Warren Buffett Gives It Away
Carol Loomis Fortune article on Buffett plan to donate most of his Berkshire fortune to charity
Warren Buffett Gives It Away
Author: Carol J. Loomis Published: July 10, 2006 Source: Fortune
Overview
Carol Loomis's 2006 Fortune article detailing Warren Buffett's revolutionary decision to begin donating most of his Berkshire Hathaway fortune during his lifetime, rather than at death.
The Announcement
Buffett told Loomis in spring 2006:
"Within months, he would begin to give away his Berkshire Hathaway fortune, then and now worth well over $40 billion."
The Giving Plan
85% to Five Foundations
| Recipient | Allocation |
|---|---|
| Bill & Melinda Gates Foundation | ~83% (6/7 of gifts) |
| Susan Thompson Buffett Foundation | ~8% |
| Howard Buffett Foundation | ~3% |
| Susan Buffett Foundation | ~3% |
| Peter Buffett Foundation | ~3% |
Mechanics
- Starting 2006: 602,500 Berkshire B shares
- Annual decline: 5% per year
- Condition: Gates Foundation must have at least one Gates active
- Spending requirement: Foundation must spend dollar amount of Buffett's gifts annually
Historical Context
Buffett's gift dwarfed previous philanthropy:
| Philanthropist | Years | Amount | Current $ |
|---|---|---|---|
| Andrew Carnegie | 1902-1919 | $350M | $7.2B |
| John D. Rockefeller | 1889-1937 | $530M | $7.1B |
| Rockefeller Jr. | 1927-1960 | $475M | $5.5B |
| Buffett | 2006+ | $37B+ (at time) | $37B+ |
Buffett's Rationale
"I know what I want to do, and it makes sense to get going."
He rejected the idea of waiting until death:
- Wanted to see the impact during his lifetime
- Wanted to set an example for wealthy people
- Wanted to avoid "tainted" wealth perpetuation
Connection to Gates
Buffett and Bill Gates became close friends in 1991. Gates credits Buffett with having "inspired" their thinking about giving money back to society.
Key Quote
"The generosity and trust Warren has shown is incredible." — Bill Gates
Related Concepts
Source
Carol Loomis, Fortune, July 10, 2006.