB, malaria and those two childhood causes -- we're making great progress there. The other 15, like visceral leishmaniasis, are less known because they're only in the --

Charlie Rose: And les pronounceable.

Bill Gates: -- tropical areas.

Warren Buffett: He's going to be my family doctor, Charlie. I want him in the operating room.

Charlie Rose: You're an expert on tropical diseases, too. The idea of what they are doing, was it important to you to be able to make this philanthropic gift and have it pay off immediately?

Warren Buffett: Well, you certainly want it to be used intelligently immediately. The payoffs don't necessarily come that fast. And frankly, that's why they will be a lot better at this than I am. I like immediate feedback. I'm the kind of guy, if I walk in the ice cream store I want a triple-dipper right there. So you know -- -- and really (inaudible), you have to have a longer view than that. You have to take delayed results in many cases. Now, they're going to be impatient to get the best results they can, but it's a different game in that respect. And they're very well suited for it.

Charlie Rose: You weren't convinced that you would be good at philanthropy, were you?

Warren Buffett: I think I'd be terrible at it.

Charlie Rose: Why?

Warren Buffett: Well, A --

Charlie Rose: Other than the fact --

Warren Buffett: -- I like the fast feedback. But secondly, it probably requires answering to a bigger constituency, in a sense, than I like doing. I like to look in the mirror and ask myself whether I'm doing OK. You know? And there are a lot of people whose opinions I really don't want to listen to, you know. So you have to be a little more diplomatic perhaps than I am. And you know, I'm just delighted, Charlie, you know, as I said in that article, I mean, if you've got something important in life to do -- let's say I was going to play the golf match of my life, you know -- and I could get somebody to substitute for me like Tiger Woods, I would do it any time. And if I had to sing on television, you know, and I could just mouth the words and get Sinatra in the back room doing it for me, I'd do it. So the idea that you have to -- you have various responsibilities in this world, and this money is a responsibility, but if you can get somebody better at doing something that needs to be done in your place, you know, I'm used to that.

Charlie Rose: People have been speculating, as you know, for a long time about why you haven't done this before. And you were saying you haven't done it before -- Suzy's death was one thing. What else?

Warren Buffett: Well, the big -- if you go all the way back, Charlie, I mean, Suzy and I decided when we were in our 20s that the money would go back to society.

Charlie Rose: When you told her you were going to be rich. One thing you could be sure of.

Warren Buffett: I was sure of it. She thought I was delusional. But as time went along, I've managed to convince her. But you know, it was always going to society. There wasn't any question about that. Now, my logic -- but it also went down the grate of what I wanted to do -- but my logic was that philanthropic needs would be huge today, tomorrow, 20 years from now, 100 years from now. And if people were going to devote their money to philanthropy, the ones who were high compounders should take care of the philanthropy 20 or 40 years out.

Charlie Rose: That would be you.

Warren Buffett: Yes, I really thought, you know, it made way more sense than to give $1 million 30 years ago, which might have been all I would have had available, to have it compound. And people who were low compounders should take care of the current needs. I mean, if I ran a university and I had two wealthy alumni and they were going to supply all the money, I would take the guy who wasn't going to do much with the money and use his money currently, and I would have the other fellow compound for me. So anyway, it was a convenient way to think anyway. And you know, that has been my philosophy on it, but now is the time.

Charlie Rose: Do you think people are surprised you did this?

Warren Buffett: Probably, yes.

Charlie Rose: When you made this decision, you had to ask yourself, will there be consequences for this extraordinarily compounding that has been taking place? And will it affect Berkshire Hathaway stockholders?

Warren Buffett: Yes. And I don't think it will one iota. As a matter of fact, 31 percent of the money that Berkshire Hathaway makes, if we can make another $100 million, 31 percent of it through my shares is going to philanthropy. So if there's any -- if you could have a greater motivation than I've had over the years -- I'm not sure you could -- but I would have it now. It's a great feeling to know that as the company becomes worth more and more money, that it actually translates into something good for people around the world.

