The world’s second-richest man, Warren
Buffett, has brought forward his plans to give away nearly all his money,
starting next month, with most of it going to the Bill and Melinda Gates
Foundation – giving that body extraordinary philanthropic power.
The $US30 billion Gates Foundation is
already the world’s biggest private charity. Over time, five-sixths of
Buffett’s $US44 billion fortune will be added to it with a first instalment of
about $US1.5 billion in July. And the eventual total will actually be greater,
thanks to the way the Sage of Omaha is organising it.
Buffett has always intended to give away
his money – but it was to have been after his death. Aside from extremely good
performance, his Berkshire Hathaway investment vehicle is famous for not giving
money to charity – Buffett says companies have no right to do that with
Buffett’s long-term plan with his wife,
Susie, was to give away their wealth through the Buffett Foundation set up 40
years ago, but the death of Susie two years ago changed that planning.
In a scoop given to Fortune‘s Carol Loomis (a friend and a director of the Buffett
Foundation), Buffett reveals a carefully staged giveaway. It starts with 602,500 Berkshire B shares next month, a
number that will be reduced by 5% each year, but Buffett expects the
value of Berkshire shares to rise by more than that annually. On Friday’s price, that initial parcel is
worth about $US1.8 billion.
The Gates Foundation receives five-sixths
of the shares and Buffett will join Bill and Melinda as directors. There are a
couple of interesting catches – the
donations only continue as long as either Bill or Melinda are involved in the
Foundation and they have to spend the money.
The remaining gifts are divided between the
Buffett Foundation and three others, each run by one of Buffett’s three