Warren Buffett donates $39.3 billion to Bill Gates’ Foundation.

Warren Buffett Donates $50.7 Billion to Philanthropic Causes

After 17 years of consistent contributions, Berkshire Hathaway CEO Warren Buffett has made annual donations totaling $50.7 billion towards his historic multibillion-dollar pledges. These pledges are directed towards the Bill & Melinda Gates Foundation and four foundations associated with his family, as reported by the Chronicle of Philanthropy.

Buffett, 92, recently announced his latest annual payments towards these pledges.

In June 2006, Buffett became the largest donor in history when he pledged 10 million shares of his Berkshire Hathaway Class B stock, valued at approximately $36.1 billion at the time, to the Gates Foundation.

During the same month, Buffett also pledged 1 million Berkshire shares, valued at $3.6 billion, to the foundation named after his late first wife, Susan Thompson Buffett. Additionally, he pledged 350,000 shares, valued at about $1.3 billion each, to foundations established by his three children – Susan, Howard, and Peter Buffett.

Combined, these five pledges amounted to over $40 billion at the time. In 2010, Buffett and Berkshire’s shareholders approved a stock split, significantly increasing the number of shares Buffett has given to the five foundations over the years.

With the latest payments, Buffett has donated nearly $39.3 billion to the Gates Foundation, almost $4.2 billion to the Susan Thompson Buffett Foundation, and over $2.4 billion each to the Sherwood, Howard G. Buffett, and NoVo foundations.

While Buffett has already surpassed his original pledges, a spokeswoman for him confirmed that he will continue making payments to these foundations throughout his lifetime, as promised in his 2006 statements.

When Buffett made his substantial pledge to the Gates Foundation, he explained that he believed they were better equipped to maximize the impact of the funds.

“I don’t think I’m as well cut out to be a philanthropist as Bill and Melinda are,” Buffett told Fortune magazine in 2006. “What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it?”

This approach was highly praised by philanthropy experts in 2006 and continues to be admired today.

Buffett’s Lasting Influence

According to philanthropy historian Benjamin Soskis, Buffett’s decision to entrust the money to an organization he believed could handle it better was “innovative.” Soskis expressed his wish that more wealthy donors would follow Buffett’s lead, as it could have a significant impact on the sector by concentrating funding in smaller, specialized areas.

Phil Buchanan, who leads the Center for Effective Philanthropy, believes that Buffett’s example remains powerful even after almost two decades. It demonstrates to wealthy donors that they don’t have to create new foundations to pursue their philanthropic goals. Existing institutions, such as foundations or nonprofits, can be effective vehicles for making a difference.

Buffett’s Pledge to the Gates Foundation

Buffett structured his pledge to the Gates Foundation in a way that it would receive 5% of the promised shares each year, starting in 2006. He also specified that either Bill Gates or Melinda French Gates must remain actively involved in the foundation’s policy-setting and administration to continue receiving the annual disbursements.

Furthermore, Buffett mandated that the Gates Foundation must spend the value of the previous year’s gift plus 5% of its net assets annually. Any excess spending could be carried forward, and any shortfalls would be made up the following year.

Buffett joined the Gates Foundation board and has made gifts towards his commitment every summer since announcing the pledge.

Experts in philanthropy assert that Buffett’s pledge transformed the Gates Foundation into one of the world’s wealthiest grant-makers. This shift in power within the foundation world elevated the Gates Foundation to the top, while some legacy grant-makers saw their influence diminish. It also subjected the Gates Foundation to intense public scrutiny.

“Buffett turned a large foundation into a colossus and into something that was an order of magnitude much larger than its peers,” Soskis explained. “The amount of pressure that put on the institution to spend amounts of money that no foundation had ever spent before on a consistent basis as a normal form of operation required a real transformation of the foundation and a scaling of its bureaucracy and of its ambition.”

Buffett resigned from the Gates Foundation’s board in the spring of 2021, shortly after the announcement of the Gateses’ divorce. While he did not address the divorce in his statement, he mentioned that his decision to step down from the board followed his departure from all other corporate boards, except Berkshire Hathaway.

The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.

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