Charlie Rose: So people put this value on it. You, just for the benefit of the audience, the Gates -- Bill and Melinda Gates Foundation, about $30 billion, something thereabouts?

Warren Buffett: That stock is committed, and in terms of present market value it would be about $30 billion.

Charlie Rose: What you were doing is committing about $37 billion based on the value of shares today.

Warren Buffett: Today.

Charlie Rose: $37 billion.

Warren Buffett: Right.

Charlie Rose: It will be given -- it starts immediately, in 2006.

Warren Buffett: Right.

Charlie Rose: It will be given over a period of years.

Warren Buffett: It will be given indefinitely, in a sense. I mean, and to the extent that Berkshire becomes more valuable, which I think it will -- -- it can be a lot bigger than $37 billion over time, and I think it will be. And you know, the bigger the better. It can be going on 20, 30 or 40 years from now.

Charlie Rose: Bill and Melinda will agree on this point. I know of no one who loves his work more than this guy here.

Melinda Gates: Absolutely.

Charlie Rose: He loves to tap dance to work, as he says. That will continue.

Warren Buffett: Yes.

Charlie Rose: You'll go back to Omaha and tap dance to work, and make these decisions, now knowing that you are not only benefiting the Berkshire shareholders but also people's lives far away.

Warren Buffett: I knew it would benefit philanthropy eventually, but now it's very tangible.

Charlie Rose: It's tangible.

Warren Buffett: It's very tangible. And every year, I hope those shares that are committed to go that year are worth more money. And over time, you know, I think they will be. So this can be a lot bigger. And it's up to me to work to make it so.

Charlie Rose: But you do get great satisfaction from the fact that you now have made this decision and you know where it's going.

Warren Buffett: Yes, absolutely, Charlie. I mean, it's the second act of the money, you know, basically. You amass these claim checks, in effect, which money is, on society, and then you figure out the best use for them.

Charlie Rose: All right. How is your role going to change at all? Bill announced about a month ago that you were giving up chief software architect at Microsoft, leaving executive responsibilities, although you remain and will remain as chairman. Does that mean that your role at the Bill and Melinda Gates Foundation will change?

Bill Gates: Yes. I will, in June 2008, I'll switch and become full-time at the foundation. And that was actually developing in parallel with Warren's thinking --

Charlie Rose: But not connected?

Bill Gates: -- and they're unrelated. They're actually somewhat synergistic. That is, it's thrilling that as I'm going to full time, that the scope of the resources have been expanded, more than doubled, because of what Warren has done. And my role is to help us learn. Melinda and I both travel quite a bit. I'll get to go to a lot more schools, a lot more of those trips, read more of these long health books. Patty Stonecipher, who runs the foundation, has done a fantastic job and has been thinking about this scaling up, how we grow the staff and yet keep the efficiency that we all believe in. And so I'll be helping with strategy far more than I've been able to.

Charlie Rose: So rather than one day a month, you're now going to have measured assistant-partner a lot more.

Melinda Gates: It's going to be great. We love doing this work together.

Charlie Rose: What ought to be said -- and Warren has reminded me of this in every conversation we've ever had -- this is named the Bill and Melinda Gates Foundation for a very good reason, in terms of her involvement in this from the get-go. You know, what do you do and how is it divided between, and how will this evolve in terms of you two as trustees and sort of the -- make all the decisions and set the vision, along with the people who execute it?

Melinda Gates: Well, I think you're using the right word, which is evolve, which is how our roles have evolved over the last 10 years that we've been at this together. I mean, I think it's hard to predict exactly how much time you're going to spend on something, but Bill spent more and more time over the years. I've had a bit more time, obviously, because I don't have a full-time career. Our kids are getting to where they're all at sort of school age now. But you know, I think it gives us more time to travel together. I think it really gives you a depth to the work, when you can go out to Bangladesh and be in the slums, go out to India and be there, be with the people in Africa. It gives you a real depth to understand what are the issues they're facing. There is an incredible program already in tuberculosis, that has been going on for a long time, where every day for six months if you're trying to be treated for tuberculosis, they give you a pill. So I was out in Zambia and saw this going on recently. But you know, you stand back and you ask the question, well, six months every day coming in and standing in line for two hours to get your pill with no food in your belly, that's not a successful health program. So sometimes I think you have to actually be on the ground to understand what those numbers mean. And we're already looking at how do you cut that time in half and how do you ultimately get a vaccine. But I think those are the types of trips and the types of discussion that enrich the flavor of what we do together. And today, when I come back from a trip or when we're on a trip together, we just have a whole another level of discussion about where we want to go and how we want to deepen the work.

