The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [467]
For Christmas, Warren and Susie gave each of the kids another six hundred shares of Berkshire stock for their foundations—a complete surprise, which thrilled all of them.3 Howie had donated most of his money so far to wildlife and environmental causes, Susie Jr. to education and local causes in Omaha, and Peter to environmental, Native American, and local causes in Wisconsin.4 With an eye to the future, knowing that they would one day have much larger sums of money to distribute, their parents had decided to give them this gift to train them in philanthropy. Within two years of Warren’s or Susie’s death, thirty, forty, fifty billion dollars or more—depending on Berkshire’s stock price at the time—would sluice into the foundation, and the law required that shortly thereafter the foundation begin giving away five percent each year. Buffett did not believe in perpetual foundations that entrusted money to the whims of future generations of trustees. But with only a couple of employees, the Buffett Foundation was woefully ill-equipped to ramp up fast enough to give away a billion dollars a year.5 Warren had been giving this problem a lot of thought, and it occurred to him that one way Susie could choose to deal with it was to turn some of the Buffett Foundation money over to the Gates Foundation. The Bill and Melinda Gates Foundation had grown since its establishment in 2000 to a multibillion-dollar philanthropy. Gates said that 4.2 billion people in the world, most of the earth’s population, made less than $2 a day. Yet each of their lives was worth as much as any American’s. These people lived in the here and now, not in some generation far in the future.
“Bill Gates is the most rational guy around in terms of his foundation. He and Melinda are saving more lives in terms of dollars spent than anybody else. They’ve worked enormously hard on it. He thinks extremely well. He reads thousands of pages a year on philanthropy and health care. You couldn’t have two better people running things.
“They have done incredible work, they’ve thought it through, their values are right, their logic is right.”
Warren was still assuming that Susie ultimately would be the one to make these decisions, however.
“Susie gets all the money. And she is in total charge of everything. My will just gives it to her, and her will just gives it to me.
“It’s crazy to try and write complicated instruments; you don’t need to do it. Now, she could give it all to my kids’ foundations if she wants. She is not restricted. But Susie doesn’t care whether she has one share of Berkshire or a hundred thousand shares of Berkshire.6 She will probably just put it all in the foundation. Not a share needs to be sold. In the first year or two, while they were ramping up on other things, if they just matched what the Gateses did and gave them two billion instead of one billion a year, that’d be perfectly appropriate. Don’t get proprietary about it. I’m perfectly willing to let other people do all the work at Berkshire. But they would hate that at the Buffett Foundation. It seems so lacking in imagination and innovativeness. Even though it’s terribly logical.
“Now, that isn’t what people want to do. I mean, the normal human institution reacts enormously against that. But that is not a crazy system. It’s like doubling your position on a stock.
“He’s got people in place. And if we gave some money to him, the last half of the money would be used as intelligently as the first half. There would be very little falloff in utility of the last dollar versus the first dollar. Giving money to other foundations, it’s just not what foundations like to do. But there’s nothing wrong with copying good people.”
Coattailing by giving some of the money to the Gates Foundation while the Buffett