Richard Klausner Spends to Save Lives

At the wealthiest foundation on the planet, a brilliant scientist is giving away Bill Gates's money in pursuit of a lofty goal: solving the world's most pressing health problems.

The numbers are staggering, the loss of life almost unfathomable. Of the 40 million people worldwide who have HIV or AIDS, 28 million of them live in sub-Saharan Africa. Because the most effective treatments are often expensive and unavailable, a disproportionate number of Africans are among the 3 million people killed by HIV/AIDS every year.

Malaria threatens as much as one-third of the globe's population — more than 2 billion people — and infects up to a half-billion individuals every year. Of the 2.7 million people who die from the infectious disease each year, approximately three-quarters are young African children.

Another 2 million people, nearly all of them inhabitants of the Third World, die each year from diarrheal diseases. In the United States and other developed countries, such illnesses are often easily preventable and rarely fatal. But not for the men, women, and children in the poorest of the poor countries. It's as if they exist in another time, when water and mosquitoes still pose grave danger and human beings are a far more vulnerable species.

This is the grim state of global health today. Yet Dr. Richard Klausner, who is tackling these and other medical crises in the developing world, is anything but disheartened. In fact, he's unfailingly optimistic. He talks of bridling epidemics through innovative forms of intervention and accelerating the development of vaccines for HIV and malaria. He talks of creating sustainable health care and providing nutrient-fortified food. He talks of hope.

"There's every reason to be incredibly optimistic that we have the capability to solve these problems," Klausner says. "That's what the past hundred years have shown — that we can actually solve problems like this."

Coming from practically anyone else, such talk might be dismissed as wishful, if not delusional, thinking. But then again, Klausner is not your typical global-health advocate. He's undertaking these problems with a powerful, enviable, and unique resource: Bill Gates's bank account. So Klausner has plenty of reasons to be optimistic. Billions, in fact.

In May, Klausner joined the Bill & Melinda Gates Foundation as its global-health executive director. With about $24 billion in total assets, it is reportedly the largest foundation in history, and its main focus, in addition to improving education, is improving global health in the places where conditions are the worst.

Of the nearly $5.5 billion in grant commitments that have been made so far, the largest chunk of resources — more than $2.8 billion — targets health problems. The grants make existing prevention methods and treatment more accessible in places such as Africa and India and fund research and development of vaccines in the hope of eradicating diseases that disproportionately affect people in Third World countries.

In a speech delivered to the United Nations in May, Bill Gates explained that once he discovered the stunning health inequities between the richest and poorest nations, he was motivated to do something now rather than later in life.

"Of the $70 billion spent globally on health every year," Gates said, "only 10% is devoted to research on diseases that make up 90% of the total disease burden."

By law, foundations in the United States are required to spend 5% of the value of their assets every year on grants and operating expenses. For the Gates Foundation, that amounts to roughly $1.2 billion a year. What it means for Klausner is the opportunity to give grants totaling more than half a billion dollars. It's an awful lot of money, he concedes, but not nearly enough for the foundation to solve the world's health crises on its own. So the organization works with other key players on a problem, as opposed to competing with them or duplicating their efforts.

The foundation has the greatest impact, says Klausner, when it acts as a "convener," focusing various groups — governments, health organizations, drug companies, universities — around an issue. It also acts as a catalyst, demonstrating to the rest of the world what works and spurring others to do more.

Several years ago, for instance, the Gates Foundation jump-started the foundering immunization efforts in more than 50 imperiled countries by committing $850 million in grants. Since then, those gifts have attracted a host of other funding to the cause. "Perhaps the most important thing that the foundation has done is revive the world of vaccines," says Barry Bloom, dean of the faculty at the Harvard School of Public Health.

But if you poll the American people, says Bloom, foreign aid continues to be a low priority. Klausner could be just the firebrand to change that attitude. "I have such hope for his role as a charismatic leader and a visionary," says Bloom. "His personal enthusiasm and dedication are infectious, and he's smart as hell. He has the capability to make every world leader and the public aware of the powerful effect that science can have on millions of children and on the economies of developing countries."

Resources for the Future
The world's wealthiest foundation is located in the Seattle area, but not on Microsoft's Redmond campus. Situated on Lake Union near downtown, the Gates Foundation occupies an unmarked building, a former check-processing plant that, like the nonprofit itself, is evolving. The renovation of the building is still under way. Everything about the place feels understated, starting with the lack of signage out front. Inside, the decor is minimalist and mostly modern. There is no massive staff to tackle the organization's truly massive goals. There are 220 staffers, 20 of whom work in global health. That's approximately 4,700 people fewer than Klausner had as director of the National Cancer Institute, one of the largest research-and-health agencies in the world. But no matter. When the Gates Foundation called, he jumped at the opportunity.

