Well, Warren Buffett is giving away 85% of his wealth to the Bill and Melinda Gates Foundation, a philanthropic organization focused on world health -- fighting such diseases as malaria, HIV/AIDS, and tuberculosis -- and on improving U.S. libraries and high schools.
His gift is an estimated $37 billion dollars today. The Foundation was previously worth about $30 billion. With the combined assets now available, can you imagine the impact it's going to have? It's worth imagining.
If the Foundation spends $3 billion per year as planned, it works out to roughly $1 per person if you consider only the poor half of the world's population. Is that enough for the it to make a huge difference? It very well might be.
I'm left wondering, though, what sort of statement does it make that one of the world's most successful capitalists chooses to give it all away?
*Edit (8-13-06): The NYT has an interesting article looking at how the Gates Foundation will give away all the money donated by Buffett. It certainly will be fascinating to see what new endeavors they are able to embark on.
7 comments:
>>what sort of statement does it make that one of the world's most successful capitalists chooses to give it all away?<<
what kind of statement do you think it makes?
i really have mixed feelings. i am really happy that he has decided to give so much away, but i am also struck by the reality that he has minimal sacrifice with 5 billion still in the bank.
it seems like the lessen becomes, "get as much money as you can, so then later in life you can give it away." i wish the message were "don't hoard so much for yourself, but create structures by which your success benefits others as you succeed."
i would love to hear your thoughts.
Many would argue that what Warren Buffett has done in his life has created many structures from which his success has benefited others, even before his contribution to the Gates Foundation. Naturally, just about anyone who has invested in Berkshire-Hathaway has been successful. How many people have been able to make a successful living through the myriad of companies that Berkshire-Hathaway has owned, or has a significant financial stake in?
An interesting point: it seems that noted atheists/agnostics, such as Bill Gates and Warren Buffet are at the forefront of the social justice movement and putting a lot of their own wealth towards it. Could the members of the Christian Kingdom be missing the boat?
-Chairman
Per the Wikipedia link:
The following two quotes from 1995 and 1988 respectively, highlight Warren Buffett's thoughts on his wealth and why he long planned to reallocate it:
"I personally think that society is responsible for a very significant percentage of what I've earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you find out how much this talent is going to produce in the wrong kind of soil... I work in a market system that happens to reward what I do very well - disproportionately well. Mike Tyson, too. If you can knock a guy out in 10 seconds and earn $10 million for it, this world will pay a lot for that. If you can bat .360, this world will pay a lot for that. If you're a marvelous teacher, this world won't pay a lot for it. If you are a terrific nurse, this world will not pay a lot for it. Now, am I going to try to come up with some comparable worth system that somehow (re)distributes that. No, I don't think you can do that. But I do think that when you're treated enormously well by this market system, where in effect the market system showers the ability to buy goods and services on you because of some peculiar talent - maybe your adenoids are a certain way, so you can sing and everybody will pay you enormous sums to be on television or whatever - I think society has a big claim on that." (Lowe 1997:164-165)
"I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die." (Lowe 1997:165-166)
Based on those thoughts, I agree with his philosophy of using his gifts to bring about the eventual maximum return for society. His hanging on to his money (to make more money) is bringing a larger return for society, assuming he does give it all away.
>>just about anyone who has invested in Berkshire-Hathaway has been successful<<
their stock never splits so you pretty much have to be successful to buy it in the first place. that or have bought it 15+ years ago.
>>Could the members of the Christian Kingdom be missing the boat?<<
yes.
let me make it very clear. i absolutely applaud what buffet did. too many people just pass their cash on to the kids without considering others in need.
i also think it is interesting that the two richest men in the world have turned so stongly to charity later in life. it seems to indicate an emptiness that wasn't filled by worldly capitalistic success.
>>Warren Buffett's thoughts<<
after i posted my initial comment i too did some buffet reading, including the wikipedia article. i intended to post again but ran out of time. buffet has indeed done some great things. he apparently still lives in the same house he did in 1958. plus berkshire hathaway owns dairy queen and they have great ice cream. he also only takes $100,000 salary. . . and berkshire hathaway's website is as humble as they come.
i suppose the truth is that i do not know enough about warren buffet and never will. plus i think that i spoke early out of condemnation and judgment without knowing buffet's heart. i imagine i am quick to judge the rich because of my own temptations to make money an idol of security and power.
my question remains the same though, even if it has nothing to do with buffet. is it o.k. to play the games of the world if at the end you give all the prizes back?
BRK-B shares are priced much more modestly (about $3100 per share) than the A version (currently a cool $93K per share). But the high price lowers the volatility of the stock, allowing for a longer-term perspective from the corporation (as opposed to stocks that have heavy turnover and are much more susceptible to quarterly numbers).
Interestingly, it seems that wealth in the Old and New Testament have a different flavor. Wealth seems to be a reward for following godly ways in the OT, while in the NT, the view of wealth is not as high (though a couple parables do deal with wealth in a very positive way - ten parables, ten minas, shrewd manager come to mind). Perhaps it has to do with the different eras, as for much of the OT the Chosen People were conquering and were on top of the world, while in the NT, the audience was a relatively downtrodden group. Either way, I suspect that wealth not a core issue, with the core issue being rather how wealth (or lack of wealth) manifests itself in your character.
Do you play the games of the world? The shrewd manager did, and was rewarded. Of course, that parable always confuses me. Solomon suggests that it's all meaningless. But Ecclesiastes confuses me, too. My suspicion is that it's okay to be filthy rich, as long as you remember that God knows where your heart truly lies.
-Chairman
"it seems that noted atheists/agnostics, such as Bill Gates and Warren Buffet are at the forefront of the social justice movement"
This point speaks more to the illegitimacy of the "social justice" movement than the morality of Gates or Buffett.
"is it o.k. to play the games of the world if at the end you give all the prizes back?"
This statement may be suggesting a redistributionist philosophy, ironically, which creates poverty.
This statement may be suggesting a redistributionist philosophy, ironically, which creates poverty.
So do you think Buffett's gift will "create poverty"?
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