Buffett Gives $2.2 Billion to Charity That Embraces Failure

Exclusive Portraits Of Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett

Warren Buffett.

Photographer: Scott Eells/Bloomberg
  • Billionaire contributes 15 million class B Berkshire shares
  • Foundations run by children also receive stock donations

Warren Buffett donated about $2.2 billion of stock in his annual gift to the Bill & Melinda Gates Foundation, betting that risk takers at the group will make breakthroughs in global health and U.S. education even as they acknowledge that some efforts will be unsuccessful.

“Some of the projects we fund will fail,” the Gateses wrote in a message on their website. “We not only accept that, we expect it -- because we think an essential role of philanthropy is to make bets on promising solutions that governments and businesses can’t afford to make. As we learn which bets pay off, we have to adjust our strategies and share the results so everyone can benefit.”

Buffett, 85, contributed 15 million Class B shares of his Berkshire Hathaway Inc. stock to the foundation Wednesday, according to a regulatory filing Thursday. He made a pledge in 2006 to hand over a total that equates to 500 million shares, and each year he gives 5 percent of the remaining total.

Through last year, he donated more than $17 billion of stock to the foundation. The annual sums have often climbed because of gains in the share price.

‘Too Easy’

While he is known for looking for a margin of safety with Berkshire’s investments and often faults himself when his stock wagers sour, Buffett is more tolerant of bets going bad in philanthropy. “If you succeed in everything you’re doing in charity, you’re attempting things that are too easy,” the Berkshire chairman and chief executive officer said in 2011.

The Gates Foundation has donated more than $36 billion, including for projects that expand access to immunizations in developing countries and provide financial services to poor communities. Bill Gates, the 60-year-old co-founder of Microsoft Corp., has acknowledged it’s been more difficult to make advances in U.S. education than in improving mortality rates for children.

Buffett also donated 1.5 million shares Wednesday to the Susan Thompson Buffett Foundation, which is named after his first wife, who died in 2004. His three children’s foundations received 1.05 million shares each this week.

Howard Buffett, who is the billionaire’s eldest son and a farmer who has sought
to improve agriculture in conflict zones, has also promoted efforts that involve risk.

“I would say it’s a little bit like we’re willing to go with junk bonds rather than AAA stocks because the payoff is big,” he said in a 2013 interview with Bloomberg Television.

The Sherwood Foundation, led by the billionaire’s daughter Susan A. Buffett, targets social-justice issues in Nebraska. Peter Buffett’s NoVo Foundation focuses on establishing equality for women.

Berkshire Class B shares slipped 0.1 percent to $145.73 at 4:15 in New York.

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