Warren Buffett Donating $37 Billion to Gates Foundation

Warren Buffett is giving most of his money to Bill Gate’s world health philanthropy.

The world’s second-richest man, Warren Buffett, became one of the world’s biggest philanthropists Sunday with the announcement that he would bequeath the bulk of his roughly $44 billion fortune to the foundation established by billionaire Bill Gates and his wife. The decision to start giving next month through annual stock donations represents a stark reversal for the investment wizard, who for years had said his wealth would be pledged to philanthropies after his death.

Buffett’s gift will radically boost the resources of the Bill and Melinda Gates Foundation, which is already the world’s largest philanthropy with assets of more than $29 billion. Earlier this month, the world’s richest man and Microsoft Corp. co-founder decided to give up his daily duties at the software company in 2008 to spend more time at his foundation, which is considered a leader in international public health, particularly in the fight against HIV, malaria and tuberculosis. Gates also serves as a board member of Berkshire Hathaway Inc., Buffett’s investment conglomerate, and the men socialize regularly.

The 75-year-old Berkshire chairman and CEO had been expected to leave his vast holdings of Berkshire stock largely to the Susan Thompson Buffett Foundation, begun by Buffett and his late wife. That foundation has given millions of dollars to hospitals, universities and teachers, as well as to Planned Parenthood and other abortion rights groups.

Buffett said he plans to give away 12,050,000 Class B shares of Berkshire Hathaway stock to the foundations, but he will have to convert some of his 474,998 Class A shares to complete the gifts. One Class A share, which sold for $92,100 on Friday, can be converted into 30 Class B shares, which sold for $3,071 Friday. The gifts would be worth nearly $37 billion based on Friday’s closing share price.

[…]

Buffett told Fortune that he decided to start giving his money away now because he has been impressed with Bill and Melinda Gates and the work they’ve done through their foundation. And he decided it would be easier to give to a large foundation instead of trying to expand his own foundation. “What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it?” Buffett told the magazine. “Who wouldn’t select Tiger Woods to take his place in a high-stakes golf game? That’s how I feel about this decision about my money.”

More from the Fortune piece:

Buffett Gives it Away Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are “thrilled” by that and by knowing that Buffett’s money will allow the foundation to “both deepen and accelerate” its work. “The generosity and trust Warren has shown,” Gates adds, “is incredible.” Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares – starting with 602,500 in 2006 and then decreasing by 5% per year – to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair — Bill, now 50, or Melinda, 41 — is active in it.

[…]

I always had the idea that philanthropy was important today, but would be equally important in one year, ten years, 20 years, and the future generally.

And someone who was compounding money at a high rate, I thought, was the better party to be taking care of the philanthropy that was to be done 20 years out, while the people compounding at a lower rate should logically take care of the current philanthropy.

A staggering sum, indeed. Quite interesting that he’d give it to Gates’ foundation rather than his own, if nothing else but for name legacy purposes, but there’s something to be said for betting on a still-young Bill Gates. As a bonus, I’d certainly rather see the money used to help sick kids instead of abortion activism.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. DC Loser says:

    I’d like to see some comparisons of this with the debate about the estate tax.

  2. Rodney Dill says:

    He can either find someone to carry out his wishes (i.e. through his own foundation) or find someone already doing something very successfully along that line, which is what he has done. I think his finding someone capable and motivated as the Gates are is the best way to ensure his money is spent the way he wants after he is gone. Also since the Gates are already heavily investing their own money in this there is little chance that the money will be reappropriated to other purposes.

  3. James Joyner says:

    DCL: Well, if the estate tax took, say, $30 billion of Buffett’s wealth, it would be wasted by the federal government on pork barrel projects. This way, it’s invested by brilliant people for societal goods as defined by the guy whose money it was in the first place.

  4. DC Loser says:

    James, I don’t disagree with you on this. I made the point of philanthropic giving in previous discussions about the estate tax. That Gates and Buffet have committed to doing this is great, and no one can criticize them for having done so.

  5. Pug says:

    DCL: Well, if the estate tax took, say, $30 billion of Buffettâ??s wealth, it would be wasted by the federal government on pork barrel projects. This way, itâ??s invested by brilliant people for societal goods as defined by the guy whose money it was in the first place.

    This is a good point. So, instead of taking his $30 billion and wasting it on pork barrel projects, we can just borrow the $30 bill and waste it on pork barrel projects. Awesome.

  6. Esther A. Fiers says:

    Abortion activism–that is the first thing that perked my attention. What is Buffett’s real goal? Does he plan to excel the already record-high abortion rate in America today? How come the money could not have been donated to the Women’s Clinics all around the nation (who, I might add, have been the ones who have really helped teenage girls)? What kind of example is this to other philanthropists in the United States?
    Buffett, I doubt you will ever read this, but what if you had been aborted as a baby, or even Bill Gates? Where would the internet be, where would you be? I know your age limits the amount of abortions back then, but still, would you abort your own child? Think of the millions of girls everyday who have abortions without consulting their parents. Think of the guilt, the pain, the overwhelming responsibility of blame and shame. The compunction of abortion is a remorseful pain. I am an eighteen-year-old female, and I thank God everyday that I have never had to deal with that kind of pain.