Warren Buffett Just Cut the Bill Gates Foundation From His Annual Donation for the First Time Since 2006. The Missing $4.5 Billion Goes to His Children’s Charities.
The Ford Foundation, The Hershey Trust, and The Hormel Foundation are just some of the charitable organizations created by company founders or shareholders of major corporations. There are others that don’t include company names. Right now, Warren Buffett, the former CEO of Berkshire Hathaway (BRKA 0.50%)(BRKB 0.48%), is funding his children’s charitable organizations by donating shares of the company he once ran. But the plan is a little different from what it was a few years ago, which may actually be a good outcome from unfortunate events.
Buffett removes the Bill Gates Foundation from the list
For years, Buffett had donated to the Bill Gates Foundation. That is the philanthropic organization created by Bill Gates, the former CEO of Microsoft (MSFT +2.70%). However, Bill Gates has been caught up in the Jeffrey Epstein scandal, and Buffett has been distancing himself from the retired technology CEO. That includes stopping Buffett’s regular annual donation of Berkshire Hathaway stock.
Image source: The Motley Fool.
Instead, Buffett has decided to give those shares to his children’s foundations, the Sherwood Foundation, the Howard G. Buffett Foundation, and the NoVo Foundation. He is also giving shares to the Susan Thompson Buffett Foundation, a charitable organization named after his late wife. The current plan is for Buffett to give all of his shares to these organizations by the end of 2034, or sooner if he passes away.
What’s notable about such charitable organizations is that they aren’t just giving money away. They normally have employees and boards of directors. So, in effect, Buffett is funding jobs, including for his children, grandchildren, and likely future generations beyond that. The goal of all of those jobs is to do good things with the wealth that Buffett created during his lifetime. It’s a win/win outcome for the Buffett family and for the world at large.
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Diversification in giving
While the situation surrounding the shift in Buffett’s giving plans is unfortunate, the outcome could actually be better. Instead of focusing most of his giving on one charitable group, he has now spread it more broadly across five.
Buffett spent years building his wealth, and the world is likely to benefit for generations to come. And now there’s a greater opportunity to spread the philanthropic effort, since each foundation he supports or has supported is likely to pursue different giving goals. Diversification is good for an investment portfolio, and it is likely to be good for a “giving portfolio” as well.
