I was saddened to learn of the death of William Gates, Sr., recently. He had a significant impact on Nonprofits Insurance Alliance and on me.
I had the privilege of spending an hour with him about 20 years ago when he was nearly single-handedly managing the Gates Foundation. I have told the story of that meeting and subsequent events many times, and every time, I end up shaking my head wondering how that really happened in just that way.
In the late 1990s, my board chair at the time came into a meeting waving a magazine article about the nascent Gates Foundation, saying he was certain that Bill Gates would want to know about us. At 10 years old, Nonprofits Insurance Alliance of California (NIAC), a nonprofit insurance carrier, was still tiny with 2,000 nonprofit members and $7 million in equity, but we hoped to expand the model into other states and needed $10 million in capital to do it. My office was already papered with rejections from other foundations that scoffed at our idea of investing in the expansion of nonprofits’ own insurance company. To appease my board chair, I wrote a letter to Mr. Gates.
Mr. Gates, Sr., not only responded to my letter, but he invited me to Seattle to spend an hour pitching this idea to him. The meeting in Seattle coincided with an insurance trade association meeting I was also attending. On my way out of the building to meet with Mr. Gates, one of the other insurance company CEOs asked me if I was looking forward to going shopping. He, of course, confused me for one of the 100 female spouses of the other CEOs, all men, who were attending the event. When I told him I was one of the CEOs and was going to meet with Mr. Gates to ask him for money to expand our insurance company for nonprofits, the CEO immediately dismissed that as a crazy notion. And then he turned and walked away. I think he was honestly having difficulty figuring out which was more disturbing: the presence of a female CEO or the fact that I had a meeting with Mr. Gates!
Even though the meeting was set up by Mr. Gates, Sr., I confess to being somewhat shocked when he came to the reception area of his Seattle law office to greet me. He was much taller than I had imagined, but his warm handshake and kind eyes and manner immediately put me at ease. During our conversation he asked pointed questions that surprised me with their depth of understanding of what it takes to set up an insurance company. After my pitch he explained to me that he had been working with some folks for some time to start a risk retention group for attorneys, similar to what we hoped to do in our expansion for nonprofits. He said they had been unsuccessful in that effort, and he admired what we had already accomplished on behalf of nonprofits in California. I left him with the business plan I had prepared and walked out of his office with so much hope. The meeting had gone as well as I could ever have hoped.
About three weeks later, I got a rejection from the foundation. At first, I was devastated. Then, the more I thought about it, the more I felt like I needed to write one more letter. I wrote back to Mr. Gates and included the following:
Foundations talk these days about the importance of leveraging charitable dollars and helping nonprofits create self-sustaining operations. There is a lot of talk, but few of these opportunities get funded by the conservative foundation world. I had renewed hope when I left our meeting that the Gates Foundation would be different… There are so many problems that we cannot solve. It seems irresponsible to fail to solve one that we can.
I then asked if he would tell how I had failed to make the case.
A few weeks later I received a call letting me know that Mr. Gates, Sr., really wanted to fund our initiative, but he needed to get some one-on-one time with his son to provide more details about our effort. The woman on the call asked me if I could wait for a few more weeks for an answer. I didn’t say it, but I was thinking that they could take all the time they needed. Because, honestly, if I couldn’t get them on board with this idea, I was out of options.
Remember that board chair I mentioned at the beginning who suggested I write to Mr. Gates? Well, that wasn’t his first bright idea. Years before that in the early 1990s, he insisted that Warren Buffett would just love to know about NIAC, which at the time probably wrote about $2 million in premium and had even less capital. At first, I resisted, and then realized it was easier just to write the letter than to argue with my board chair. (Those of you who have had board chairs know exactly what I mean!)
To my surprise, Warren Buffett wrote back to me. His comments made it clear that he had read the annual report I included with my letter. We then exchanged letters once a year around our annual report for many more years. One year in my annual message, I mentioned that we would continue as a company to have “a head for insurance, and a heart for nonprofits.” Mr. Buffett pointed out in his letter to me that that would make a good byline. We have used it as such ever since.
A short while later, I received another call from someone who was assisting Mr. Gates. She told me that we were to receive a grant of $5 million from the foundation and she wanted to tell me a story about how that decision came about. As it turns out, Bill Gates and Warren Buffett were on an airplane together and Bill took the opportunity to ask Warren about the potential investment in nonprofits’ own insurance company. As the story goes, Warren indicated to Bill that he had been reviewing our annual reports and financials for years and recommended that the Gates foundation make the investment. The rest is history! The David and Lucille Packard Foundation went on to match the $5 million about a year later.
About 10 years after we launched our successful expansion into 31 more states, I sent a copy of our annual report and a note of thanks to Mr. Gates, Sr. He sent a kind note of congratulations to me, and, remembering how this all came about, copied Bill and Melinda Gates and Warren Buffett.
Yet again, I am shaking my head as I write this. Nonprofits Insurance Alliance now insures 21,000 nonprofits across the country. We are 501(c)(3) nonprofits with $650 million in assets and we expect to grow by nearly 20% this year as commercial insurance companies once again turn their backs on nonprofits. This was just one small bit of magic Bill Gates, Sr., helped bring about in his long and distinguished life.