Tuesday, June 10, 2008

Buffett's Motivation

Warren Buffett
Warren Buffett: Legendary corporate and philanthropic investor
There has been an interesting discussion over at Sean Stannard-Stockton's blog, Tactical Philanthropy, on the topic of "Why Do People Really Give to Charity?" You can follow it here:
http://tacticalphilanthropy.com/2008/05/why-do-people-really-give-to-charity

The discussion is revolving around Warren Buffett's decision to pass on the bulk of his estate to the Bill & Melinda Gates Foundation while he is alive, a decision that reversed many of his previous plans.

One of the recent comments was from a guest named "young staffer, who pointed to this intriguing article in FORTUNE magazine... an interview of Buffet by one of his close friends, Carol J. Loomis (FORTUNE Magazine editor-at-large).

Among the gems:
  • "The terms of Buffett's gift (require the Foundation) 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."
  • Buffett on why he had not previously donated much: "Someone who was compounding money at a high rate, I thought, was the better party to be taking care of the philanthropy that was to be done 20 years out, while the people compounding at a lower rate should logically take care of the current philanthropy."
  • Buffett has always been a good forecaster: "When we got married in 1952, I told Susie I was going to be rich."
  • Buffett on why he is not giving all his money to his kids: "Dynastic mega-wealth would further tilt the playing field that we ought to be trying instead to level."
  • And again: "A very rich person should leave his kids enough to do anything but not enough to do nothing."
  • Buffett on why he gave to the Gates Foundation instead of one of his family's own: "I came to realize that there was a terrific foundation that was already scaled-up - that wouldn't have to go through the real grind of getting to a megasize like the Buffett Foundation would - and that could productively use my money now."
  • Bugget on why now: "If I've found the right vehicle for my goal, there's no reason to wait."
  • Buffet on his motivation besides immediate impact through his gifts: "I have some small hopes that what I'm doing might encourage other very rich people thinking about philanthropy to decide they didn't necessarily have to set up their own foundations but could look around for the best of those that were up and running and available to handle their money."
The full article is brief, well worth the read and available here:
http://money.cnn.com/magazines/fortune/fortune_archive/2006/07/10/8380864/index.htm