Buffett Counts on Zuckerberg to Spread Charity GoalKelly Gilblom
Warren Buffett, the second-richest person in the U.S., made his largest single charitable contribution with a gift of $2.1 billion to the Bill and Melinda Gates Foundation as he seeks to encourage giving by the wealthy.
The chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc. gave 16.6 million Class B shares yesterday in an annual gift to the foundation, where he is a trustee, according to a regulatory filing today. The donation beat last year’s record gift of $2 billion, when he gave 17.5 million shares. The stock has gained 8.4 percent this year to $128.49 as of 4 p.m. in New York.
Buffett, 83, has urged the ultra-wealthy to give away more money. He and Gates helped found the Giving Pledge, which asks billionaires including Mark Zuckerberg, the CEO of social media giant Facebook Inc., to donate the majority of their wealth to charity. More than 120 have agreed.
“Now we’re starting to get a few members from outside the United States, as well,” Buffett said June 9 at the Edison Electric Institute annual convention in Las Vegas. “It can’t be a bad thing and I think it will turn out to be quite a good thing.”
The investor’s wealth soared this year to more than $65 billion before donations that were announced today to the Gates Foundation and other charities. Bill Gates, the co-founder of Microsoft Corp., is the world’s richest man according to the Bloomberg Billionaires Index, a daily ranking of the wealthiest people.
‘Changing the Norm’
Buffett said he asks those who take the Giving Pledge to write letters about why they are donating, to inspire other rich people. He said it’s important for younger billionaires such as Zuckerberg, 30, to set an example.
Zuckerberg “has an audience that’s just totally different than what I would have,” Buffett said at the conference. “These letters will have an effect in changing the norm somewhat in this country.”
The Facebook CEO is among billionaires who don’t have a letter posted along with their names on the Giving Pledge website. Others use the opportunity to talk about the importance of philanthropy or personal interests.
“My choice was to ruin my son’s life by giving him money or giving 90-plus percent to charity,” wrote Manoj Bhargava, founder and CEO of Living Essentials LLC, maker of 5-hour Energy drinks. “Not much of a choice. Service to others seems the only intelligent choice for the use of wealth.”
Bhargava wrote that his money goes to more than 400 charities that work on cheaply desalinating water, reducing fossil fuel emissions and improving the health of the poor.
Most of Buffett’s donations go to the Gates Foundation, which focuses on hunger, poverty and education. He earmarked 10 million Class B shares for the Seattle-based charity in 2006 and gives 5 percent of the remaining total each year. The shares were split 50-1 in 2010.
The value of the annual gift fluctuates with Berkshire’s share price. Last year, he gave 17.5 million shares to the Gates Foundation, worth $2 billion. In 2012, his donation was about $1.5 billion.
In a 2006 letter Buffett said he expects the value of the shares to continue increasing in an “irregular but eventually substantial manner.” Since he wrote that, he’s given more than $15 billion of shares to the Gates Foundation, based on their price at the time they were turned over.
The billionaire also made gifts yesterday of 1.2 million Class B shares to each of his children’s philanthropies. They are the Howard G. Buffett Foundation, which works on solving conflicts and providing food to people in developing countries; the Sherwood Foundation, which targets education and social-justice issues in Nebraska; and the NoVo Foundation, a New York charity seeking to establish equality for women.
He donated 1.7 million Class B shares, worth more than $210 million, to the Susan Thompson Buffett Foundation. The education-focused charity is named for the billionaire’s first wife, who died in 2004.