Warren Buffett gives away his fortune

[im10ashus]

NEW YORK (FORTUNE Magazine) - We were sitting in a Manhattan living room on a spring afternoon, and Warren Buffett had a Cherry Coke in his hand as usual. But this unremarkable scene was about to take a surprising turn.

"Brace yourself," Buffett warned with a grin. He then described a momentous change in his thinking. Within months, he said, he would begin to give away his Berkshire Hathaway fortune, then and now worth well over $40 billion.

This news was indeed stunning. Buffett, 75, has for decades said his wealth would go to philanthropy but has just as steadily indicated the handoff would be made at his death. Now he was revising the timetable.

"I know what I want to do," he said, "and it makes sense to get going." On that spring day his plan was uncertain in some of its details; today it is essentially complete. And it is typical Buffett: rational, original, breaking the mold of how extremely rich people donate money.

cont'd...

http://money.cnn.com/2006/06/25/magazines/fortune/charity1.fortune/index.htm?cnn=yes

[cornermouse]

1. Me, me. Here. here.

:spray: :bounce: :bounce: :applause:

:rofl:

[im10ashus]

2. No kidding!

I'd be happy if he helped me finish college. :shrug:

[cornermouse]

6. I just couldn't resist having some fun with it.

Hmmm... 100 acres of farmland with a well and septic system and I'd be happy.

That's not too much to ask, is it? :eyes:

Yeah right. :rofl:

[salin]

3. I remember when Arnie was turning to Buffet as a financial advisor for his

gov. campaign - until straight talking from Buffet (budget problems - serious - going to have to raise taxes...) led to conservatives forcing Arnie to distance himself from Buffet.

Then there was his effort to inform folks about how ridiculous and disproportionate the series of bush tax cuts (esp those on capitol gains) were - and that he didn't support them.

Buffet has always been a pretty interesting figure. Makes more sense to 'see' some of the good that one's money can do, rather than wait until after one has died.

[bluestateguy]

4. I figure that's about $130 for every American

Figure he passes on a billion to his family. 39 billion divided by all 300 million Americans is $130 bucks each.

[in_cog_ni_to]

5. Nice. Very nice. Very generous.

I was hoping to read he was buying CNN, MSNBC and FAUX News and turn them all into Liberal networks. I wish!

[vademocrat]

7. Most of it's going to the Bill & Melinda Gates Foundation -

"Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world's largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett's (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).

The Gateses credit Buffett, says Bill, with having "inspired" their thinking about giving money back to society. Their foundation's activities, internationally famous, are focused on world health -- fighting such diseases as malaria, HIV/AIDS, and tuberculosis -- and on improving U.S. libraries and high schools.

Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are "thrilled" by that and by knowing that Buffett's money will allow the foundation to "both deepen and accelerate" its work. "The generosity and trust Warren has shown," Gates adds, "is incredible." Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares - starting with 602,500 in 2006 and then decreasing by 5% per year - to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair -- Bill, now 50, or Melinda, 41 -- is active in it.

Berkshire's price on the date of each gift will determine its dollar value. Were B shares, for example, to be $3,071 in July - that was their close on June 23 - Buffett's 2006 gift to the foundation, 500,000 shares, would be worth about $1.5 billion. With so much new money to handle, the foundation will be given two years to resize its operations. But it will then be required by the terms of Buffett's gift to annually spend the dollar amount of his contributions as well as those it is already making from its existing assets. At the moment, $1.5 billion would roughly double the foundation's yearly benefactions. But the $1.5 billion has little relevance to the value of Buffett's future gifts, since their amount will depend on the price of Berkshire's stock when they are made. If the stock rises yearly, on average, by even a modest amount - say, 6% - the gain will more than offset the annual 5% decline in the number of shares given. Under those circumstances, the value of Buffett's contributions will rise."

[cornermouse]

8. That's a rat hole.

You can be sure the money will be leaving the U.S. and educating the current and future overseas workforce. Americans are unlikely to see any of it.

[MyNameGoesHere]

9. Rat hole?

you mean like a spider hole? What you mean?

[cornermouse]

10. You're in West Virginia and you don't know what a

rat hole is?

