Giving it All Away
Warren Buffett never made a secret of his decision to Die Broke. Read any profile of the Oracle of Omaha and you will learn about his intention to give away his fortune, estimated at about $44 billion.
It’s the way that Buffett decided to give it away that is making news and may well revolutionize philanthropy.
Many wealthy people create foundations in their name in the hope their money will live after them and solve problems for their community, state, nation or the world.
On a smaller scale, many wealthy people simply leave a bequest in the hope the money will be used for charitable purposes. Some 30 years ago, Oregon banks were managing so many small bequests, their trust officers found they lacked the time and the expertise to manage the money efficiently and comply with the wishes of the benefactors. The Oregon Community Foundation was created to consolidate these small bequests under unified investment management and a small staff that acquired the expertise to see the money was spent as the benefactor requested.
Wealthy Oregonians also created their own foundations to do charitable work. The late supermarket magnate, Fred Meyer, left a large part of his fortune to the Fred Meyer Charitable Trust.
The Fred Meyer Charitable Trust, like most of the foundations of that era, modeled itself after the Ford Foundation, the Rockefeller Foundation and the Carnegie Endowment, with a program staff that developed the expertise to evaluate grant requests and determine where the money would be most effectively spent.
The Bill and Melinda Gates Foundation broke that mold because it had so much money -- $30 billion -- it literally couldn’t give it away fast enough. The Gates’ were forced to pioneer a more efficient mechanism to give money away.
Modern American philanthropy is driven by two major forces -- the desire of wealthy people to give their money away to avoid inheritance taxes and a federal law that requires charitable foundations to give away five percent of their entire endowment annually.
In the go-go 1990s, the stock market was producing double-digit returns on foundation portfolios. Foundations actually had trouble giving away five percent of their holdings productively. Many new tax exempt foundation sprang up in an effort to absorb this enormous flow of cash.
The Pacific Northwest Foundation actually began programs to train foundation boards of directors to be better overseers and managers. PNW also helped other foundations write better quality grant proposals so program officers could decide which foundations might spent money most effectively. But the Bill and Melinda Gates Foundation changed that approach. Instead of hiring a bevy of program executives to evaluate grants and essentially rediscover the wheel, the Gates Foundation simply sent out staff to interview experts in a field and establish a consensus about which person or organization was most likely to solve a particular problem the quickest. If the Gate Foundation board accepted the consensus, that’s the person or organization that got Gates’ grants.
Buffett chose to give a substantial portion of his fortune to the Gates Foundation for a similar reason.
"If you're accumulating wealth, it's very natural to go to somebody you know can handle it better than you can," Buffett explained at a news conference. "I've found some people who are better at giving away money, and I'm turning it over to them."
Gates and Buffett oppose repeal of the inheritance tax. They argue repeal will reduce the incentive of the wealthy to give money to charity. They are also old-fashioned because they believe in the old axiom that “to whom much has been given, of him much is required.”
This is a slap at the Conservative/Libertarian libel that estate taxes are “theft’ of the fruits of capitalist endeavor instead of a means of emphasizing merit over inherited wealth as an driving force in American society.
I also suspect Buffett, a healthy 75, is beginning to feel his mortality.
Asked if he thought it was possible to solve 20 of the world’s major public health problems in his lifetime, Gates said, “I’ll be optimistic and say, absolutely.” Gates is just 50. Gates has 35 years of his life left. Buffett has perhaps 15 years left. Buffett is wise enough to know that no matter how his fortune is spent, he will not live to see the results. Why not leave his money with someone who is young enough and who can use the money wisely enough to see results in his lifetime?
There are a lot of politicians and ideologues who presume to speak for the rich these days when advocating tax cuts that are bankrupting the nation. Perhaps they should sit down and let the rich speak for themselves. The two wealthiest men in America are putting their money where their mouths are.
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July 2, 2006 |
Russell Sadler | Comments (28 so far)
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Posted by: LT | Jul 2, 2006 12:06:08 PM
Politicans by decree speak for all their constituents. They vote based on what they decide is better for the people that elected them to office.
Anon--are you saying that from the day your state rep. or other elected official takes office they "speak" for you and you have no way to disagree with them other than to campaign for their opponent when they run for re-election?
Not how I understand the system--as someone who often called my state rep. last session, often talked to a staffer, rarely had a conversation with the state rep.
Posted by: Ross Williams | Jul 2, 2006 4:01:26 PM
Something I think people should realize, Buffet did not give all his money to the Gates Foundation. He created a foundation in his wife's name that was originally going to be the target of most of his wealth with here deciding where the money would go. She died before him, but he is still putting $5 billion into that foundation. Each of his three children also have foundations that they manage. Apparently each of those will also get $1 billion.
The primary problem in the foundation world is that a few very large foundations have so much power that their program officers for some program areas effectively become the decision makers about what non-profit groups will thrive. In the case of some, like the Bullet Foundation, they even to try to control the strategies themselves by using their money to force agreement among various groups on a common approach before they will fund anything.
It appears that, while giving most of his money to Gates, Buffet is at least creating four other major funders. That is a very positive development. I especially liked a comment I read from one os his children, "If someone gave you $50 million what else could you do with it other than give it away?" Paris Hilton is apparently trying to find out.
