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At first, Bill and Melinda focused their international giving on population control and reproductive health. But soon they learned that better health leads to smaller populations. In 1998, Bill Sr. came across a progress report from the International AIDS Vaccine Initiative, a small nonprofit organization, based in New York City, working to speed the search for a vaccine. In the margins, he wrote a note to Bill and Melinda: "I don't know what we can do about this. But if this isn't what philanthropy is for, I don't know what is." Bill sent back a one-word reply: "Agreed." And so the foundation issued its largest grant to date: $1.5 million.
Soon afterward, one of the foundation's advisers gave Bill a copy of a 1993 World Bank Development report. Today it reads like a blueprint for the Gates Foundation. Using just the kind of steely analysis that Bill loves, the 329-page document explained how many millions of people in poor countries die from diseases that already have cures. Then it listed the most cost-effective methods of preventing those deaths: from immunization to AIDS prevention to nutrition, all of which would become major investment areas for the foundation. Finally, he had found what every well-meaning billionaire wants: a formula to make a guaranteed difference. One weekend, Melinda and Bill pored over the report. "We could go down the list and see what was killing children around the world," says Melinda. "Very quickly, we came to the point that this was something we wanted to do."
And so, in 1999, the same year Bill became worth $100 billion (on paper) and one year into an epic antitrust suit brought against Microsoft by the U.S. government, they endowed the Bill & Melinda Gates Foundation with an initial $17 billion. They folded the old foundation into the new one and persuaded Bill Sr. to move out of his basement and into a real office. Patty Stonesifer, a former Microsoft executive who had been running the Gateses' library project, joined him to lead what was suddenly the biggest philanthropy in the country.
"When you write the check, you think, Hmm, that's a lot of zeros," Bill admitted to PEOPLE that year. But by then, he and Melinda had Jennifer, then 3, and Rory, just 7 months. And parenthood was changing them in ways they were just beginning to understand. "Melinda and I talked about the things we believed in for our own kids. You want them safe and healthy," he said at the time. "Jennifer wakes up at night, and I lie down to help her get back to sleep. She puts her feet on top of mine and watches to see if I'm awake. She's just a thrill."