The Gates Foundation: Giving Away A Fortune

Scott Pelley Finds Out How And Why Bill And Melinda Gates Are Giving Away Their Money

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It was back in 1993 on a vacation in Africa that they began to think about giving away their money.

"Well, if you have money, what are you gonna do with it? You can spend it on yourself, you can have, you know, thousands of people holding fans and cooling you off. You can build pyramids and things. You know, I sometimes order two cheeseburgers instead of one. But we didn't have any consumption ideas. And if you don't think it's a favor to your kids to have them start with gigantic wealth, then you've gotta pick a cause," Bill Gates explained.

"You don't consider it to be a favor to your kids?" Pelley asked. "To give them enormous wealth?"

"No," Melinda Gates said. "They should go on to pursue whatever it is they want to do in life and not feel cheated by that by being given something, given a whole lot of wealth. They would never go out and figure out who they are and what their potential is."

Melinda Gates told Pelley they told their kids that they are giving most of the money away and that their children are okay with it.

"Yes, they reach different ages, they may ask us again, 'Tell me again, What? Why?'" Bill Gates added.

The Gates' kids will still be massively wealthy. But their parents have already given roughly $30 billion to the foundation and they told us they'll give ninety percent of their money away. Add to that the contribution of the Gates' close friend, Warren Buffett, who has committed another $30 billion to the foundation.

This past summer, the Gates and Buffett challenged billionaires to give half of their wealth to the charity of their choice. So far 40 have signed the pledge.

"The foundation, you, have made certain choices about what you're going to fund. And some people might ask, 'Why not drop 30 billion dollars on a cure for cancer,' for example," Pelley remarked.

"Well, there's a huge market for cancer drugs. And there's dozens of pharmaceutical companies that spend tens of billions on those drugs. In malaria, when we announced a grant for $50 million, we became the biggest private funders. And so, the fact that it kills over a million children a year and yet has almost no money given to it, you know, that struck us as very strange. But it became the thing we saw, 'Okay, this will be unique. We'll take the diseases of the poor, where there's no market and we'll get the best scientists working on those diseases,'" Bill Gates explained.

"You're trying to find the places where the money will have the most leverage, how you can save the most lives for the dollar, so to speak," Pelley remarked.

"Right. And transform the societies," Gates replied.

Another society they want to transform is America's, particularly through the schools. They've pledged nearly one quarter of all the foundation money to American students. And we followed Melinda Gates to the Friendship Collegiate Academy High School in Washington D.C.

"I wonder what you think is the most alarming thing about American education?" Pelley asked.

"I think it's most alarming that we're only preparing a third of the kids to go on to college. That's a frightening thing for our democracy to say a third of kids are prepared to go," she replied.

If only a third of high school seniors are academically prepared to go to college, the Gates believe that a revolution in teaching can go a long way toward pushing that up to 80 percent. They're funding research to figure out what makes great teachers great.