Warren Buffett gives away his fortune

WOW!!!!! This is BIG!!! Warren Buffett just announced (in the cover story of the latest Fortune magazine, written by long-time Buffett friend and legendary reporter Carol Loomis) that he is giving away, starting NOW (not, as was his previous plan, upon his death), 85% of his stock in Berkshire Hathaway, 5/6ths of which will go to the Bill & Melinda Gates Foundation (which, in my opinion, is the most amazing foundation in the world).

I am SO THRILLED about Buffett's new approach, as there will be immeasurable benefit to millions of Africans dying needlessly of preventable diseases like malaria and millions of mostly inner-city schoolchildren in the United States, who are being consigned to miserable lives due to horribly failing, bureaucratic, dysfunctional, unaccountable public school systems in their cities.

In my email on philanthropy a week or so ago, I cited both Buffett and Gates as philanthropic examplars and wrote: "I think that 100 years from now, Bill Gates will be remembered more for his philanthropic accomplishments than for his business ones. I think every person who’s been fortunate enough to accumulate extreme wealth should want a similar legacy." I now think that Buffett too may well be remembered by future generations as one of the all-time most important philanthropists.

Three cheers for both Buffett and Gates!!!

Here's my favorite part of Carol Loomis's interview with Buffett:

Well, when we got married in 1952, I told Susie I was going to be rich. That wasn't going to be because of any special virtues of mine or even because of hard work, but simply because I was born with the right skills in the right place at the right time.

I was wired at birth to allocate capital and was lucky enough to have people around me early on - my parents and teachers and Susie - who helped me to make the most of that.

In any case, Susie didn't get very excited when I told her we were going to get rich. She either didn't care or didn't believe me - probably both, in fact. But to the extent we did amass wealth, we were totally in sync about what to do with it - and that was to give it back to society.

In that, we agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society. In my case, the ability to allocate capital would have had little utility unless I lived in a rich, populous country in which enormous quantities of marketable securities were traded and were sometimes ridiculously mispriced. And fortunately for me, that describes the U.S. in the second half of the last century.

Certainly neither Susie nor I ever thought we should pass huge amounts of money along to our children. Our kids are great. But I would argue that when your kids have all the advantages anyway, in terms of how they grow up and the opportunities they have for education, including what they learn at home - I would say it's neither right nor rational to be flooding them with money.

In effect, they've had a gigantic headstart in a society that aspires to be a meritocracy. Dynastic mega-wealth would further tilt the playing field that we ought to be trying instead to level.

And I really want to draw attention to this, which mirrors my thinking as well:

And frankly, I have some small hopes that what I'm doing might encourage other very rich people thinking about philanthropy to decide they didn't necessarily have to set up their own foundations but could look around for the best of those that were up and running and available to handle their money.

People do that all the time with their investments. They put their money with people they think are going to do a better job than they could. There's some real merit to extending that thought to your wealth, rather than setting up something to be run after your death by a bunch of old business cronies or a staff that eventually comes to dictate the agenda.

Some version of this plan I've got is not a crazy thing for some of the next 20 people who are going to die with $1 billion or more to adopt themselves. One problem most rich people have is that they're old, with contemporaries who are not at their peak years and who don't have much time ahead of them. I'm lucky in that respect in that I can turn to younger people.

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Warren Buffett gives away his fortune

FORTUNE EXCLUSIVE: The world's second richest man - who's now worth $44 billion - tells editor-at-large Carol Loomis he will start giving away 85% of his wealth in July - most of it to the Bill & Melinda Gates Foundation.

By Carol J. Loomis, FORTUNE editor-at-large

June 25, 2006: 1:42 PM EDT

http://money.cnn.com/2006/06/25/magazines/fortune/charity1.fortune/index.htm

NEW YORK (FORTUNE Magazine) - We were sitting in a Manhattan living room on a spring afternoon, and Warren Buffett had a Cherry Coke in his hand as usual. But this unremarkable scene was about to take a surprising turn.

"Brace yourself," Buffett warned with a grin. He then described a momentous change in his thinking. Within months, he said, he would begin to give away his Berkshire Hathaway fortune, then and now worth well over $40 billion.

This news was indeed stunning. Buffett, 75, has for decades said his wealth would go to philanthropy but has just as steadily indicated the handoff would be made at his death. Now he was revising the timetable.

"I know what I want to do," he said, "and it makes sense to get going." On that spring day his plan was uncertain in some of its details; today it is essentially complete. And it is typical Buffett: rational, original, breaking the mold of how extremely rich people donate money.