Berkshire Hathaway Chair Warren Buffett on Sunday in a letter said he will annually donate to the Seattle-based Bill & Melinda Gates Foundation 5% of stock holdings currently valued at $30.7 billion. The initial donation, to be made in July, will total an estimated $1.54 billion. The conditions of the donation require that Bill or Melinda Gates continue active participation in their foundation. Buffett also will become a trustee of the Gates Foundation. The foundation has an endowment of $29 billion and to date has spent more than $10 billion, much of it on programs to fight HIV/AIDS and other global health concerns (Kaiser Daily HIV/AIDS Report, 6/27). The Wall Street Journal and New York Times on Wednesday published an editorial and an opinion piece related to Buffett's donation. These are summarized below.
Wall Street Journal: Buffett's planned donation to the Gates Foundation is an "act of jaw-dropping generosity" and "represents the lion's share" of his Berkshire Hathaway fortune, a Wall Street Journal editorial says. The Gates Foundation, which was founded 12 years ago and focuses primarily on education and public health, is young, but "what it lacks in experience, it more than makes up for in size," according to the editorial. Buffett is "clearly convinced" that the Gates Foundation is "a worthy beneficiary" of his fortune because the foundation "seems to have avoided the worst pitfalls of many other large, politically correct foundations," which have "become adjuncts of the welfare state," according to the editorial (Wall Street Journal, 6/28).
David Leonhart, New York Times: While Buffett could have used the money he donated to the Gates Foundation to form his own university or foundation, thus "engag[ing] in a little competitive philanthropy," he "made the point that giving away money should be more about results than ego," columnist Leonhardt writes in a Times opinion piece. Leonhardt adds that as Buffett spoke about his donation, he was outlining a "Buffett way of divesting," similar to the "kernels of wisdom" about investing that he has dispensed over the years. Leonhardt writes that Buffett "was essentially sketching out a few simple rules for giving money away," adding, "It's a good time for rules," as many foundations are "slowly, often fitfully, trying to do a better job measuring results, and the ones that do it right deserve support" (Leonhardt, New York Times, 6/28).
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