Warren Buffett, philanthropist and multi-billionaire CEO of American multinational conglomerate Berkshire Hathaway, has donated another $1.2 billion of his wealth to foundations, serving his 2006 pledge to steadily donate his $150 billion wealth during his lifetime and beyond.
In his letter to the shareholders, the 94-year-old CEO reflected upon life and how “fickle” it can be, sharing his most detailed plan to donate his fortunes after his death.
‘Father, Time Always Wins’
In his four-page letter to the shareholders, Mr Buffett announced that he would “convert 1,600 A shares into 2,400,000 B shares to give these B shares to four family foundations: 1,500,000 shares to The Susan Thompson Buffett Foundation and 300,000 shares to each of The Sherwood Foundation, The Howard G. Buffett Foundation and NoVo Foundation.
“Father time always wins. But he can be fickle – indeed unfair and even cruel – sometimes ending life at birth or soon thereafter while, at other times, waiting a century or so before paying a visit. To date, I’ve been very lucky, but, before long, he will get around to me,” Mr Buffett said, reflecting on how he thought his first wife, Susie, would outlive him and subsequently donate the vast majority of their fortune, but “that was not to be.”
Read the full letter: BERKSHIRE HATHAWAY INC
With his $1.2 billion donations, his class A shares in Berkshire Hathaway – which accounts for 99.5% of his $150 billion wealth – have reduced to 206,363 shares after he gave way almost 56.6% of his shareholdings since his pledge in 2006. He is currently the sixth richest person in the world according to Forbes.
“In 2004, before Susie, my first wife, died, the two of us owned 508,998 Class A shares. For decades, we had both thought that she would outlive me and subsequently distribute the vast majority of our large fortune. That was not to be,” he said.
Warren Buffett’s New Will
The Berkshire CEO made changes to his will, detailing how he plans to donate the rest of his wealth after his death. Mr Buffett said that he and his first wife Susie had “long encouraged” their children in small philanthropic activities and had been pleased with their enthusiasm, diligence and results. Since 2006, their philanthropic activities have dramatically increased.
He hopes his three children – Susie, Howie and Peter – will gradually distribute all of his Berkshire holdings that account for 99.5% of his wealth. In his lifetime, Mr Buffett has donated more than $60 billion of his wealth to various foundations, a majority of which, approximately $43 billion, to the Gates Foundation run by Bill and Melinda Gates.
As he reflected upon mortality, relationships and the fickle nature of life, he talked about a downside to his “good fortune” and said, “The expected life span of my children has materially diminished since the 2006 pledge. They are now 71, 69 and 66. I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. I know the three well and trust them completely. Future generations are another matter. Who can foresee the priorities, intelligence and fidelity of successive generations to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape? Still, the massive wealth I’ve collected may take longer to deploy than my children live.”
Mr Buffett has assigned three potential successor trustees for the distribution of wealth, each being well-known to his children and is “somewhat younger to them.” However, he hopes that the trustees stay on the waitlist, and his children fulfil the responsibility in their lifetime.
His children have to “unanimously” decide on how to donate his wealth, a caveat in his will, which he explained in his letter through the unpleasant reality of philanthropy and those who can distribute huge sums are forever regarded as “targets of opportunity.”
‘One Suggestion For All Parents’
“I have one further suggestion for all parents, whether they are of modest or staggering wealth. When your children are mature, have them read your will before you sign it,” he said in his letter.
“Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death. If any have questions or suggestions, listen carefully and adopt those found sensible. You don’t want your children asking “Why?” in respect to testamentary decisions when you are no longer able to respond.”
