Megabucks for charity
OMAHA, Neb. – It might have been decided over a bridge game or after a board meeting, but the world’s two richest people are about to merge their considerable billions for philanthropy, as Warren Buffett turns to his friend Bill Gates for help in giving away a fortune.
The decision disclosed Sunday marked a jarring turnabout for the 75-year-old “Oracle of Omaha,” who had claimed for years that his $44 billion stock holdings would fund philanthropy after his death.
The gift – 10 million shares worth nearly $31 billion – will dramatically enrich the Bill & Melinda Gates Foundation, already the world’s biggest charitable foundation, considered a leader in international public health, particularly in the fight against HIV, malaria and tuberculosis. The Seattle-based organization formed seven years ago under the leadership of the Microsoft Corp. co-founder and his wife, Melinda, and has about $29 billion in assets.
“What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it?” Buffett told Fortune magazine for an interview announcing his plans. “Who wouldn’t select Tiger Woods to take his place in a high-stakes golf game? That’s how I feel about this decision about my money.”
Buffett had been expected to leave his vast holdings of Berkshire Hathaway Inc. stock largely to the Susan Thompson Buffett Foundation, begun by Buffett and his late wife. That foundation has given millions of dollars to hospitals, universities and teachers, as well as to Planned Parenthood and other abortion rights groups.
Berkshire’s chairman and CEO said he plans to give away 12,050,000 Class B shares of Berkshire stock to the foundations, but he will have to convert some of his 474,998 Class A shares to complete the gifts. One Class A share, which sold for $92,100 on Friday, can be converted into 30 Class B shares, which sold for $3,071 Friday.
Gates and Buffett have become friends in recent years, with Buffett introducing Gates to bridge and asking him to serve on the board of Berkshire Hathaway Inc. after Buffett’s wife died in July 2004.
Buffett was unavailable to comment Sunday. But letters outlining the gifts were posted on the company’s Web site, and Buffett explained his decision to a Fortune magazine editor, Carol Loomis. She has edited Buffett’s annual letter to shareholders for several years.
Buffett told Fortune that he decided to start giving his money away now because he has been impressed with Bill and Melinda Gates and the work they’ve done through their foundation. And he decided it would be easier to give to a large foundation instead of trying to expand his own foundation.
“It’s Buffett and Gates merging in a way for charitable purposes,” said Andy Kilpatrick, a stockbroker who wrote “Of Permanent Value, the Story of Warren Buffett.”
Buffett has long said limiting the spread of nuclear weapons is the greatest challenge facing mankind. And Kilpatrick said Buffett probably agrees with the Gates’ concerns about population control, disease and education.
In a statement Sunday, Bill and Melinda Gates applauded Buffett’s decision: “We are awed by our friend Warren Buffett’s decision to use his fortune to address the world’s most challenging inequities, and we are humbled that he has chosen to direct a large portion of it to the Bill & Melinda Gates Foundation.”