NYT: Warren Buffett, the chairman of Berkshire Hathaway Inc. and one of the world's wealthiest men, plans to donate the bulk of his $44 billion fortune to the Bill & Melinda Gates Foundation and four other philanthropies starting in July. The donations, outlined in a series of letters that Mr. Buffett released yesterday and will execute today, represent a singular and historic act of charitable giving that vaults him into the top tier of industrialists and entrepreneurs like Andrew Carnegie, John D. Rockefeller Sr., Henry Ford, J. Paul Getty, W. K. Kellogg and Mr. Gates himself, all men whose fortunes have endowed some of the world's richest private foundations.
Mr. Buffett plans to give away 85 percent of his fortune, or about $37.4 billion, all in Berkshire stock. Of that amount, he will channel the greatest share, about $31 billion, into the Gates Foundation. The Gates Foundation, dedicated to improving health and education, especially in poor nations, is already the United States' largest grant-making foundation, with current assets of almost $30 billion. Mr. Buffett's huge contribution may permanently solidify that philanthropy's standing as the biggest and most influential organization of its kind. Mr. Buffett will join Mr. and Mrs. Gates as a trustee of their foundation. The immense size of the assets at the disposal of the Gates Foundation as a result of the partnership is apparent when compared with the United Nations Educational, Scientific and Cultural Organization, or UNESCO, which had a budget of $610 million for 2004-05. The Gates Foundation made $1.36 billion in grant payments in 2005; at a minimum, Mr. Buffett's contribution may eventually allow the foundation to more than double that amount annually once he transfers all of his stock.
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Mr. Buffett's contribution will not be made all at once, but rather in smaller annual increments. Moreover, the distribution could change in an as-yet unspecified way if Mr. Buffett dies before the entire sum is paid. The terms of the donation also require the continued active participation of at least one of the Gateses for the payments to continue.
The second-largest charitable foundation in the country is the Ford Foundation, with an endowment of $11.6 billion.
Mr. Buffett, 75, and Mr. Gates, 50, have become extremely close business associates and confidants since they met in 1991, and the linking of their fortunes and their legacies through the Gates Foundation marks the latest twist in their friendship. In addition to traveling together and regularly playing online bridge games, the two men routinely seek out each other's advice on personal and business matters.
Mr. Gates, who announced about two weeks ago that he planned to devote less of his time to his role as Microsoft chairman starting in 2008 so he could focus on his foundation, joined Berkshire's board of directors last year. Mr. Buffett is a Microsoft investor through Berkshire, and Mr. Gates said early last year that he personally owned about $300 million worth of Berkshire stock.
Mr. Buffett had insisted that he would wait until his death to make a sizable charitable bequest, but he told Fortune that the death of his wife, Susan, in 2004, his admiration for the Gateses and his certainty about how to dispose of his wealth had caused him to "get going" now.
The donation from Mr. Buffett "continues to increase the size of the Gates Foundation and the size and scope of the projects they can undertake," Mr. Tempel said. "They will have organizational challenges in determining how they manage that, how they create the kind of partnerships and staffing that can carry out the work."
The other charities that Mr. Buffett will divide about $6 billion in stock among are the Susan Thompson Buffett Foundation, which is named after Mr. Buffett's wife and emphasizes family planning, abortion rights and anti-nuclear proliferation issues; the Howard G. Buffett Foundation, which is named after and run by one of Mr. Buffett's two sons and focuses on environmental and conservation issues; the Susan A. Buffett Foundation, which is named after and run by Mr. Buffett's daughter and supports educational opportunities for low-income children; and the NoVo Foundation, which is run by Mr. Buffett's other son, Peter Buffett, and has focused on education and human rights.
Over the last four decades, Mr. Buffett has built Berkshire, which is based in Omaha, into one of the world's largest and most successful insurers. Along the way, he has also assembled a stable of holdings in well-known media, consumer products and energy concerns; navigated the stock market with legendary prowess; and offered folksy, astute guidelines for proper corporate governance and investment savvy.
One of his companies, the General Re Corporation, is the subject of a continuing federal investigation into possible financial crimes. Mr. Buffett has not been accused of any wrongdoing in the matter.
In his letters yesterday to the Gates Foundation and the four other beneficiaries, Mr. Buffett said that he had talented managers waiting to succeed him and that the Berkshire shares were "an ideal asset to underpin the long-term well-being of a foundation" because his company had "a multitude of diversified and powerful streams of earnings, Gibraltar-like financial strength, and a deeply-imbedded culture of acting in the best interests of shareholders."
Fred P. Hochberg, dean of the Milano School for Management and Urban Policy at the New School, which has a large nonprofit-management department, said Mr. Buffett's historic contribution to the Gates Foundation was in character.
