Billionaire Warren Buffett has pledged an additional $3 billion of shares in his Berkshire Hathaway Inc. to his three children’s foundations.
Buffett committed the majority of his wealth in 2006 to the Bill & Melinda Gates Foundation. At that time, he also made commitments to charities established by his three children --the Howard G. Buffett Foundation, the Sherwood Foundation and the NoVo Foundation -- and by his late wife.
“I knew you would apply your considerable brains and energies in order to make the most of the funds from my gift,” Buffett, who turned 82 today, said to his children in a letter posted on the website of Omaha, Nebraska-based Berkshire. “However, you have exceeded my high expectations.”
Buffett has promoted philanthropy that addresses society’s toughest challenges as a way for wealthy individuals to show gratitude for their opportunities and shield themselves from the burdens of having too much money. He created the Giving Pledge with Microsoft Corp. co-founder Bill Gates in 2010 to enlist billionaires to donate at least half their wealth to charity.
“Intelligent charity, big-time charity should tackle things where it’ll fail,” Buffett said last year at a press conference in Bangalore, India. “If you succeed in everything you’re doing in charity, you’re attempting things that are too easy.”
Buffett’s latest pledge doubles the number of Class B shares committed to his children’s foundations to 24.4 million each. The shares slipped 0.4 percent to $84.19 at 2:41 p.m. in New York.
Each foundation will get about 1.2 million shares in July with that amount decreasing 5 percent a year for future installments, Buffett said in the letter.
“I would expect the value of the annual distribution to average more than $100 million, though it will vary substantially from year to year,” Buffett wrote. “I’m confident you will use the money wisely, each in your own way.”
Buffett pledged 10 million Class B Berkshire shares to the Gates Foundation in 2006, worth about $30.7 billion at the time. In a letter to Gates and his wife Melinda, who created the organization, Buffett said he would start with a gift of 500,000 Berkshire shares that year. Each subsequent year, he said he’d give away 5 percent from what remains of the 10 million-share pledge. The stock subsequently had a 50-to-1 split.
The bequest has helped fund the foundation’s work combating poverty and disease globally, as well as U.S. education initiatives.
The charity run by Howard Buffett, a farmer and Berkshire board member, has aided subsistence growers in Central America and Africa. Buffett’s daughter, Susan, focuses her Sherwood Foundation on causes in Omaha and early childhood education in the U.S. She is a board member of Girls Inc., which promotes economic literacy and healthy lifestyles.
Peter Buffett, an Emmy Award-winning musician, has underwritten efforts to reduce violence against women and girls through the NoVo Foundation.
Buffett, who built Berkshire over four decades from a failing textile maker into a firm valued at more than $200 billion, holds 350,000 of the company’s outstanding Class A shares. The stake comprises the majority of his estimated $45 billion fortune. Each Class A share can be converted into 1,500 B shares.