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Next generation of Buffetts is poised to become one of the biggest forces in philanthropy

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Next generation of Buffetts is poised to become one of the biggest forces in philanthropy
September 17, 2024
Article Body Text OMAHA, Neb. — The next generation of Buffetts — Howard, Susie and Peter — is poised to become one of the most powerful forces in philanthropy when their 94-year-old father, the legendary businessman and leader of Berkshire Hathaway, Warren Buffett, eventually passes away. But it wasn't always going to be that way. Buffett announced in June that he would donate his fortune, now valued at nearly $144 billion, to a charitable trust managed by his three children when he dies, instead of giving it to the Gates Foundation, as he indicated 18 years ago. The next generation of Buffetts will then have 10 years to give the money away, Warren Buffett said. In the meantime, the elder Buffett continues to make huge annual donations to the Gates Foundation and his four family foundations, which will continue throughout his lifetime. He first mentioned plans for a new charitable trust in November. Howard Buffett told The Associated Press he's learned what his father told him and his siblings about philanthropy was true: "It's not so easy to give away money if you want to do it smart, if you want to be intelligent about it." The middle Buffett child, Howard said his father is as sharp as ever and that he hopes he lives a long time, adding: "It's pretty amazing that he's giving us this opportunity." Buffett has entrusted Bill Gates and Melinda French Gates with significant annual gifts to their foundation since 2006 — a remarkable $43 billion to date. "Wealthy people don't tend to give their money to other people to give away," said James Ferris, founding director of The Center on Philanthropy and Public Policy at the University of Southern California. But many of the wealthiest people are also hesitant to hand over their fortunes to the next generation over concerns that it hampers their ingenuity, he said. Ferris thinks the story of Buffett's changing philanthropic intentions is a positive one. "It shows how a donor is making choices and is adapting to circumstances," he said. The Gates Foundation did not say when it learned of Buffett's decision or what the impact will be on its budget. It previously said in a statement that "Warren Buffett has been exceedingly generous," and that he has "played an invaluable role in championing and shaping the foundation's work to create a world where every person can live a healthy, productive life." Over the years, Buffett gave the Gates Foundation large annual donations, but also donated billions to foundations run by his three children and a fourth family foundation. Their work offers some insight into the priorities of the next generation of Buffetts. The Susan Thompson Buffett Foundation, named after Warren Buffett's first wife, is the largest in terms of donations. It supports organizations that provide reproductive health care and access to contraception and abortion around the world. Susie Buffett, 71, is its board chair and Peter Buffett, 66, is a board member. Susie Buffett also leads The Sherwood Foundation, a major supporter of early childhood development nationally that gives grants to organizations and projects within Omaha, Nebraska, the Buffetts' hometown. Peter Buffett's NoVo Foundation has been an important funder of organizations advocating for the autonomy of girls and women and against gender-based violence. In 2020, Peter and his wife, Jennifer, decided to reorient their focus, expanding their support for Native American communities and projects to build sustainable, local communities with a focus on agriculture and food access. The Howard G. Buffett Foundation has focused on conflict mitigation and agriculture around the world. Since 2022, it has donated some $800 million — more than most countries — to humanitarian initiatives in Ukraine during the country's war with Russia. These include supporting food distribution at schools, demining activities, and the rebuilding of a major publishing company and a key bridge transporting grain. In a relatively rare interview for a family that seldom makes time to speak with the media, Howard Buffett, 69, said he couldn't predict exactly how he and his siblings would give away their father's fortune. However, he said they would continue to take risks and find ways to make the biggest difference as their father recommended. "I can tell you, we'll sit down in a room when the time comes, and we'll get it figured out pretty quickly," he said, acknowledging that the directive to donate all the money within 10 years was a challenge. The siblings' different ways of thinking and approaches to giving are assets, he said. "What this is going to do is we're going to bring all of our collective experience together," he said. But don't expect to find the family name on a lot of buildings, which the siblings have largely avoid even as they've given away more than $15 billion of their father's money since 2006. Kathleen Enright, president and CEO of the Council on Foundations, said the Buffetts have effectively made philanthropy a family business, with the next generation now seasoned donors who have built enduring institutions in their foundations. "It is a big deal," she said, of the amount of money that the Buffetts are poised to give away, noting that because the fortune will likely continue to grow, they will have to give away highly visible sums to spend it down. The tight timeframe to give away his fortune after his death reflects one of Warren Buffett's longstanding conditions for receiving charitable funding. He has instructed the Gates Foundation and his family's foundations to grant out the full amount they received within a year. The next generation of Buffetts have run their foundations with tiny staffs — much like how Warren Buffett oversees his massive Berkshire Hathaway conglomerate with only about two dozen people at its headquarters in Omaha. Howard Buffett said his foundation employs just 22 staff members. It granted $458.1 million in 2023, according to tax documents. He acknowledged that his "lean" staff puts some limits on their capacity, but said the way they've scaled their work is through creating strong and enduring relationships with other organizations to help implement their ideas. In contrast, the Gates Foundation has one of the largest endowments at $75.2 billion, funded by donations from Bill Gates and Warren Buffett. It employs more than 2,000 people, many of them technical experts all over the world, and is known for making highly directed grants with rigorous reporting requirements. The foundation has said it will wind down its operations within 25 years after its founders' deaths. Howard Buffett said he likes a challenge and thinks that in general, wealthy people should give their money away within their lifetimes, rather than holding it in perpetual foundations. "Somebody is going to spend that money. Somebody is going to give that money away," he said. "So, I would rather do that with my brother and sister and do it together, as a partnership, than see it done any other way."
Content Type Text
Language English
NewsML Media Topics Arts, Culture, Entertainment and Media
Subtitles / Dubbing Available No
Network VOA
Embargo Date September 16, 2024 21:50 EDT
Byline Associated Press
Brand / Language Service Voice of America - English