"It's egoless," he said. "Warren's name is not on the door."
Chinese philanthropist donates it all
Eccentric developer from humble roots shocks nation by leaving offspring nothing
Mark MacKinnon
Shenzhen, China — From Saturday's Globe and Mail
Published on Friday, Jul. 23, 2010 8:46PM EDTLast updated on Tuesday, Jul. 27, 2010 1:31AM EDT
Yu Pengnian’s journey from poor street hawker to Hong Kong real-estate magnate was already a remarkable one. Then the 88-year-old did something even rarer that shocked many in increasingly materialistic China: He gave it all away.
Saying he hoped to set an example for other wealthy Chinese, Mr. Yu called a press conference in April to announce he was donating his last 3.2 billion yuan (about $500-million) to a foundation he established five years earlier to aid his pet causes – student scholarships, reconstruction after the 2008 Sichuan earthquake, and paying for operations for those like him who suffer from cataracts.
“This will be my last donation,” he announced. “I have nothing more to give away.”
With that endowment, Mr. Yu became the first Chinese national to give more than $1-billion to charity, now having contributed almost $1.3-billion in cash and real estate to the Yu Pengnian Foundation.
In a stunned China, the question came quickly: Wouldn’t his children be angry that he had given their inheritance away? “They didn’t oppose this idea, at least not in public,” the eccentric Mr. Yu says, laughing, when asked the question again during an interview at his foundation’s office atop the 57-storey Penglin Hotel in the southern Chinese city of Shenzhen.
“If my children are competent, they don’t need my money,” Mr. Yu explained. “If they’re not, leaving them a lot of money is only doing them harm.”
To make sure that didn’t happen, he appointed HSBC as his foundation’s trustee and stipulated that none of its holdings could be inherited, sold or invested.
In a society where capitalism is just 30 years old, and charitable giving an even younger concept, Mr. Yu says one of his primary goals in making a show out of giving his money away was to set an example to other rich Chinese. “Everybody has a different view of money. Some do good things with it, some rich people do nothing with it. …My goal is to be a leader, a pioneer who encourages rich people, inside and outside of China, to do something charitable.”
The charitable eccentric
It would be easy to characterize Mr. Yu as an oddball. His hair is dyed jet black and held up in a bouffant. He regularly wears white Mao suits and matching white shoes at which his Western-educated grandchildren quietly cringe. His desk, which sits in the middle of an office he shares with half a dozen of the foundation’s staff, is covered with such oddities as a bowl of plastic fruit, a money-counting machine, and a pair of duelling model fighter planes, one Chinese, one American.
He displays little of his wealth – he lives in the Penglin Hotel and eats most of his meals in the buffet restaurant – but sits beneath a giant smiling portrait of himself. Another giant dinner plate emblazoned with a picture of Mr. Yu sits propped up on his desk, gazing directly at anyone who pulls up a chair across from him.
As offbeat as he may be, it’s hard to question his generosity. Mr. Yu, who is ranked the 432nd richest person in mainland China, has topped the Hurun Report lists of the country’s top philanthropists four years running – and will certainly do so again this year – leading by example as the idea of large-scale giving has quietly taken hold among a growing number of China’s superwealthy.
Rags to riches
Mr. Yu says his passion for charity is a result of his own humble beginnings. Born in a small village in China’s southern Hunan province, he travelled to Shanghai in his youth hoping to find his fortune. Instead, he found himself pulling rickshaws and hawking trinkets on the streets until he was arrested in 1954 – on the false accusation that he came from a family of wealthy landlords – and sentenced to three years in a “thought correction centre.”
After his release, he finally caught a gust of good fortune when he was granted rare permission to travel to Hong Kong. He found a job as a cleaner at a large firm, and even though he spoke no English or Cantonese, slowly impressed his way up into a junior management position, saving everything he earned along the way.
In the 1960s, Mr. Yu and some friends pooled their money together and bought their first property, the beginning of a new career that would see him make millions through shrewd purchases that he would sometimes later sell at 20 or more times the original price. As his holdings grew, he became notorious in Hong Kong as the “Love Hotel King” – a name he detests – because many of the properties he owned were rented by operators of hotels catering to hourly stays. He also won fame for buying the last home that kung-fu star Bruce Lee lived in before his death, a property Mr. Yu later donated back to the Hong Kong government as a museum.
Hard lessons in giving
But in rural China, particularly his native Hunan province, Mr. Yu was developing a very different reputation. When he returned to his hometown of Lou De each year for the Spring Festival holiday, he handed out red envelopes stuffed with cash to the elderly and poor.
