CIO —
Microsoft Chairman Bill Gates may never see a more generous donation to the foundation he runs with his wife: a US$30.7 billion pledge from the world’s second-richest man, famed investor Warren Buffett.
The Oracle of Omaha, as Buffett is known due to his stock-picking ability, on Sunday posted letters on his company’s website pledging to give away more than $37 billion to five charitable foundations.
The largest donation will nearly double the size of the Bill & Melinda Gates Foundation’s assets to about $65 billion and make it the biggest charitable foundation in the world. The former number one, the Stichting INGKA Foundation, is a Netherlands-registered charity established by Ingvar Kamprad, founder of Swedish home furnishings giant IKEA. Its assets have been estimated at $36 billion.
In the first year alone, Buffett’s initial contribution will allow the foundation to increase its annual giving by $1.5 billion.
"I greatly admire what the Bill & Melinda Gates Foundation is accomplishing and want to materially expand its future capabilities," Buffett said in the letter. "You have committed yourselves to a few extraordinarily important but underfunded issues, a policy that I believe offers the highest probability of your achieving goals of great consequence."
Bill and Melinda Gates quickly responded to Buffett’s generosity.
"We are awed by our friend Warren Buffett’s decision to use his fortune to address the world’s most challenging inequities, and we are humbled that he has chosen to direct a large portion of it to the Bill & Melinda Gates Foundation," they said in a letter, adding they have enjoyed a "special" 15-year friendship with him. Bill Gates has played bridge with Buffett for years, and last December, the two anted up $1 million to fund a program to teach the card game to junior high school students in the United States.
Gates also sits on the board of directors at Berkshire Hathaway.
Buffett pledged to give the foundation 10 million shares of stock in the company he runs his investments through, Berkshire Hathaway, in allotments over a stretch of time. The initial contribution to be made this July will be 500,000 shares of B-class stock in Berkshire Hathaway, he said in the letter. Each July thereafter, 5 percent of remaining shares will be handed over to the foundation.
The billionaire cited only a few caveats to his largesse, including a stipulation that his shares continue to be given to the foundation only so long as either Bill or Melinda Gates remains alive and active in its operations. The foundation must also satisfy legal requirements to qualify Buffett’s gift as charitable so it is not subject to taxes.