Charlie Rose: Many people believe that because of business techniques -- demanding results, setting goals and making sure that they are met -- that you guys have introduced something new to philanthropy and -- as a model. Tell me how you think the Bill and Melinda Gates Foundation is different, or how you believe its guiding principles ought to be.

Bill Gates: Well, I think there is something to be said for being incredibly results-oriented and having the kind of optimism that if you bring great people together and set very ambitious goals, amazing things can happen. I don't think that's totally new. I think you can go back to Rockefeller --

Charlie Rose: Rockefeller, yes.

Bill Gates: -- and say he was willing to go against conventional wisdom. He was willing to take on very tough problems. You know, again and again we find things where the Rockefeller Foundation was doing it right.

Melinda Gates: Absolutely.

Bill Gates: The philosophy that Carnegie had in "The Gospel of Wealth." Warren handed that out at a get-together we had, and you know, it really helped me think about philanthropy, and, you know, how you ought to set very high goals.

Charlie Rose: This is before you created the foundation?

Bill Gates: That's right. The whole idea -- -- the whole idea that -- that leaving the wealth to your children would actually not be the best idea for society or for them, that came out of some things that Warren was talking about right around the time we met him. I was starting to think, oh, geez, this is a problem I'll have to deal with. Here is some very good advice about that. And now, here we are. But I do think energy and pulling people together the right way, getting partners to work together in new ways, it's what's allowed us to move as fast as we have.

Warren Buffett: Charlie, I've had -- in business, I had a great partnership with my partner, Charlie Munger. And I've seen what happens when you get two people together that, you know, that are totally in sync but also have different ways of looking at things but are working toward a common goal. And you could not have a better pair than Bill and Melinda running a foundation.

Charlie Rose: Which -- I wonder, do you think he'll be drawn into this and his involvement will deepen?

Bill Gates: A little bit, yes. I think Warren would be an incredible philanthropist, but he loves his job. And that's what he's going to do full time.

Charlie Rose: I know. But you love your job and you have misgivings about leaving Microsoft.

Bill Gates: No, I do. This is a tough one. It's unusual to have two things that you love and that you think are important and challenging. And so I've had this debate for several years, and I wanted to be very explicit about the change, and I don't even know what it will be like but I'm very excited about it. And this just reinforces the importance of having that time and spending it well. But we had Warren at a discussion about microfinance about a month ago, and it was great talking with these bankers, and Warren was asking about their costs and did people repay the loans. And so we're going to draw him in a little bit. We'll do our best.

Charlie Rose: I'll bet. You have said it famously about children, your own children, who you've done wonderful things and created foundations for them --

Warren Buffett: I'm very proud of them.

Charlie Rose: Exactly. You're very proud of them. And they feel the same way about you. That you wanted to leave them enough money so they could do whatever they wanted to do, but not do nothing.

Warren Buffett: Yes. They can do anything but not nothing. And I don't believe in dynastic wealth. I mean, if you contrast -- it's nice to leave something to the kids. And I mean, I can understand a person who wants to leave their farm or a small business they built and all of that to their children, but dynastic wealth, the idea that many generations should be able to go without doing a thing if they wish, simply because they came from the right womb, I mean that really strikes me as flying in the face of really what this country is about. I mean, we believe in a meritocracy and equality of opportunity. And dynastic wealth flies in the face of that. So I've really felt that if you have a choice between having a foundation like this doing tremendous things for people all over the world, or having a bunch of people, you know, as they say, that came from the lucky sperm club --

Charlie Rose: The ovarian lottery. Now, you've mentioned Charlie Munger. You called him up and said, I'm thinking about doing this. What was his reaction?

