Key Points
- Warren Buffett will donate most of his wealth to a new charity run by his children.
- This breaks his history of donating to the Bill & Melinda Gates Foundation.
- The new foundation will be one of the world’s largest upon Buffett’s passing.
- The Gates Foundation will not receive any further donations from Buffett’s estate.
- Buffett’s children will decide how the new foundation allocates its funds.
Berkshire Hathaway CEO Warren Buffett announced on Friday that he intends to allocate the majority of his wealth to a newly established foundation managed by his three children upon his death. This marks a significant shift from his longstanding philanthropic partnership with the Bill & Melinda Gates Foundation.
Buffett, who will turn 94 in August, confirmed to The Wall Street Journal that he owns $130 billion worth of Berkshire Hathaway stock and intends for his children, Susie, Howard, and Peter, to manage the new organisation. This foundation will become one of the world’s largest philanthropies upon his passing, potentially surpassing the Gates Foundation’s $75 billion endowment.
Breaking Ties with Gates Foundation
In a significant revelation, Buffett stated that the Gates Foundation would no longer be a recipient of his estate’s wealth.
“The Gates Foundation has no money coming after my death,” he declared during the interview.
Over the past two decades, Buffett has donated around $43 billion to the Gates Foundation, including a $4 billion gift announced on Friday morning.
Also read: Melinda Gates To Resign from Gates Foundation
Warren Buffett’s relationship with the Gates Foundation began in 2006 when he committed to making annual donations to it and four family-run charities. In 2010, he co-launched the Giving Pledge with Bill and Melinda Gates, encouraging billionaires to donate at least half of their fortunes to charity. His donations were structured to ensure that 5 per cent of his Berkshire shares were given to the Gates Foundation each year, allowing him to maintain his stake in the company until his death.
Buffett’s pledge came with specific conditions, including the requirement that either Bill or Melinda Gates remain actively involved in the foundation and that his contributions enable the foundation to spend at least 5 per cent of its endowment annually. He resigned as a trustee of the Gates Foundation in 2021, and Melinda Gates later stepped down from the foundation.
Gratitude and Future Focus
Mark Suzman, CEO of the Gates Foundation, acknowledged Warren Buffett’s “invaluable role” in shaping their global health, agricultural development, and gender equity efforts in Africa and South Asia.
He expressed deep appreciation for Buffett’s recent gift and overall contributions, stating, “We are deeply grateful for his most recent gift and contributions.”
The Gates Foundation, which allocated $7.7 billion to various projects last year, focuses on global health, agricultural development, and promoting gender equity in Africa and South Asia.
The new foundation led by Warren Buffett’s children is poised to become one of the world’s largest philanthropies, potentially rivalling the Novo Nordisk Foundation, which had $108 billion as of 2022. This new entity will eclipse other major charities, including the $75 billion Gates Foundation and the $16 billion Ford Foundation, enabling it to fund billions of dollars in projects annually.
Warren Buffett has not mandated specific causes for his children to support through the foundation. Both Susie and Howard are members of the Berkshire board.
Buffett expressed his philanthropic philosophy, stating, “It should be used to help the people that haven’t been as lucky as we have been. There’s eight billion people in the world, and me and my kids, we’ve been in the luckiest 100th of 1 per cent or something. There are lots of ways to help people.”
