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Monday, April 15, 2024

Warren Buffett Just Gave Another $2.8 Billion To Charity

By Michael Ide. Originally published at ValueWalk.

Warren Buffett’s fortune has just shrunk by $2.8 billion, and it’s all going to charity.

The announcement was made on Monday that the billionaire investor has given 20,640,653 Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) Class B shares to five foundations. The donation is valued at more than $2.8 billion as of market close last Thursday.

Warren Buffett Berkshire Hathaway

This marks Buffett’s tenth annual gift to the Bill and Melinda Gates, Susan Thompson Buffett, Sherwood, Howard G. Buffett and NoVo Foundations. The donation must be spent currently for operations and cannot be added to endowment funds.

Warren Buffett’s original pledge

Warren Buffett originally pledged to make the annual gifts of Berkshire Hathaway Class B stock in 2006.

“I know what I want to do,” the billionaire told Fortune when he announced his decision, “and it makes sense to get going.” At the time, he said he planned to give 85% of his Berkshire stock away.

The bulk of the gift goes to the Bill and Melinda Gates Foundation, an organization run by Microsoft Corporation (NASDAQ:MSFT) Bill Gates and his wife, Melinda. “BMG can rely on this pledge to immediately and permanently expand my activities,” Warren Buffett wrote in a 2006 letter discussing the donation. His first gift of $1.5 billion doubled the organization’s spending.

“Working through the Foundation, both of you have applied truly unusual intelligence, energy and heart to improving the lives of millions of fellow humans who have not been as lucky as the three of us,” he wrote. “You have done this without regard to color, gender, religion or geography. I am delighted to add to the resources with which you carry on this work.”

Warren Buffett’s donation to The Susan Thompson Buffett Foundation

The rest of the annual donation is spread across four other organizations, all of which are tied to Warren Buffett’s family.

The Susan Thompson Buffett Foundation is named for Warren Buffett’s late wife Susan, who died in 2004. Her will bestows $2.5 billion on the foundation, which has largely focused on reproductive heath, family planning and pro-choice causes. “I am enormously proud of what STB has accomplished,” Buffett wrote in a 2006 letter to the organization’s directors. “And you can be sure that Susie would be as well.”

The other three organizations – the Sherwood, Howard G. Buffett and NoVo Foundations – are run by Buffett’s children, Susan, Howard and Peter. “I am enormously proud of the way in which you have managed the resources of the foundation that Mom and I established for you. Your thinking has been good, and your actions have been effective in helping those less fortunate than our family has been,” the billionaire wrote in separate letters written to each.

In 2012, he doubled his annual pledge to each in a letter addressed to all three:

I knew that you would apply your considerable brains and energies in order to make the most of the funds from my gift. However, you have exceeded my high expectations. Your mother would be as proud of you as I am. I see her influence in what you are accomplishing.

He signed the letter “Love, Dad.”

Warren Buffett, alongside Bill Gates, has also created the Giving Pledge, a commitment by the world’s richest individuals and families to dedicate the majority of their wealth to philanthropy.

More than 99% of Buffett’s wealth will be donated, though the Giving Pledge requires a gift of at least 50%. Current pledgers include hedge fund manager Bill Ackman, Facebook Inc (NASDAQ:FB) founder Mark Zuckerberg and former New York mayor Michael Bloomberg.

The world’s third richest person, Warren Buffett won’t likely miss the money. Forbes estimates his net worth to be $67.3 billion.

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