Posted by: anon | Jul 2, 2006 4:17:23 PM
No, that's not it at all. Our republic works because of common ground, a representative form of government. It seeks to always recognize those who struggle in crutches & wheelchairs, not just those high on a horse (Buffett & Gates).
Citizens in minority or majority positions on an issue often disagree with votes made or positions taken by their state rep or other elected official. If this includes you, you call them on it and this means getting to work.
There's lots of ways to disagree and to make your case: phone calls, emails, blogs, letters, drop by during office hours, make a point to appear during public appearances. Find others with a like position and continue to do the same. Stand at on-ramps and hold up a sign. Call a press conference if your rep still isn't responding and get yourself some attention. Go around 'em, find another district rep that agrees with your point of view, and ask him/her for help in getting audience with your own rep and parade his/her lack of responsiveness. Get a media rep to go in with you and make a cold call to the rep's office.
Posted by: Ross Williams | Jul 2, 2006 5:54:20 PM
There's lots of ways to disagree and to make your case
This assumes that this is an intellectual discussion where there is some objective criteria by which the merits of arguments are being judged. That may occasionally be the case, but I think it is pretty rare. Decisions are based on balancing the political power of those who hold different views, not by working out the arguments on each side and arriving at the "correct" answer. The arguments have more to do with who makes them and how they play to a broader audience with political power than their inherent intellectual merit. Hence polling and focus groups.
Posted by: boikin | Jul 2, 2006 9:58:33 PM
"Perhaps they should sit down and let the rich speak for themselves."
It seems to me the rich philanthropist would say "Don't wait for the estate tax to suck you dry. They'll waste it."
Not much of an endorsement for your much loved Government and its ability to solve any problem.
Posted by: Larry | Jul 3, 2006 12:03:09 AM
Buffet does not like the 'repeal the estate tax' folks, but uses his lawyers to avoid the estate tax like the plague. He is a hippocritter. Why doesn't he sell his stock, pay his 50% ($20Billion) in taxes, then give the half the government doesn't take to Gate's charity? He is a big time loser.
But a rich one,that is forsure.
Posted by: Ross Williams | Jul 3, 2006 8:55:36 PM
That's a lot of copies of Margaritaville!
Warren Buffet, not Jimmy Buffet.
He is a hippocritter.
Has he taken the hippocritter oath?
Bad puns aside, there is nothing hypocritical about supporting the estate tax and putting your money into charities to avoid paying some of that tax. In fact, one of the reasons to support an estate tax is that it creates a reason for people to give a good portion of their money to public charities instead of to their kids.
Posted by: boikin | Jul 3, 2006 10:02:59 PM
“to whom much has been given, of him much is required.”
Morally required. When the State requires it, it's theft.
Why does a person's money cease to be under his control because he dies? If it's not the product of crime, and reflects a person's thrift, hard work, or concern for family, why does the State assume ownership at any point? Taxes have already been paid. It's arrogant thievery.
Posted by: Bob R. | Jul 3, 2006 11:55:59 PM
When the State requires it, it's theft.
When the State requires it, it's "taxes", not "theft".
Our founding fathers were opposed to "taxation without representation", but were not opposed to "taxation" in general.
You can argue that the estate tax is inappropriate, or spin it and call it a "death tax" if you like, but it is not "theft."
Words mean things.
- Bob R.
Posted by: boikin | Jul 4, 2006 8:02:05 AM
Bob R-
"Theft" is a mild word compared to those used, on this blog, to describe other products of the democratic process, such as the Iraq War, Bush's tax reductions, and certain Supreme Court confirmations. Language becomes less accurate and less of a concern when those subjects are brought up.
Posted by: Mike Austin | Jul 4, 2006 4:05:38 PM
Isn't this a gigantic tax dodge masquerating as a PR bonanza? Won't Buffett's appointees manage the foundation? Isn't it true that control of the wealth stays in the hands of the board of the foundation (and the board almost certainly consists primarily of his family members)? Isn't it true that Buffett is not actually *giving* away 44 billion, but that his estate will be using a percentage of the wealth that that 44 billion creates to fund activities that Mr Buffett approves of? Won't Mr Buffett's heirs still control the wealth?
I hate to sound like a sourpuss, but the entire reason foundations were written into law (at the behest of the robber barons) was to allow the the wealthy to permanently shelter their wealth from taxes, direct public policy through their charitable funding, and reap a tremendous PR windfall. Sure, it beats a sharp stick in the eye. But, as they say, wealth is power, and the only reason to acquire great wealth is to have access to the power that comes with it. Mr Buffett is relinquishing neither his wealth nor his power; he is passing it on to his heirs in a way that is forever tax-free.
Posted by: Bob R. | Jul 4, 2006 4:47:37 PM
While his heirs may have a good deal control over foundation decisions, there are also a good number of laws that deal with how foundation money can and can't be spent.
Although there are a myriad of ways to conceivably extract money from a foundation for personal gain via inflated salaries, relatives on the payroll, grants to friends, inappropriate expense reimbursements, etc., such things won't add up to any significant percentage of the billions of dollars that will be spent charitably.
