Warren Buffett, the billionaire who committed more than 99 percent of his wealth to charity, said he’s giving it away because he benefited from a U.S. economy that produces “wildly capricious” results.
Buffett’s 2006 pledge to give most of his assets from building Berkshire Hathaway Inc. would leave his lifestyle “untouched,” he said today in a letter on Fortune’s website. The statement was part of a push by Buffett and Microsoft Corp. co-founder Bill Gates to inspire other U.S. billionaires to pledge at least half of their fortunes to charity.
“My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well,” Buffett wrote. “I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate’s distribution of long straws is wildly capricious.”
Buffett, 79, and Gates, 54, started a drive called “The Giving Pledge” to encourage high-profile promises, according to the initiative’s website. The two men and Gates’s wife Melinda Gates have been assembling billionaires at private meetings to drum up support for their challenge.
Buffett said he is asking “hundreds of rich Americans to pledge at least 50 percent of their wealth to charity.” He said 1 percent of his wealth is enough for him and his family, and “neither our happiness nor our well-being would be enhanced” by keeping more.
The Giving Pledge has attracted the interest of Eli Broad and Edythe Broad, John Morgridge and Tashia Morgridge, John Doerr and Ann Doerr, and H.F. “Gerry” Lenfest and Marguerite Lenfest, who are expected to be part of a charter membership class announced later this year, said Patty Stonesifer, who has advised on the initiative. The goal over time is that a majority of billionaires would agree to a similar standard, said Stonesifer, the former chief executive officer of the Bill & Melinda Gates Foundation in an interview today.
Eli Broad is former chairman of insurer SunAmerica Inc. John Morgridge was chairman of Cisco Systems Inc. John Doerr is one of Amazon.com Inc.’s first investors. H.F. Lenfest’s cable company was swallowed by Comcast Corp.
‘The Giving Pledge’
The effort kicked off with a meeting in New York on May 5, 2009, that was organized by the Gateses, Fortune magazine reported, citing interviews with the couple and Buffett. The leaders of the initiative may have a minimum goal of about $600 billion in commitments, Fortune said, based on the calculation of half of the $1.2 trillion in net worth of the 400 richest individuals compiled by Forbes magazine.
“It would easily double or triple the amount of philanthropy in America,” said Melissa Berman, president of Rockefeller Philanthropy Advisors, a non-profit organization that has advised the Gates Foundation on the pledge initiative.
“If we would be able to get this influx for philanthropy from billionaires, it would inspire other Americans,” she said in an interview today. “And then we could really change what the world is like.”
Buffett’s fortune was estimated at $47 billion by Forbes in March, placing him third in the worldwide ranking behind telecommunications investor Carlos Slim and Gates, who is also a Berkshire director. Buffett, chairman of Berkshire, executed takeovers and stock picks to transform his firm over four decades from a failing textile mill into a seller of bricks, electric power and hurricane insurance with a market value of about $190 billion.
Buffett’s letter echoed comments he has made emphasizing the role of luck in amassing his fortune.
“My wealth has come from a combination of living in America, some lucky genes, and compound interest,” he wrote. “Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the U.S. were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.)”
Buffett collects a $100,000 annual salary at Omaha, Nebraska-based Berkshire and lives in the home he bought in 1958 for $31,500, according to a book by Buffett’s son Peter.
“I like having an expensive private plane, but owning a half-dozen homes would be a burden,” Buffett wrote. “Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.”
Buffett has pledged to donate the bulk of his fortune to the Gates Foundation, the world’s largest philanthropic organization, with goals including the reduction of poverty and disease and the improvement of U.S. education. Buffett also supports the Glide Foundation, a San Francisco soup kitchen, by offering to eat lunch with the highest bidder in an annual auction. This year’s event drew a winning bid of $2.63 million.
The idea to assemble a group of billionaire philanthropists to discuss strategies and encourage giving was Buffett’s, Fortune said. The first meeting was hosted by David Rockefeller and included George Soros, Oprah Winfrey and Michael Bloomberg, the mayor of New York. Bloomberg is the majority owner of Bloomberg LP, the parent of Bloomberg News.
A pledge of the majority of an individual’s fortune is “an understandable and quite reachable bar for the wealthiest --many will exceed it,” according to a document posted on The Giving Pledge website.
Those who take the pledge are invited to pick the causes that they fund. The effort will initially focus on U.S. billionaires and may expand to other countries.