"For a long time, I've had a love for how science and technology can be integrated with public policy to solve unbelievably difficult and important problems about the human condition," he says. At the NCI, he revived cancer research in this country and beyond, steering it in a groundbreaking direction. By focusing on the molecular and genetic makeup of cancer cells, researchers now have a better understanding of the disease and have dramatically improved the capacity for diagnosis and treatment.

When Klausner interviewed for the new position, he was reminded by cochair and president Patty Stonesifer that the Gates Foundation was a young organization, albeit one that had experienced explosive growth. It took off in 1999, when the Gateses combined two much smaller foundations. The Gates Learning Foundation, started in 1997, focused on education and operated out of an office located above a pizza restaurant. The William H. Gates Foundation, started in 1994 in Bill Gates Sr.'s basement, focused on global health. The result of the marriage of these two nonprofits, the Bill & Melinda Gates Foundation, had grown to $21 billion by January 2000.

Nearly three years later, the organization is still figuring out how to have the greatest impact, given its tremendous resources. In April, the global-health staff developed a set of guiding principles to articulate its grant-making strategy, focusing on three primary areas: HIV/AIDS and tuberculosis, infectious diseases and vaccines, and reproductive and child health. Klausner's job is to take that "30,000-foot view" and to turn abstract goals into effective grants. "That's the hard part," he says, "I find it intellectually challenging."

The foundation receives around 3,000 formal grant requests every month in addition to lots of less-formal pitches. The global-health staffers develop and review the proposals and submit their top picks to Klausner and cochairs Stonesifer and Bill Gates Sr. for approval. On major grants, "the benefactors," as the staffers refer to Bill and Melinda Gates, make the ultimate call.

"A well-written grant is a beautiful thing," Klausner says. "You have a really smart person saying, 'I have this idea.' It's a wonderful story." Klausner relishes problem solving — the tougher the better. He's energetic, inquisitive, and analytical, and he examines proposals from various angles, listening to his colleagues' perspective and asking all sorts of questions: What about this? Or this? Is this really the best approach?

Sharing his decision-making process with the staff is crucial in demonstrating the philosophy and priorities of the foundation. For Klausner, the process doesn't end with the decisions on grants. Soon, the senior leadership team will meet regularly to discuss proposals that didn't make the cut.

"It's an opportunity to ask, 'What's our thinking about turning this down? Are we missing something important here?' " Klausner says. "You need to be structured in how you pay attention, and you need to learn from your experiences," he says. "We need to function as our own historians."

Every six weeks or so, Klausner meets with Microsoft's legendary founder to discuss existing grants, strategize about new partnerships, and review some grants. "So far, the education seems to be going both ways," says Klausner. "I've come away saying, 'Why didn't I think of that?' " The meetings with Gates reinforce one of Klausner's theories about productive group discussions: There is value in including nonexperts. Because they don't have any preconceived notions about research, they often ask new questions and generate new ideas.

One of the shifts within the global-health program is a focus on being less reactive and more proactive. That is, actively seeking new ideas for grants rather than relying on the proposals that come in. Klausner aims to do this through working groups — not a new idea at the foundation but one that he hopes to formalize as part of the grant-making process. Because of the enormous funding potential that the foundation represents, the Gates Foundation has the ability to convene top-notch leaders, innovators, and broad thinkers (read: nonexperts) around the world's most challenging health problems. The strategy gets results. One gathering that focused on malnutrition in the developing world led to the formation of the Global Alliance for Improved Nutrition, a partnership between the public and private sectors — thanks to the Gates Foundation's $50 million commitment.

"We're convening terrific people and asking them to become think tanks for us, to try to get their heads around what it's going to take to make a tuberculosis vaccine, for example," Klausner says. "We're asking them about developing diagnostics that are appropriate for the developing world. We're reaching out to the community and saying, 'What do you think the big problems are?' "

Klausner holds the same seemingly contradictory attitude toward the pursuit of global-health solutions that he had toward curing cancer at his last job. He's both optimistic and realistic, impatient and patient. In that way, he fits right in at the Gateses' creation.

"I really like the paradox that this foundation represents of taking on overwhelming problems and not being overwhelmed," Klausner says. "Of being audacious and remaining humble about how hard this is."

He prods the staff not to lose sight of the big picture when focusing on a particular project. "You don't think big by asking, 'What do you want to do next?' or 'What's the next trial? The next intervention? The next drug?' " he says. "A lot of thinking big is about imagination. It's about imagining the system that you wish already existed. It's about asking, 'What if there were no restrictions? Where do we want to be 10 years from now?' "

What's Going to Make a Difference?
At a recent staff meeting, Klausner sits at the head of a long conference table. He's compact, with salt-and-pepper hair and mustache and an open-collar gray shirt. Although he just moved to Seattle a few weeks ago (he spent the summer working out of the foundation's East Coast office, in Washington, DC), he kids with the staff — and they kid back — as though he's been here since the beginning.