Warren Buffett: He said, "you finally had a good idea." I've been waiting for that for years.

Charlie Rose: Did he really?

Warren Buffett: It took me 40 years to get that out of him, but I finally did.

Charlie Rose: One good idea.

Warren Buffett: Yes, one good idea. He's not expecting another one.

Charlie Rose: But he believed in it and said this is the right thing.

Warren Buffett: Oh, he loved it. Yes, sure.

Charlie Rose: The idea that Warren got you to start thinking about philanthropy, then in 1993, you know, or '94 you read this report, world development report. Tell me what that said to you that seems to be linked to everything you have done since then?

Bill Gates: Well, before I read that, I thought that the world was really prioritizing how money was spent so it would go after these inexpensive ways of saving lives, and that there wouldn't be a disease I never heard of that was killing over half million children a year, rotavirus. And that if there were, all the drugs companies would be working on it. And so this fact that when people are so poor they can't afford the medicines, so nobody works to create those medicines and you have diseases that aren't in the rich world so you don't get the trickle-down benefit that you're solving it for the rich and therefore eventually it gets to the poor, I hadn't known that. And --

Charlie Rose: If you didn't know this fact, and so therefore --

Bill Gates: Right. I thought that coming into philanthropy, all the really important stuff would already be addressed, and so it would just be on the margin what could be done. And you'd have to struggle to find something really impactful. But once I read that report I said, hey, there is something here -- actually a tragedy that it's not addressed, but in terms of being the key priority that we could put our energies into and go after. It just jumped out at me.

Warren Buffett: Charlie, Bill and I sort of have a background mind-set of a market system. And a market system works awfully well. It's worked well in this country. But a market system has not worked in terms of people, poor people around the world, with something -- with a disease that should be available for just peanuts --

Charlie Rose: It doesn't work because people can't afford to participate.

Warren Buffett: Yes, the market system just fails in that case. And you have to interject yourself into that, and make sure there is a system that will deliver. I'm a big believer in the market system 95 percent of the time, but -- it's done pretty well for me. And the world, absolutely. But there are things where the market system is not going to solve the problem. And that's where Bill came in on this.

Charlie Rose: You have said to me in other conversations, you know, that when you were thinking about what foundation you might be involved in, not in terms of choosing one but in terms of what your money might -- that you wanted to choose things that had perhaps been neglected.

Warren Buffett: Yes. If the money is pouring into something and talent, you know, there's really no reason to duplicate it. There's millions of good things to do in the world. And you're looking for something that's important. You're looking for something that you'd be reasonably good at in terms of implementing any ideas that do come to mind, and you're looking for something that really needs more funding. And that's exactly the way that Bill and Melinda have come at the problem.

Charlie Rose: You know who, Bill, would -- and Melinda, you can certainly speak to this -- who would love this is Suzy. I mean, the idea of what you have done.

Warren Buffett: Yes.

Charlie Rose: Because she said to me, you know, I'm always wanting him to do more.

Warren Buffett: Right. Yes, yes. I was not holding her back --

Charlie Rose: Holding her back from speaking her mind or from giving away.

Warren Buffett: No, her -- no one could have had better instincts about doing it. And she would have liked to have started much sooner, as soon as it could be done on a good scale. And I wouldn't quarrel with that. I mean, she saw people one at a time and she saw them with needs now. And she was hit by that, obviously. I mean, I don't disagree with that -- it was perfectly natural for her to react that way. And if she -- if I died when I was 60 or something, there had been a lot of money then, I mean, she would have really gone to town with it.

Charlie Rose: And you would have been pleased that she would be running the foundation --

Warren Buffett: Absolutely. Absolutely.

Charlie Rose: -- dedicated to that.

Warren Buffett: Absolutely.

