Warren Buffett announced on Wednesday that he is donating $ 4.1 billion of Berkshire Hathaway shares to five foundations – and that he is stepping down from his role as a trustee of the Bill & Melinda Gates Foundation, one of the biggest philanthropies in the world. Berkshire Hathaway CEO made the announcement as he shared the latest update on his charitable giving, while championing the pace at which he has donated his immense fortune. Now 90, Buffett says he’s halfway to his goal of giving up almost all of his net worth.
Buffett did not elaborate on why he resigned from the Gates Foundation, which has been the primary recipient of his donations for more than a decade. In his letter, the billionaire noted that his goals were “100% in sync” with the foundation, that he had been an “inactive director” and that he had resigned from “all other boards other than Berkshire Hathaway. “.
Buffett’s announcement comes less than two months after Bill and Melinda Gates announced their divorce and as Bill Gates faces a scrutiny of his past conduct at work and extramarital affairs. The focus of Buffett’s letter, however, seems to address how he approaches philanthropy in an era of intense criticism of the inequality of wealth and the power of billionaires. Buffett has generally defended his accumulation of wealth and seems to claim that the benefits of compound interest have justified his step-by-step approach to selling his stocks.
Meanwhile, the $ 4.1 billion donation is not necessarily surprising. The business mogul has been talking about giving away most of his wealth since at least 2006, when he announced he would donate most of his wealth to the Gates Foundation. Since then he has regularly made large donations of Berkshire Hathaway shares to the foundation, and in 2010 he worked with the Gates to establish the Giving Pledge, a public pact between the ultra-rich to donate at least half from their wealth to charity. Many billionaires, including MacKenzie Scott and Mark Zuckerberg, have since signed. Now that it’s been 15 years since his initial announcement to donate to the Gates Foundation, Buffett recognizes that philanthropy is complicated.
“The simplest thing in the world is to donate money that will never be of real use to you or your family. The donation is painless and may well lead to a better life for you and your children, ”Buffett wrote in the letter. “The second step of spending huge sums is more difficult, especially when the goal is to focus on critical issues that have long been difficult to overcome or even shake. “
But Buffett gives his money slower than some other billionaires. Scott, the ex-wife of Amazon CEO Jeff Bezos, announced earlier this month that she is donating $ 2.7 billion of her fortune to various causes. Overall, she has donated $ 8.5 billion in the past year; at the end of 2020, she was distributing $ 1 billion per month. Scott also diverged from other members of the ultrarich by giving his money directly to organizations, rather than through foundations. She also criticized the economy that allowed her wealth, which she called “systems in need of change.”
It’s a surprisingly different tone from Buffett, who noted on Wednesday that he made his fortune doing what he loved.
“Compound interest, a long trail, wonderful associates and our amazing country just worked their magic,” he wrote.
It should be noted that many billionaires, including Bezos and Laurene Powell Jobs, have not signed the Giving Pledge, and others have been slow to develop a clear and deliberate strategy for their philanthropy. Billionaires are also increasingly unpopular. Vox and Data for Progress polls earlier this year found that the American public was skeptical of billionaires being role models and frustrated with growing their wealth during the pandemic. New reports on how the rich are avoiding federal income taxes make these numbers even less sympathetic.
All of this means that the importance and momentum of billionaire philanthropy is only growing. Billionaires are becoming more numerous and more powerful, making charities more dependent on their funds and their detractors more worried about curbing the power of the ultrarich. This growing frustration with the wealthy and the way they use their money stands in stark contrast to what Buffett otherwise appears contented as he takes a step back from his roles.
“I’m an optimist,” Buffett wrote in conclusion. “While naysayers abound – as they have throughout my life – America’s best days are sure to come. What has happened here since 1776 is no historical coincidence.