[MyNameGoesHere]

12. Oh my no

we try to keep rats out of the house, even as backwards as we are you know.

[cornermouse]

16. Try a dictionary.

You might want to start with slang and colloquialisms.

[MyNameGoesHere]

19. I hear crickets.

Is that colloquial enough? Or maybe an idiom? Hell I don't know, we just don't have rat holes.

[cornermouse]

21. Don't tempt me.

I'm currently fighting the urge to say something like "two solitary brain cells..."

[MyNameGoesHere]

24. I doubt it.

Maybe one. You see, it's the rat poison. Kills brain cells. So maybe 1 and a half tops.

[cornermouse]

25. You win.

I'm sorry I said that about the brain cells. I shouldn't have. It wasn't nice. I'll try to restrain the acerbic and to the point side of my personality.

[vademocrat]

11. It doesn't look like a rat hole - have you looked at their website?

http://www.gatesfoundation.org/default.htm

They spend a lot of money in this country. They also support global healthcare - vaccines & such.

"Through its partnerships in communities across the nation, the Bill & Melinda Gates Foundation is committed to raising the high school graduation rate and helping all students—regardless of race or family income—graduate as strong citizens ready for college and work."

[cornermouse]

13. And after they graduate they go to work where?

Its not enough to go to college if the jobs are being shipped overseas as fast as possible.

Vaccines? In the days of yore if you couldn't afford it, you took your child to the local community health center/health department and got them their immunizations. You could also go there for other minor medical care. Last I knew this was still the case. The phone book says they still exist. Seems like a duplication of services to me. Maybe even an inefficient use of their charitable resources?...

[MyNameGoesHere]

15. I would guess

that really the issue is that you are on the I hate M$, I hate Gates, I hate PC bandwagon and just like to skirt around that a bit. Did your PC hurt you really bad? I am sorry. They can be complicated at times.

[vademocrat]

17. Vaccines are global - where they are desparately needed -

Jobs being shipped overseas is a much larger issue - but IMHO, education is never wasted.

I don't really want to argue with you - just saying that, to me, the foundation doesn't look like a "rathole".

[cornermouse]

20. In one sense I agree. Education is never wasted.

The sticky part is in the fact that the majority of us have to get loans to attend which we are then expected to pay back. That's sort of hard if the job you trained for went overseas while you were attending college or shortly after you graduated.

I guess what I'm saying is that charity is fine if you have no other alternatives to offer. But if you're in a position to offer people either a job or charity as the Gates are, most people really do prefer the job over charity. That's why Gate's charity just sort of rings hollow. Its sort of a empty gesture.

[lumpy]

39. Corporations control jobllessness.

Outsourcing jobs to other countries on the cheap, layoffs and downsizing to keep obscene perks in place for CEOs contribute heavily to downsizing the economic health of the US worker.
Some people are willing to reach out to try and cure some of the world's illnesses like abject poverty, serious health conditions, lack of education and knowledge. Sour grapes just doesn't cut it.

[Name removed]

41. Deleted message

Message removed by moderator. Click here to review the message board rules.

[cornermouse]

49. Whatever.

You might want to work a little harder on your grammar. You know clarify your contempt. :boring:

[lumpy]

40. An education is always of value.

Reading and writing and arithmetic are offered to all people in the US. Education shouldn't end after graduation, it should be a lifetime excersize. People have the basic tools to educate themselves even of they don't go on to college. We have scores of resources, libraries, the internet and most importantly a voice to comtinue to learn. If more people had continued to do this very thing we wouldn't be stuck with the likes we have for leadership; an ignoramous president, slapstick Congress, a slavering citizenry looking for an easy buck who follow like sheep or don't even go to the polls.

[JerseygirlCT]

18. From what I've read, they're doing excellent and needed work

both here and abroad.

They could easily be sitting pretty on their asses, living the high life. They're not.

They're actively searching for the best way to make a difference, and they're already making a difference in Africa.

I applaud them, and I applaud Buffet for supporting their vision to this extent.