Melinda Gates: She cared a lot about -- about these issues. I mean, she talked enormously about women lifting themselves up in their situation, and particularly having access and tools to family planning was something she was very interested in. And she traveled extensively, especially to Vietnam and a lot of places in Southeast Asia. So she cared a lot about these inequities. And I keep thinking how pleased she would be that Warren made this decision.

Charlie Rose: Yes. And reproductive rights and parenthood and all these kinds of issues.

Melinda Gates: Absolutely.

Charlie Rose: What are the things that you're not doing, not beyond the things we've talked about, where you know there is an important issue out there or an important cause, that you haven't been able to get to, simply because you've been too busy with your own priorities right now?

Melinda Gates: Yes, well, I wouldn't say that it's because we're too busy. We chose at first to focus on the greatest need, where we saw these medicines could help or vaccines could help, but one of the things we've known that had also been on the back of our minds for some time is the more you travel around the world and meet these people who need the medicines, they're living in slums. I mean, the greatest amount of population growth is going to come in the cities in these countries. And so when you go to slums, there's a whole variation of what those look like, from ones that have absolutely no clean running water, no sanitation, no streets -- you know, the houses are made of reads -- to ones that actually are getting somewhat sophisticated, where they've built a latrine or they've got trash services or they might have a little bit of a paved road. So looking at how you can plan for that population group and getting the governments to start thinking about it so they'd put some infrastructure in place so that when people move into those cities and they are living on less than $2 a day, that there's some place that they can go to actually have basic services.

Charlie Rose: Do you feel some urgency now, because, one, you're spending more time, B, you've got more resources, more in your arsenal as you have said, to do more with respect to governments? Because you have access to every head of state in the world, I'm sure, to get them more involved, because there are things, notwithstanding this edition, that in terms of sustaining impact, you're going to need other people to step up.

Bill Gates: Absolutely. And the last three years have been good. The United States under President Bush has stepped up with AIDS money under the PEPFAR program. A number of European governments, led by the U.K., but with France and others, have stepped up and given more money to vaccines. Norway also doing a great job there. And we need to keep that going. Bono has been a great partner in getting that dialogue going and creating the visibility. In fact, Warren and I called him up and gave him the news of what was going on.

Charlie Rose: This was last night or a week ago or --

Warren Buffett: Yesterday afternoon.

Bill Gates: Right after the story came out --

Charlie Rose: -- another possible leak. Go ahead. So you called him up and --

Bill Gates: Getting governments, the rich world governments more engaged in these issues in the right way, and then getting the developing world governments to have these priorities and get the infrastructure in place. That will make a big difference in how effective we are. We have to do that. And we're going to get more time to focus on that.

Charlie Rose: And treat it with more urgency. How much corruption is there in the delivery of health care to the poorest among us in the most difficult countries?

Bill Gates: Well, in fact, some things like building roads or building a dam, things like that, you end up with a lot of layers that lend themselves to diverting the money. With vaccines, it's not -- it's easier to have transparency. Nobody likes to horde them, because you don't need that many.

Charlie Rose: And you have to refrigerate them and all that.

Bill Gates: And being able to go out and check if they were actually delivered, to check the coverage is relatively straightforward. So we have to be vigilant on this. There's always going to be things like, you know, the jeeps that got bought and where did they end up? And -- but it's a simpler system than most development, and therefore we ought to be able to make sure that 95 percent of it gets exactly to where it should go. There is going to be a little bit of leakage, but in fact, if you're not comfortable with that, you shouldn't --

Charlie Rose: If you don't recognize leakage, that's it. You hope in what way this will in a sense spur other wealthy people?

Warren Buffett: Well, it's an interesting thing, Charlie. When people are thinking about amassing wealth, they frequently go to somebody else that they think knows more about it than they do and join in. I mean, 50 years ago -- 50 years ago last month I started a partnership, and seven people gave me $105,000. Now, why did they do that? They thought that I would be better at accumulating money for them than they could themselves.

Charlie Rose: Good bet.

