Warren Buffett, The Billionaire Investor Gives Away His Fortune
Category : Women Business, Women Personality
The world has watched with admiration as Warren Buffett, the legendary investor, has made his fortune over the years. Now they can watch the second richest person in the world join forces with the richest to give it away.
This weekend seems surprising at first that the world’s second richest man, the investor Warren Buffett, plans to donate $31bn of his $44bn fortune to the Bill and Melinda Gates charitable foundation, established by the only man who outranks him in riches created by the founder of Microsoft.
Combined with the foundation’s existing $35bn assets, and Mr Gates’ own pledge to donate most of his remaining personal wealth, estimated at $50bn, the total will surpass even in real terms the best known philanthropists of modern history, Andrew Carnegie, John D Rockefeller and Henry Ford.
Buffett is content simply to provide a boost to the established work of the Gates Foundation in health and education in poorer countries with special respect for Gates. The decision to donate to an already existing foundation means that he has passed up the opportunity to be memorialised directly by edifices and institutions in his own name. Buffett, widely regarded as the world’s most successful investor – who had previously said his fortune would go to charity after his death – changed his mind and decided to give it away now.
Indicating that the very rich prefer to put their trust in others of their ilk – those who know the temptations and burdens of limitless spending power at first hand, rather than those who merely flutter around them hoping the gold dust will rub off.
Business logic would question whether doubling the size of an organisation will necessarily double its effectiveness. “I have watched the Gates Foundation for a number of years, I think in their field, I would be amazed if results diminished proportional to capital,” Buffett said at a news conference on Monday.
Bill Gates had long been intending to give away 95 per cent of his wealth before he died. “A very rich person,†as Warren Buffett put it, “should leave his kids enough to do anything, but not enough to do nothing.†Gates had always assumed that he would wait until he had retired to begin the redistribution of his wealth. But then, in 1994, his mother Mary Gates died of breast cancer.
They will have contributed more to alleviate poverty and disease than the UN’s principal development arm. Between them they will have given a sum amounting to about a third of the entire official UK contribution. When both men’s contributions have been fully disbursed into the fund, rise to well over $3 billion in today’s money, of which about three quarters is currently directed towards international assistance to the very poorest in the world.
For comparison, Unesco, the United Nations Educational, Scientific and Cultural Organisation, distributes about $700 million. In Britain, the Department for International Development channelled about £4.2 billion in aid to less developed countries.
Private philanthropy often works best when concentrating resources on areas ne-glected by governments. Ruth Levine, senior fellow at the Center for Global Development in Washington DC, says: “The nature of foundation resources is that they are flexible and can be committed over a long period without the same time without the political need to show results.”
Gates and Buffett now became close, despite a 25-year age gap and very different business styles. Both believe in philanthropic duty, and the dangers of leaving too much cash to their heirs. This marriage of fortunes is a meeting of like minds, based on an experience of wealth few others can share.
Buffet charity goft came weeks after Gates signalled he would soon give up daily duties as head of Microsoft in favour of his foundation, famous for work in the developing world including on HIV/Aids and for United States education initiatives. It’s good that Gates is leaving Microsoft, for he has much to do — and there is too much that needs doing to let even a dollar of Buffett’s generosity go to waste.
“The Buffett gift is astonishing, and given that the Gates Foundation already had 30-billion, you add another 31 to that and you have something that is of an extraordinary scale,” said Kathleen McCarthy, director of the Centre on Philanthropy and Civil Society at City University, New York.
The Bill and Melinda Gates Foundation, with assets of $29.1 billion, focuses on world health, poverty, education and increasing the access to technology both at American public libraries and in developing nations. The foundation distributed $1.36 billion last year and will be able to double its annual giving when Buffett’s money begins arriving next month. In fact, it will have to, because the legendary investor is insisting that each donation from his estate be spent in the year it is delivered, not simply added to the Gates foundation assets.
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