Thread: Warren Buffett gives away his fortune

Warren Buffett gives away his fortune
FORTUNE EXCLUSIVE: The world's second richest man - who's now worth $44 billion - tells editor-at-large Carol Loomis he will start giving away 85% of his wealth in July - most of it to the Bill & Melinda Gates Foundation.
FORTUNE Magazine
By Carol J. Loomis, FORTUNE editor-at-large
June 25, 2006: 1:42 PM EDT

NEW YORK (FORTUNE Magazine) - We were sitting in a Manhattan living room on a spring afternoon, and Warren Buffett had a Cherry Coke in his hand as usual. But this unremarkable scene was about to take a surprising turn.

"Brace yourself," Buffett warned with a grin. He then described a momentous change in his thinking. Within months, he said, he would begin to give away his Berkshire Hathaway fortune, then and now worth well over $40 billion.

As part of his plan, Warren Buffett is sending letters to each of the five foundations that will be receiving his gifts. The letters may be found on Berkshire Hathaway's Web site. (See the letters)

This news was indeed stunning. Buffett, 75, has for decades said his wealth would go to philanthropy but has just as steadily indicated the handoff would be made at his death. Now he was revising the timetable.

"I know what I want to do," he said, "and it makes sense to get going." On that spring day his plan was uncertain in some of its details; today it is essentially complete. And it is typical Buffett: rational, original, breaking the mold of how extremely rich people donate money.

Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world's largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett's (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).

The Gateses credit Buffett, says Bill, with having "inspired" their thinking about giving money back to society. Their foundation's activities, internationally famous, are focused on world health -- fighting such diseases as malaria, HIV/AIDS, and tuberculosis -- and on improving U.S. libraries and high schools.

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.

Berkshire's price on the date of each gift will determine its dollar value. Were B shares, for example, to be $3,071 in July - that was their close on June 23 - Buffett's 2006 gift to the foundation, 500,000 shares, would be worth about $1.5 billion. With so much new money to handle, the foundation will be given two years to resize its operations. But it will then be required by the terms of Buffett's gift to annually spend the dollar amount of his contributions as well as those it is already making from its existing assets. At the moment, $1.5 billion would roughly double the foundation's yearly benefactions. But the $1.5 billion has little relevance to the value of Buffett's future gifts, since their amount will depend on the price of Berkshire's stock when they are made. If the stock rises yearly, on average, by even a modest amount - say, 6% - the gain will more than offset the annual 5% decline in the number of shares given. Under those circumstances, the value of Buffett's contributions will rise.

Buffett himself thinks that will happen. Or to state that proposition more directly: He believes the price of Berkshire, and with it the dollar size of the contributions, will trend upward - perhaps over time increasing substantially. The other foundation gifts that Buffett is making will also occur annually and start in July. At Berkshire's current price, the combined 2006 total of these gifts will be $315 million. The contributions will go to foundations headed by Buffett's three children, Susan, Howard, and Peter, and to the Susan Thompson Buffett Foundation.

This last foundation was for 40 years known simply as the Buffett Foundation and was recently renamed in honor of Buffett's late wife, Susie, who died in 2004, at 72, after a stroke. Her will bestows about $2.5 billion on the foundation, to which her husband's gifts will be added. The foundation has mainly focused on reproductive health, family planning, and pro-choice causes, and on preventing the spread of nuclear weapons. Counting the gifts to all five foundations, Buffett will gradually but sharply reduce his holdings of Berkshire (Charts) stock. He now owns close to 31% of the company-worth nearly $44 billion in late June - and that proportion will ultimately be cut to around 5%. Sticking to his long-term intentions, Buffett says the residual 5%, worth about $6.8 billion today, will in time go for philanthropy also, perhaps in his lifetime and, if not, at his death.

Because the value of Buffett's gifts are tied to a future, unknowable price of Berkshire, there is no way to put a total dollar value on them. But the number of shares earmarked to be given have a huge value today: $37 billion.

That alone would be the largest philanthropic gift in history. And if Buffett is right in thinking that Berkshire's price will trend upward, the eventual amount given could far exceed that figure.

http://money.cnn.com/2006/06/25/magazin ... 1.fortune/

Many years ago, in the "good old days", billionaires gave back to their community by building libraries, museums, concert halls, hospitals, medical research facilities, etc.

These days they fund foundations, which in turn fund "causes". These causes often turn out to be far left operations.

With the two richest men on the planet working together on this, it's time to become very, very afraid. These guys are going to make George Soros look like a thrift store operation.

Many years ago, in the "good old days", billionaires gave back to their community by building libraries, museums, concert halls, hospitals, medical research facilities, etc.

These days they fund foundations, which in turn fund "causes". These causes often turn out to be far left operations.

In which case Mr Buffoon can exit as he lived, self-serving and selfish.

Most of this money came from the US ... How much is going back to the US .... very very little ...

Money always fixes everything, right?? If that were so, we would have the most educated highly intelligent children anywhere. It's sad, most of the money winds up in hands of dicators in a lot of these African countries. They could stop malaria with a few thousand bucks worth of DDT, but hey, it might kill some birds....never mind the millions of people dying from it. We have lost all common sense.

Catholic charities, and others, go to Somalia and scoop up refugees...bring them back to the States and put them on Social Security. That's right...we are paying for all these refugees. While we wonder if Social Security will go bankrupt, then we should wonder no more, because they are putting every possible person they can, from other countries, on OUR Social Security system. WHY don't some of these Billionaires fund some of these costs?????? WHY??

Obviously the biggest handouts go to the biggest beggars. Special interest groups, third world victims, illegal aliens. But Americans don't scream loud enough.

You see who he's giving the bulk of it to, don't you?
Bill Gates..........another member of the Bilderberg Group

I would have toured the US in hunt for hard working people who are enduring hardship and give them the money, after all, they're the only honest ones left.

Good thinking Rockfish!

Some people must have money to literally throw away.

http://www.10news.com

Buffett Lunch Fetches $620,100
Money Goes To San Francisco Charity

POSTED: 8:11 am PDT June 30, 2006
UPDATED: 8:17 am PDT June 30, 2006

OMAHA, Neb. -- A lunch date with billionaire investor Warren Buffett is getting pricier.

Someone paid $620,100 in an online charity auction to dine with the Oracle of Omaha in New York.

In last year's auction, the winning bid was about $350,000.

Five individuals placed 29 bids in the eBay auction that ended Thursday night.

The winner of the auction was identified only by the eBay user name "fastisslow."

Proceeds from the auction go to the Glide Foundation, which provides social services to the poor and homeless in San Francisco.

The winning bidder will be able to take seven friends to lunch with Buffett, who is chairman and chief executive of Omaha-based Berkshire Hathaway Inc.