[IsIt1984Yet]

36. Seconded. The Gates Foundation is wonderful. Here and abroad.

And, like you said, they could easily be sitting pretty on their asses, living the high life, squandering or squirriling away their fortunes. Instead, they work towards global issues.

[sweetheart]

14. The new carnegies

Using monopoly power to usurp mass fortunes the robber barons dressed themsleves in finery
and bought a sainthood to boot. Now Larry Ellison and all the others have to outdo each other
so we can hear about the bigheads another few decades now that brittany spears is fat. :-)

Good for Warren Buffet... the economist just hinted to that, and i'm glad he has.

And still the poor have no medical care,
and still the infant death rate is third world,
and still the prisons are filled overly with black people.

2006, and we're back to 1906, ain't progress grand.

[fishwax]

22. A great quote from the accompanying interview

Buffet says:

Certainly neither Susie nor I ever thought we should pass huge amounts of money along to our children. Our kids are great. But I would argue that when your kids have all the advantages anyway, in terms of how they grow up and the opportunities they have for education, including what they learn at home - I would say it's neither right nor rational to be flooding them with money.

In effect, they've had a gigantic headstart in a society that aspires to be a meritocracy. Dynastic mega-wealth would further tilt the playing field that we ought to be trying instead to level.

[cornermouse]

23. That's to his credit.

The fact that he and his wife raised kids who work during the day, are not partying every night, and would not appear to be hooked on drugs is probably quite unusual for people in his social class.

If it was me, I'd give them some seed money to start their own businesses and sit back to see how well they fly with it. As a parent, you get a lot of enjoyment out of just watching your kids succeed.

[fishwax]

26. his other well-known philosophy in that respect is that

rich parents should leave their kids enough to do anything, but not enough to do everything.

I'm not sure what his children do professionally, but each of his three children has his or her own charitable foundation, and each of those foundations will be one of the five major recipients of his Berkshire-Hathaway wealth (the other two being the gates foundation and buffet's wife's foundation).

[cornermouse]

28. I wish them well.

I just hope they use some of it to help the people in the U.S. I'm not taking anything away from overseas poverty, but there are a lot of people here who are extremely poor and who need that extra little boost to climb the next step up. And you know, if you help people here they just might turn around and pass it on to someone else.

[fishwax]

29. no, I can see your point

I believe that one of the primary functions of his wife's foundation is supporting pro-choice causes here, but aside from that I don't know what all their initiatives are or if they are primarily domestic. And I have no idea what the children's foundations do, I only know that about the wife's foundation b/c it was mentioned in the article.

The reason that the largest donation is to the gates foundation (which also does domestic work, including helping out poor families) is that the gates foundation is probably the only foundation in the world that could handle such a large influx of wealth. His wife's foundation, for instance, which apparently has only five employees, a larger influx of wealth would require a great investment in increasing administration before that money could actually be distributed. Also, since his wealth is primarily in stock (and these donations are stock donations), a smaller foundation would have to quickly sell the shares they received in order to generate cash, and large sales of the stock might reduce its value. But the Gates foundation is big enough to sit on the stock, thus insuring that the value of his gifts to the smaller foundations continues to rise.

It was actually the size of the gates foundation that inspired him to give the money now, rather than wait until later. When he realized that there was a foundation that could actually put the money to work immediately, he decided to donate it now.

A couple of other interesting aspects--as part of this donation, he will actually become a co-chair of the gates foundation. Another cool thing is that the amount of BH shares he donates each year to the foundation will decrease by 5%--but, assuming the price of the shares rises a conservative 6% a year, the value of his donation will increase with each passing year.

[bobbolink]

32. Thank you! So much need here, and so overlooked!

I so much appreciate your comments! Poverty right here in the U.S. is not an "in" topic in either progressive/liberal agendas, nor in the churches. The situation has become very dire, but not something that many want to look at.

How to get the attention of those who have the $$, but don't know how important this issue is.

Thanks for saying this....it gets so discouraging to see how overlooked this whole issue of Domestic Poverty is!

[IsIt1984Yet]

37. And that's exactly what the Gates' are doing with their kids.

Each child has an extremely modest (by THEIR standards) trust, the rest of the estate is going to the foundation which, by the way, is FAR from a "rat-hole".

