The amazing relationship between the No. 1 and No. 2 wealthiest men in the world has led Warren Buffett to change his mind.
For years, he resisted giving away his vast fortune until his death. But today he announced that he would start giving it away now. Here's how:
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The Melinda and Bill Gates Foundation will receive 10 million Berkshire Hathaway B shares;
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The Susan Thompson Buffett Foundation, named after his late wife, will get a million B shares; and
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Each of his three children's foundations will received 350,000 B shares.
The gifts, 5% of which Buffett plans to give each July, would total $37 billion at today's prices for Berkshire Hathaway A and B stocks.
What fascinates me the most about this decision is the way Microsoft's Bill Gates may have influenced three key Buffett decisions:
- Give while still living. Possibly through his decision to step down from active management of Microsoft, Gates may have helped Buffett reach the conclusion that there is an inherent value in living to see the benefit of one's philanthropic contributions;
- Give most to Gates. Gates convinced Buffett that Gates would do a more effective job than Buffett's childrens' and his late wife's foundations of spending Buffett's wealth on socially beneficial causes; and
- Let someone else decide how to spend it. Most interestingly, Buffett decided that he was not the best person to decide how to give away his money. In so doing he showed some of the intent underlying his previous position to wait until his death to give away his wealth -- he felt he'd be better off making money than figuring out how to give it away.
I wonder whether Buffett's decision might sting his children a bit -- insofar as they may wonder whether Buffett would have preferred Gates as a son to his actual offspring.
Nevertheless, it does make me think what I would do if I had $37 billion to give away. What would you do?
I am neither long nor short shares of Microsoft or Berkshire Hathaway. For more about me, click here.
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Reader Comments (Page 1 of 1)
6-26-2006 @ 8:43AM
Sheila said...
I would love to have a dad like Mr. Buffett. My dad did not leave my mother anything when he died. She grew up during the depression and knew what proverty was. My mother lived comfortable but not rich. When she died last spring she had a house. I am now living in that house due to my financial situation. But not one time did I feel not loved or negelected. My mother was a very giving person who helped many people during her life. She left this example for her children as a lesson for us. If I were one of Mr. Buffetts children, I would be so proud of him. Its not like he is going to leave them without nothing. I will never have the opportunity in my lifetime to receive an estate as they will. So as far as Im concern they should not complain. They need to follow their dads footsteps. If you can make a great contribution to society, do it now..God Bless Him and Bill Gates...
6-26-2006 @ 3:00PM
Jerry Wood said...
this course of action has the Mormon leaders stamp of apporval? Aren't the LDS faithful required to give 10% of all their increase back to Salt Lake City?
6-26-2006 @ 4:09PM
W Baath said...
Congratulations Mr. Buffett!
What some people won't do to get a copy of Windows that works!
6-26-2006 @ 4:43PM
Joseph P. Fahey said...
Mr. Buffett's actions are only further confirmation of his ability to seize the most advantageous opportunities for his money and the money of others. Mr. Gates and his wife have done an exemplary job of creating and overseing their own foundation, no small task. Mr Buffet is wise to have The Gates Foundation as steward of his legacy.
JPF
6-26-2006 @ 5:16PM
Barbara said...
Warren Buffet, Bill & Melinda are amazing. I know their children will warmly embrace their most generous decisions. What a legacy!!!!