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Buffett has given USD50.7B toward historic pledges

AP – After 17 years of steady payments, Warren Buffett has to date given annual donations totalling USD50.7 billion toward his historic multibillion-dollar pledges to the Bill & Melinda Gates Foundation and to four foundations connected to his family, according to a Chronicle tally. He announced his latest annual payments toward his pledges on Wednesday.

Buffett became the biggest donor in history in June 2006, when he pledged 10 million shares of his Berkshire Hathaway Class B stock, then valued at about USD36.1 billion, to the Gates Foundation, plus one million Berkshire shares, then valued at USD3.6 billion, to the foundation named for his late first wife, Susan Thompson Buffett, and 350,00 shares, then valued at about USD1.3 billion apiece, to foundations created by his three children, Susan, Howard, and Peter Buffett.

Combined, those five pledges amounted to more than USD43.5 billion at the time. In 2010, Buffett and Berkshire’s other shareholders approved a stock split, which significantly increased the number of shares Buffet has given the five foundations in the years since.

With these latest payments, he has given the Gates Foundation nearly USD39.3 billion, the Susan Thompson Buffett Foundation almost USD4.2 billion, and more than USD2.4 billion apiece to the Sherwood, Howard G Buffett, and Novo foundations.

Although he has exceeded his original pledges, a spokeswoman for Buffett told the Chronicle that he will continue to make payments to the five foundations throughout his lifetime as he promised to do in the statements he made announcing the pledges in 2006.

Berkshire Hathaway Chairman and CEO Warren Buffett. PHOTO: AP

When Buffett announced his huge pledge to the Gates Foundation, he said he was doing so because he was confident it could make the most of the money.

“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?”

That thinking was greeted with enthusiastic approval by philanthropy experts in 2006 and remains admired today. The philanthropy historian Benjamin Soskis said Buffett’s decision to give the money to an organisation he thought could handle it better than he could was “innovative,” and he wishes others would have followed Buffett’s lead.

“If more wealthy donors had embraced that, it really could have had a huge impact on the sector because it would have concentrated funding in smaller and smaller fiefdoms,” Soskis said. “It was a really interesting idea, but not one that has been widely taken up.”

Buffett’s example remains powerful more than 15 years later, said Phil Buchanan, who leads the Center for Effective Philanthropy, because it showed rich donors that having tens of billions of dollars does not mean they have to pursue their philanthropic goals by creating a new foundation that will exist long after they are gone.

“He showed folks that there are existing institutions that you can look to, whether foundations, in his case, or any number of different giving vehicles or to non-profits themselves,” Buchanan says. “I think that’s really healthy and positive.”

Buffett structured his Gates Foundation pledge so it would receive five per cent of the promised shares each year starting in 2006. He stipulated that either Bill Gates or Melinda French Gates “must remain alive and active in the policy-setting and administration of the foundation” to continue receiving the annual disbursements.