Warren Buffett: Well, good bet, it worked out OK. But why not apply that same thinking when you're eventually dispersing wealth? I mean, the idea that your old business cronies or some local pals at the country club or whomever, or even a professional staff that may take over the agenda, the idea that you can't also apply that same theory of getting people that are better than you are at doing something in dispersing wealth as well as amassing wealth, I think it's sort of obvious. So I would hope that people even of modest means that don't have something specific that they really want to do -- and if they have something specific, God bless them, if they have their alma mater or whatever -- but if they are really sort of groping for what to do with far more money maybe than they ever anticipated that they would have, they can look around. Doesn't have to be the Gates Foundation at all. But they should look around for somebody that they think will do the job better than they can do it themselves, that has somewhat similar goals, and turn the money over to them. I think it makes nothing but sense.

Charlie Rose: One thing that the Gates Foundation does that many people may not know about is that you create partners where people not willing to take, they can't, A, because they're in a market system, pharmaceutical companies, or perhaps governments, because they can't take the first step.

Melinda Gates: Right.

Charlie Rose: Tell me how that works.

Melinda Gates: Well, I'll give you an example maybe that will highlight this. There's an organization that we work with called the Institute for One World Health. There's a disease that affects a lot of people, about 200,000 people, primarily in certain states in India and Bangladesh. And this institute for One World Health had seen this drug that had been proven that they thought it worked in one place in Africa. But the drug was 50 years old. It had been created in Italy. There was only one lab in Malta that still was working on it. And they said, look, if we could really do the final stage trials of this drug and prove out that it could work on this disease, kalaazar, visceral leishmaniasis, and really get it out there, we could save a lot of lives. And so we've worked with them to help them finish the trials. Now we're helping them push it through the regulatory body in India, which takes a whole another set of learning and infrastructure to do. And then ultimately we'll actually go with the David and Lucile Packard Foundation, having an organization they work with called Genani (ph) that actually can distribute drugs out in these particular states, in this place in Bangladesh. And so we'll work through them to get the drug distributed out. So that's an example of how we took something where there really is no market for that at all in the developed world, but in the developing world it's a horrible parasitic disease that lots of people die from. And so we're going to help get that out to the people that need it, through those different organizations.

Charlie Rose: Is there much sharing of information among foundations and at the highest levels of people that are doing research on important subjects?

Bill Gates: Absolutely.

Charlie Rose: Unlike the software business.

Bill Gates: Yes, there's no rivalry, really. We're all going after the same thing. And you know, we don't do any science ourselves. You mentioned pharmaceutical companies. Well, they know how to create drugs and test drugs. And so for example, GlaxoSmithKline, GSK, has been one of our partners, where we're using their expertise, but we provide the financial resources so that they can turn to their shareholders and say, hey, this is responsible. We're doing retroviral (ph) drugs, and the resources are here for us to apply ourselves to malaria, which is one of our great partnerships with them. So in a sense, we're just a small piece of the puzzle. It's these partnerships that we create that really do all the work.

Charlie Rose: That provide the kind of manpower and money that you need for the future. Do you have any idea how many lives the work of the Gates Foundation has saved? What do people tell you about children that are alive today that might not have been otherwise?

Melinda Gates: Well particularly the easiest place to measure that is in the vaccine work. I mean, we got into that work early in 1998, 1999, and we made a large commitment to this global alliance or vaccine initiative that we actually helped create. And we got other governments to come into it.

Charlie Rose: Which has been the biggest recipient of your funds.

Melinda Gates: Exactly. We gave them $750 million initially. And we went back just this year and announced -- or in 2005, announced another $750 million grant over another 10 years. So we've gotten rich governments to come into that fund, and then 75 of these developing world governments come and apply for the money. But when you look at the vaccines that are out there, we know -- we think we know that 1.7 million lives have been saved just by children getting the basic vaccines that we take for granted in our country. Diphtheria, tetanus and pertussis is something every mother in the U.S. goes and gets for her child when they're under the age of 1. That, getting out some of the new vaccines, HIB, yellow fever. Those are all things that we're getting in the hands of children. So you can measure it in that way. And they estimate over the 10-year life of this thing, I think that we'll save about 10 million children's lives via those vaccines.