Today's topic is HIV/AIDS in India. Although the incidence rate is around 1%, India has the second-highest number of HIV/AIDS cases, because it has a population of more than 1 billion, second only to South Africa's. The foundation didn't wait for a grant proposal to attack the problem. Instead, Sharon Stash, a program officer in HIV/AIDS and tuberculosis, has spent months researching possible solutions. She recently returned from India, where she met with government officials, health agencies, NGOs, and various companies.

The HIV/AIDS situation is precarious, she tells the staff, because about one-tenth of the population, mainly men, migrate for months at a time to work in the country's centrally located industrial cities, where HIV/AIDS happens to be more prevalent. When they return home, many of the men, now infected, take the disease with them, facilitating the spread of HIV/AIDS into the areas of the country with the fewest infections.

The lively discussion that follows addresses a number of key questions: What's the most effective way to focus on the greatest number of migrational workers? What's working on a small scale that could be carried out on a larger scale? Who are the potential partners? And, of course, how much should be invested?

Klausner is keen for more evidence and ideas for the next round of discussions on the project: An investment of this magnitude demands it. "He challenges us to think about what it's going to take to make a difference in that disease or condition," says Dr. Helene Gayle, director of the foundation's HIV/AIDS and tuberculosis program.

The Gates Foundation's overarching strategy is not to come up with temporary solutions. The goal, says Klausner, is to have a lasting effect. Of course, in the face of so much human suffering, the immediate debate over treatment versus prevention isn't an easy one; it never has been. Imagine that it's 50 years ago, he says, and the foe is polio.

"You could invest in thousands and thousands of iron lungs, which in many ways would be the right thing to do as a doctor," he says. "You must react to individual suffering. But the reality is that the investment you would want to make in the 1950s would be to develop a vaccine. The iron lungs wouldn't be the answer."

One of the most difficult challenges in global health today is coming up with a vaccine for malaria. Researchers have been trying in vain for years to figure out how to stop the complex and tenacious parasite, which manages to elude the body's immune system. Their work has also been hampered by a lack of funding. The major drug companies are reluctant to pour millions of dollars into creating a drug for Third World countries that could not afford to buy it.

The Gates Foundation speeds up the development process by identifying the most promising and least funded candidates and by funding multiple trials. With a $50 million grant from the foundation, the Malaria Vaccine Initiative, based in Rockville, Maryland, is sponsoring ongoing trials on four different candidates, with a fifth on the way. One, dubbed MSP-1, had been in the works for 15 years, but the funding for field trials wasn't readily available. "I'm not sure when we would have had the resources to do it," says physician and lieutenant colonel Gray Heppner, who oversees malaria-vaccine development at the Walter Reed Army Institute of Research. "An important concept would have been lost."

Maybe MSP-1 will prove to be the vaccine that the world has been waiting for. More than likely, however, it's another important piece of the puzzle, another stone in the bridge between research and the real world, another significant advance that brings the Gates Foundation closer to defeating malaria. And maybe that will be enough to mobilize other researchers and donors around Third World health crises. "It's really my goal for people in this country and elsewhere to think that global health is the most exciting and important thing to work on," Klausner says. "I want to stimulate the creativity of the world toward these problems."

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Venture Philosophy
The Bill & Melinda Gates Foundation is a far cry from a traditional checkbook philanthropy. Instead of more or less throwing money at complex global-health problems and walking away, the foundation's staff has a highly interactive approach, from the approval process all the way through the execution of the grant. Much like venture-capital funding, a grant from the Gates Foundation is an investment — in a new method of diagnosing a disease in the Third World, an experimental vaccine, or improved access to an effective drug in a region without roads or hospitals.

Not surprisingly, Bill Gates is interested in seeing a return on his money. In global health, that return means a grant that has lasting value, one that acts as a catalyst for other investments, commitments, and research, and one that demonstrates an effective health-care technique so that local governments and health agencies will be willing to adopt it.

The foundation takes a business-inspired approach to accountability that turns conventional grant making on its head. In its grants to Third World governments, the relationship is structured in such a way that the return on investment is built in. The grant is contingent on governments doing their part, whether that means providing enough nurses to administer care, agreeing to immunize a certain number of children, or increasing health-care spending. Other grants include regular milestones. If partners can't provide the Gates Foundation with the necessary evidence to prove that they are delivering what they promised, they risk losing their funding. Better accountability leads to better sustainability, ensuring the foundation that its impact isn't short-term. The solutions endure through the agencies and governments that provide health service after the grant is complete.

The message, says Dr. Richard Klausner, who directs the global-health program, is that this is a partnership, not a handout. "We're active partners," he says. "It's not just, 'Okay, you have the grant, and we'll read your annual report.' We're going to be actively and intellectually engaged. We'll also be helpful, and we'll give feedback about what's working and what's not. The process is very interactive."

Chuck Salter (csalter@fastcompany.com) is a Fast Company senior writer. Learn more about the Bill & Melinda Gates Foundation on the Web (www.gatesfoundation.org).

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