When Warren Buffet, the world’s second richest man, announced his charitable gift on Monday, even more shocking than the amount involved ($31 billion) was the fact that the recipient was Bill Gates, the world’s richest man. And, I suspect I was not alone in wondering:Why not his children? He has 3: Susan, Howard, and Peter. Why didn’t he leave those billions in a charitable trust for them to manage? By all accounts they inherited his brain; though, alas, not his wealth.
Why the Bill & Melinda Gates Foundation? After all, he could have spread this money amongst several worthy foundations. Now, just imagine the philanthropic envy the Carnegie and Rockefeller Foundations must be suffering – since, even adjusted for inflation, Buffet’s gift makes their philanthropic legacies look miserly. Or, he could have become a patron of the arts – emulating King Charles I of England, Lorenzo de’ Medici of Italy or Catherine the Great of Russia. And, he could have begun by fulfilling the pledges Alberto Vilar made to cultural institutions around the world that have since been dishonored by revelations that he was nothing more than an egomaniacal cultural poseur.
And, why now? He’s only 75 and looks quite healthy. Has he been diagnosed with terminal illness?
Well, as it happened, I did not have to wonder long. Because on Monday evening, Buffet answered all of these questions during a joint appearance with Bill and Melinda Gates on my favorite TV talk show, Charlie Rose. And here’s how he addressed my penny-wise thoughts:
Why not his children?
Evidently, Buffet’s children are living fulfilled and zealously-private lives. And, like him, they claim to have no interest in or talent for the high-profile philanthropy that managing and giving away so many billions would necessarily entail. More to the point, however, Buffet said that he’s not leaving them the bulk of his fortune because:
I just wanted to leave them enough so that they could do whatever they wanted to do but not enough to do nothing.
He then added that his children share his cynical attitude towards inherited wealth; explaining that:
…dynastic wealth – the idea that many generations of children should be able to go without doing a thing if they wish – simply because they came from the right womb [members of the lucky sperm club] strikes me as flying in the face of what this country is about. We believe in a meritocracy and equality of opportunity….
And, in the FORTUNE article heralding his historic announcement, Buffet said that:
…I would argue that when your kids have all the advantages anyway, in terms of how they grow up and the opportunities they have for education, including what they learn at home – I would say it’s neither right nor rational to be flooding them with money.
Egalitarian and altruistic thoughts that are, nevertheless, difficult to reconcile with the fact that Buffet has actually funded billion-dollar foundations for each of his children. And, even though he seems convinced that they are “giving money back to society – just where Susie and I thought it should go”, I do wonder whether they’re only giving pennies on the dollar and living the life of overpaid corporate CEO’s like so many directors of charitable foundations do. (Ah cynicism….)
Why the Bill & Melinda Foundation?
I wanted the money to be used effectively….I looked at a lot of foundations and there is a number that I admire but there’s none that bring the class in my view as the Bill & Melinda Gates Foundation….They really have looked at the world without regard to gender, color, religion, geography and they said “how can we do the most good for the most people….
Why now?
It seems to have everything to do with the death of his wife and soul-mate Susie two years ago:
Well it’s something I’ve always planned, my wife Susie and I had planned that whatever I made would go back to society and originally I thought she would outlive me and that she’d make the big decision on it, the manner, but since her death I had to rethink the best way to get the money into society and have it used in the most effective way and I had a solution staring me in the face…..I’d seen Bill & Melinda do what they do with their foundation, they’ve done it with their own money, they’ve poured themselves into it, their decisions are great, their goals are similar to mine, so the time is now.
All things considered, I think this is probably the smartest investment decision ever made by this savviest investor in the world. Because, with twice as much money to invest in childhood education and public health around the world (giving 3 instead of 1.5 billion dollars annually), the Bill & Melinda Gates Foundation will be able to improve the lives of many more children who are bound to make contributions to mankind that will provide immeasurable returns in perpetuity.
Indeed, to get a sense of how well the Gates appreciate this historic gift and its potential, here’s how Bill – who announced just days ago that he plans to retire in 2008 from Microsoft to Co-Chair his foundation full-time – described his thoughts on Buffet’s confidence in them to Charlie Rose:
It’s a huge responsibility…if you make a mistake with your own money you don’t feel as bad as if it were someone else’s. But we are now even more intent on doing it right….With advances in medicine and other things we can do to relieve poverty we’ve been making good progress and with doubling of resources we think our impact can more than double.
NOTE: When asked by Carol J Loomis, FORTUNE editor-at-large, “Are you ill?” Buffet replied:
No, absolutely not. I feel terrific, and when I had my last physical, in October, my doctor gave me a clean bill of health.
Click here to read more about the Bill & Melinda Gates Foundati
on.
ENDNOTE: Here’s a chart which puts my mocking reference above to America’s robber-baron philanthropists into proper context.
However, I feel obliged to note that whatever one thinks about America (read the article below on President Bush’s Austrian summit to see how resentful and distorted those thoughts can be), it is easily the most charitable nation in the world. And, though the American government is often criticized for not giving enough to international organizations (and rightly so), invariably overlooked is the fact that private American foundations more than compensate for any shortcomings in this respect.
For example, of the 3 billion the Bill & Melinda Gates Foundation will give next year, 60% will be dedicated to helping people in poor countries around the world.
Readers of this weblog know well that I have been unsparing in chronicling America’s faults. But when it comes to domestic and international charity, I challenge anyone to cite a more generous nation…..
But if you doubt my word, consider the following excerpt from an analysis of Giving generously, the American way published just yesterday in the London Times:
The Gates/Buffett annual outlays should, when both men’s contributions have been fully disbursed into the fund, rise to well over $3 billion in today’s money, of which about three quarters is currently directed towards international assistance to the very poorest in the world.
For comparison, Unesco, the United Nations Educational, Scientific and Cultural Organisation, distributes about $700 million. In Britain, the Department for International Development channelled about £4.2 billion in aid to less developed countries.
Two American philanthropists alone, in other words, will have contributed more to alleviate poverty and disease than the UN’s principal development arm. Between them they will have given a sum amounting to about a third of the entire official UK contribution.
No other nation on earth has the capacity to produce individuals with the wherewithal and the motivation to extend such generosity.
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Thank you Mr Buffet. Thank you Bill and Melinda Gates….
Warren Buffet, Bill Gates, Bill & Melinda Gates Foundation, philanthropy and charitable gifts
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