Charlie Rose: Ten million.

Melinda Gates: Yes.

Charlie Rose: That says it all, doesn't it?

Warren Buffett: (inaudible).

Charlie Rose: It does. Is this part of what drew you away from something you loved to where you will spend the rest of your life -- you're 50 years old. You're 75.

Warren Buffett: I've noticed.

Charlie Rose: Well, Carol Loomis' first question, she said, are you ill? Are you doing this because you're ill?

Warren Buffett: I'm in amazing health, I mean, considering the fact how I eat. I can't believe it.

Charlie Rose: Ice cream and Coca-Cola.

Warren Buffett: Absolutely, but it works.

Charlie Rose: Is the fact that you can save lives something that you never imagined when you were in, you know, as you have said, 24/7 I was a, would you say, I was a -- eyes down, software guy?

Bill Gates: Well, doing software is a phenomenally fun thing, and the empowerment it provides, that, you know, that I'll love and I'll always keep a connection to that. But as you say, for the rest of my life, starting two years from now, my full-time work is going to be this foundation. And it's thrilling, because I meet brilliant people. I give them a little bit of optimism, show them maybe a path they might not have seen. Go out in the field, see the setbacks, try and figure out a way around those. I get to work with Melinda, my dad, Patty Stonecipher, just incredible people. And so, you know, I'm doubly blessed to have had the work at Microsoft and now this foundation work. When we described to a friend what Warren was doing, you know, we were saying, wow, this is an amazing thing that the two of you met and that this could come together. And they acted like it was almost obvious that this would happen. I have to say, to me it wasn't. I mean, when Warren first mentioned it, it was like, wow, is he serious about that? Wow. Are we ready for that? And it's only hitting me today. I mean, this is the day Warren is going to actually sign -- sign these letters.

Charlie Rose: But how long ago was that, though, Bill? Do you remember? He first mentioned it to you?

Bill Gates: Over the last year-and-a-half or so, he mentioned it. At first, it was, you know, kind of in passing, just a very nice thing that, gosh, your foundation is doing well. And we'd have that ongoing dialogue. It was in the last few months that it was clear he was getting very serious. And with Warren, once he decides something, it's very crisp.

Charlie Rose: The other thing I know about you, once you make a decision, you don't look back. You have not lost one moment of sleep, because I might be doing the wrong thing. I might, maybe, maybe, maybe, maybe. Nothing.

Warren Buffett: Nothing.

Charlie Rose: Do you wish you had done this earlier?

Warren Buffett: No, I really don't. I think this is the right time.

Charlie Rose: This is the right time to do it.

Warren Buffett: Yes, I do, Charlie, yes. You know, I've had a good chance to see what they've done. I feel Berkshire's position better than ever for the future. One thing about it, if I had given the stock in a lump amount, there might be people who'd say that they were too concentrated in one stock and that sort of thing. Well, I want the well-being of their foundation to be sort of concentrated in Berkshire, because I think it's going to do very well. So I wouldn't want them to be forced to sell it and you know, buy government bonds or something of the sort. So this way, I think -- I don't see how it can be any better.

Charlie Rose: So they're sitting on stock and may or may not have to cash in the stock.

Warren Buffett: Well, yes, but they'll tend to cash in the stock as it comes, as will the other foundations. But I've got --

Charlie Rose: To raise money --

Warren Buffett: -- all the years ahead to make the stock more valuable, which is, you know, I've always wanted to do anyway, obviously, but it will be even more fun now.

Charlie Rose: But -- I'm coming back to another point. How will this change your life day to day?

Warren Buffett: Zero.

Charlie Rose: Zero.

Warren Buffett: Yes.

Charlie Rose: You'll go back to Omaha and you tap dance to work --

Warren Buffett: That's right.

Charlie Rose: You get on the phone -- Bill once said to me, you do three things. You talk on the phone. You read. You play bridge. And then watching the cable television show you like.

Warren Buffett: What else is there in life?