Those trips taught him an early lesson about the perils of charitable giving. One year, he enlisted the help of local government officials to help him stuff each envelope with 400 yuan. He found out later that much of the cash had been pocketed by the corrupt bureaucrats, and to this day he insists that the money he donates go directly to the recipients without going through any other charities or government agencies. “In China, I do charity only with my own eyes and hands. I don’t trust others,” he says.
Mr. Yu’s initial foray into wider-scale philanthropy came after he developed cataracts and had a successful operation to repair his eyes in 2000. When he researched the disease afterwards, he found that 400,000 Chinese developed cataracts every year, and many sufferers couldn’t afford the required surgery.
He was deeply moved and decided to spend $10-million annually on mobile cataract clinics that drive to the most remote parts of China to perform surgeries paid for by Mr. Yu. His own oversized photograph – his eyes clear of cataracts – is on the side of the “Bright Eyes” vans, which have carried out more than 150,000 cataract operations around the country since 2003.
Mr. Yu says his latest passion is education. He says he wants the bulk of the money from his most recent endowment, as well as the profits from the hotels and other properties he has donated to the Yu Pengnian Foundation, to go to scholarships. “Some for poor students, others for talented students I want to encourage, including foreign students who want to study in China,” he said. “Education is very important for a country, very closely related to its prosperity and standard of living.”
A legacy project
Mr. Yu is proud to hear his name mentioned alongside such famous Western philanthropists as Bill Gates and George Soros – as well as Hong Kong’s Li Kashing, Asia's most famous philanthropist who has given away $1.4-billion of his estimated $21-billion – but likes to point out that he’s gone a step further than they have by giving away all his money. However, he admits he wasn’t ready to go back to the hard life he lived as a young man.
“I’m not poor, not yet. I still have a credit card – an American credit card – and I take a VIP room in this hotel. And I take business-class flights. I allow myself this,” he says, smiling.
As Mr. Yu speaks, his grandson, Dennis Pang, watches with obvious respect and affection. As someone who was in line to inherit some of the fortune, Mr. Pang admits that he was initially bewildered by his grandfather’s insistence on giving away what he had earned. But then he took a job as his grandfather’s personal assistant, and saw first-hand the good the Yu Pengnian Foundation was doing.
“Before I came here, I was a little confused. But now when I see the people that he helps, I understand that it’s special,” Mr. Pang said. My. Yu’s two sons, both in their 60s, sit on the foundation’s board of directors.
Mr. Yu is pleased to have his family’s support, but says he would have gone ahead with his philanthropy with or without their approval. “I don’t care what others think. It makes me happy to give my money away. I used to be poor.”
6 comments:
I think Mr Yu is overdoing it - the total giveaway is excessive and unnecessary. He should keep certain business assets to generate a continuous stream of income to donate to good causes in his life time. But then perhaps he still controls and runs his charitable foundation personally so his entrepreneurial skills are not lost to society. In Ipoh, Malaysia we have Mr Koon Yew Yin who does his bit for poor bright students in need of scholarships. Such people help affirm there are good people out there. Just not enough to make a major difference.
Many on Forbes richest individuals in the world are from West Asia. What a paradox that Western billionaires are doing more for the poor in thata region than their home grown billionaires. Another major reason why this area will lag East Asia in socio economic development.
The socially-responsible actions of these people at the top of the economic heap are admirable and certainly deserving of applause.
Let's take a look at the opposite end of the scale - the story of people at the bottom of the economic heap.
It's one humdinger of a story - here's a brief introduction:
"Yan Li spent his life tweaking tiny bolts, on a production line, for the gadgets that make our lives zing and bling. He might have pushed a crucial component of the laptop I am writing this article on, or the mobile phone that will interrupt your reading of it.
Li was known to the company by his ID number: F3839667. He stood at a whirring line all day, every day, making the same tiny mechanical motion with his wrist, for 20 pence an hour. According to his family, sometimes his shifts lasted for 24 hours; sometimes they stretched to 35. If he had tried to form a free trade union to change these practices, he would have been imprisoned for twelve years. On the night of May 27th, after yet another marathon-shift, Li dropped dead.
"Deaths from overwork are so common in Chinese factories [it is estimated that] 600,000 people are killed this way every year, mostly making goods for us."
The complete report is found HERE.
better a charitable giveaway that is "excessive and unnecessary" than an excessive and unnecessary spending lifestyle. the fella is a credit to the chinese race.
Has anybody heard of the Carnegie spirit or have read Andrew Carnegie's essay entitled The Gospel of Wealth?
Do check it out if you have the time. It's about giving.
"In a society where capitalism is just 30 years old, and charitable giving an even younger concept"
is this journalist serious? Chinese merchants have been in business for thousands of years, and Chinese philosophies on philanthrophy stretch back to the time of Confucius and before. And this guy just happily comes along and says the Chinese concept of charitable giving is less than 30 years old. ?!?!?!
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