[sandnsea]

33. Exactly, precisely, what Carnegie said

And also, that that tipping of wealth into the hands of a few would destroy representative democracy.

And yet, the very people they want to level the playing field for and save democracy for, are the ones voting in the idiots to take all that away from them.

[fishwax]

35. yeah, it's pretty ironic when someone like

buffet has a firm grasp on the concept but the majority of lower and middle income voters think wealthy elites like bush actually have their best interests at heart. :shrug:

[Union Thug]

27. Buffet once said.. that there 'IS a class war, and my side is winning...'

I hope he considers using his fortune to destabilize the right-wing in this country. I can dream can't I?

[fishwax]

30. his quote was actually a little different

what he said was more like (though this may not be exact): "the class war is over, and my class won."

The way you put it makes it seem like he was happy about it, when in reality I don't think he saw himself taking the "side" of his class, but rather (a) taking issue with the idea that the lower classes are waging class warfare and (b) lamenting the injustices imposed upon the lower classes. (Not trying to be a dick pointing out the difference, just trying to be fair to buffet :).)

He has donated a lot to democrats over the years, and much of the funds he is donating will go to left-wing causes--health care, anti-poverty, pro-choice, etc. But I agree with you that it would be nice to see him use those funds to directly confront the right-wing, as sort of a counter to the scaifes of the world.

[Cassondra]

31. Buffet on inheritance

I recall hearing an interview with Buffet and his statement about money given to his children was more like, "I would give them enough to do something, not enough to do nothing".

I think his son at the time had been owning and running a large farm in Iowa.

[fishwax]

34. I didn't know that about his son

but that's interesting.

He had another interesting quote about his philosophy on inheritance in this article as well, which I mentioned here: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=1503864&mesg_id=1504142

And welcome to DU! :hi:

[Union Thug]

43. good clarification

And I wish I would have been a little clearer. He has made these points several times, and as you say, not arrogantly celebrating his class, but with the intention of pointing out the injustices in this country. I believe he also said something about his secretary paying more in income taxes than he does!

Anyway, always good to have the feedback. Thx!

[fishwax]

44. cool. i figured that was what you meant, but

since a few have taken this announcement as an opportunity to snipe at buffett, I wanted to make sure :)

And I remember the secretary bit, too ... don't remember the exact quote, but it was during one of shrubco's attempts to gut the tax on dividends. Buffett opposed that reduction, just as he opposed reductions in the estate tax and bush's income tax cuts. It's frustrating to see America's lower and middle classes voting against their economic interests, but sure is nice to see someone like Buffett doing it ;)

[im10ashus]

38. I think that's a good dream to have.

And totally have that same dream.

:hi:

[entanglement]

42. Good for him and the Bill and Melinda Gates Foundation!

n/t

[upi402]

45. START A LIBERAL (fact based) TV NEWS NETWORK

please please please please please please
please please please please please please
please please please please please please
please please please please please please
ad infinitum

[RagingInMiami]

46. I want $3,000 to buy a new camera

Plus another $500 to buy some memory cards and another camera case.

[NuttyFluffers]

47. i'm just thinking how i'd spend that money better...

a foundation is nice and all, but i'd purchase obscene amounts of solar cells or wind mills and start to take the world off the oil grid one household at a time. also make water and sewage facilities worldwide. could probably just walk on over to some countries in africa and just wipe out their energy costs, water and sewage issues, and create an entirely new market base for renewables. like, oh i don't know, Namibia suddenly has desalination plants, solar cells, and the like, and then a school to teach them how to maintain the things, and possibly build components, or assemble the finished products, thus creating a brand new market for american renewable companies.

or, hell, walk on over to huge swaths of poor america and work some of those sister city relations so that a city in, let's say asia, and a city in michigan work to build each others economy by working on a complex, but needed product.

$40 bil is a hell of a lot of money, and $30 bil going to 1 foundation is a bit much. you can buy whole nations ouright for that, if not nation build like something out of Sim City. oh well, it's his money, and i'm sure some good will come out of it.

[anewdeal]

48. what a true hero