Charlie Rose: Well, I'll tell you what else there is in life. There is the satisfaction to know and to see that you can, while you are alive, not when you're dead and not among executors, that you can do something that you can see, because it's already taking place. Changing lives.

Warren Buffett: And see it getting done right.

Charlie Rose: The accommodation. Yes. The idea of what you have done, has it changed your thinking since you began this? In 1994, was it?

Bill Gates: Yes, absolutely. Every year, and we're going to go on learning. You know, in philanthropy, to make sure you're spending the money right is harder. You don't get a market response quite the same way. And so you're going to do things wrong. And you're dealing with partnerships and incentive systems, and so there's a lot of choices that you have to make. For example, when we started out, we didn't think of having a dialogue with governments, because we weren't sure enough about what we were doing to be able to go and say, look, put more money into vaccines, put more money into AIDS. And it was four or five years into it that we started to say, wow, even our resources are small enough that we're going to have to have advocacy. And so that's a new capability that we're getting better at. And working with partners like Bono to have that, and we need to keep learning.

Melinda Gates: I would say even in education, the U.S. education system, realizing -- I think we went into it a little bit naively at first, thinking if we could get enough of these small schools up and running, you'd get enough that the system would see how great they were that they would start to really replicate. And as we've learned more, we realized not only do you have to have of course great intermediaries to replicate those models, but you really have to work with the state and local government. You have got to work at the district level, and you've got to look at -- work at the state level if they're going to sustain those schools and grow more over time. And that's been a lesson for us. And we'll take lessons like that in every area that we work in.

Charlie Rose: Sixty percent of the Gates Foundation is directed to global health, as I understand it. And the other 40 is education, especially high school education and libraries. That pretty much would not change in terms of the percentage of what you spend in the future?

Bill Gates: That's right. The global health, which we also now include global development, so that's finance and agriculture and slums and sanitation, that is going to be 60-plus percent. And then education, which is very focused on the United States, you know, we said what's the biggest inequity in the world and what's the biggest issue for the country that we were lucky enough to grow up in, to maintain its incredible position and its incredible contributions. And so that will stay as our other big priority and be about a third of the resources. So both will be scaling up with this incredible gift.

Charlie Rose: Global health has gotten more attention, some would say. Is it simply because it's so much more visible, or have the successes there been more tangible than in education?

Melinda Gates: Well, I think you have to realize that global health is a whole mix of problems. I mean, we're talking about malaria and tuberculosis and HIV and rotavirus. So when we talk about it, it's hard to talk about it as all one thing. And I think Bill and I are both equally passionate about how do you lift up these people from poverty, about all the issues related to them. We equally -- we talk a lot about U.S. education, but I don't think it's not -- there aren't quite as many things to go and discuss as there are in global health. But we're constantly pushing in all these different areas. So, and I think also, as Bill gets more time and we're in the schools more, you'll hear us more, even more talking about the U.S. education system. We are passionate about it. And you know, I think -- you know, we give a lot of scholarships. We've got 1,000 kids a year on scholarships through one of our programs. And those are fantastic stories when you go and talk to those kids.

Charlie Rose: Thank you for coming. It's great to have you here on this program to talk about this. And I hope you'll do this again now that I've gotten you here. Bill, it's great to see you. I think you and I have done more interviews than anybody else. And it's always a pleasure to have you on the program. This is a great day for you.

Warren Buffett: It's a great day.

Charlie Rose: It really is.

Warren Buffett: Yes.

Charlie Rose: And there is a sense of excitement about it, because it is about the future. It's about changing lives. And I'm deeply, deeply thankful that you came here, because it is such an incredible story of this period, and as you said, this period of your -- your late wife Suzy is part of what's happened here today.

Warren Buffett: Thank you.

Charlie Rose: Thank you all for joining me. Thank you for joining us. The Bill and Melinda Gates Foundation as of today is a much different foundation. With the same goals, but more, as Bill would say, in its arsenal, to make an impact on people's lives around the world. Every life that is equal. Thank you for joining us.