In other words, a sneaky foundation manager may arrange for themselves a few luxury junkets on a foundation-controlled corporate jet, but they won't be using all the funds to take over an entire airline. They may finagle foundation-funded labor into putting in a pool, but they won't be constructing giant ski resort, etc.
- Bob R.
Posted by: sondra | Jan 14, 2007 6:35:40 AM
hi im not sure how true this is,but here it goes.my husband and i of 22yrs.have the chance to buy a nice piece of propery in manteca calif.for $750,000,however i dont think we will get a loan for that.we both work hard and we desreve this.i know nobody owes me nothing as far as free money,but if people are willing to give it ,i dont mind the help.we have three kids and when im gone i want to be able to leave them somthing
Posted by: arlene | Oct 21, 2007 3:31:10 PM
Wow...this gives me hope. I am a single mom of 2 teenagers. My annual income is only $28,000. Just to live in the past year, I have started using credit cards and not am about $10,000 in debt plus a $200/mo car payment for another 5 years (which is overdue repairs now). Now, I have maxed out all credit and can't pay the bills. I have no savings....yes I work, as much as I can....I am so depressed and with physical disabilities I do as much as possible. I deffinately do not abuse or misuse $ I do not have any of the frills that many waste $ on. We haven't even been on a vacation in 12 years. With two teens...I can only pray for any college opportunities for them and as for christmas ..... well who knows. All this info is all true and I am writing in hopes to get some type of help. I am not a beggar or trying to take from others.....I just need help....any type of help.....teach me what to do.....I am very open to new suggestions. Please help me and my children become financially stable in some way. Thank you
Posted by: ziad moghrabi | Oct 24, 2007 9:12:03 AM
Hi my name is ziad moghrabi Canadian citizen originaly from Beirut Lebanon immigrated to Canada in 1989,married since 25 years with 2 kids,d.o.b 02/12/1957,i come from a very poor familly witch we have lost everything during the lebanese war,came to canada with nothing and have fight for my life and my familly's life for years last 2 years i have opened a samll business and didnt work out,put myself in depts and morgage my house 3 times,i am about to loose my house have dclared personal bancruptcy lately but the problem i am facing that familly they dont know about my faniancial situation i am very very depress and dont know what to do or where to go,looking for job but no luck i am working since more than 6 month and late on all my morgage payment my wife works in a garderie with a very small income she makes only $23,000 per year,my son is 21 yrs and working part time and still in study my daughter is 15 and still at school,i hit a dead end and dont know what else to do i have no familly here in canada and the worse is i have to support my parents back in lebanon witch they have nothing they live under the stairs with my brother and his wife and his 2 kids,i have borrowed money to send to my older brother in lebanon for his cancer treatment but unfortunatly didnt make it he passed away in may 2007 and i didnt have the money to go to lebanon for his funeral,this alone killed me and i was crying blod instead of tears,the dpression level that i ma in now is so high that i see only black infront of me,i have no one to ask him help and when you are in the hole no one cares or look for you,,,they must be someone somewhere in this world who must have a heart or feelings about a humanity,please please i have e.mailed a lots of people asking there help but no luck with that i am bagging whoever is willing to help this familly and help a familly man who loves his familly and willing to die for them just help me please get back on my feet and continue this journey in peace before anything bad happenns....please i am so depressed and cant concentrate on anything if i loose my house and my familly things will go very bad for me,i am raising my voice to all the people to help that poor familly man and his familly just to survive please,,i am in depts for $425,000 canadian dollars and realy dont know what to do i am so depressed that i would rather die than loosing my familly but the only thing is keeping alive that i just wanted to see my kids growing and geting a good life and getting married to see there kids i wish this dream will come true and someone in this univers wil hear my voice and hope will get a positive answer and i will pay him or her back anytime if things get better in the futur please please i am bagging all the people to help me please...this is my contact number 514-886-4004 and my e.mail adress is occasion@zmauto.com or zmauto@hotmail.com thanks for all the ones who read my e,mail thanks for all the ones who will support me morally or financially i will never ever forget that and i wish that all of you will be never in a situation like that in your lives thank you for all of you and hope that someone will be here for me....hope to hear from someone
Posted by: verna lynn konn | Oct 25, 2007 5:40:39 AM
TO WHOM THIS MAY CONCERN,
I AM WRITING TO ASK YOU TO HELP SUPPORT ME ON MY MISSION, WE ARE HAVING A BENEFIT FOR A 24 YEAR OLD YOUNG MAN WHO WAS SERIOUSLY INJURED SUNDAY OCTOBER 7,2007 AFTER TAKING OR RECEIVING A BLOW TO THE BACK OF THE HEAD. GEORGE WAS HOSPITALIZED AND BARLEY ALIVE. GEORGE HAD A FULL TIME JOB BUT HAD NO HEALTH INSURANCE SO WE ARE THROWING A BENEFIT TO HELP THE FAMILY COVER THE COST OF THE ER, ICU,DR,HOSPITAL,NEUROLOGIST, CATSCANS AND MRI EXPENSES.
THIS EVENT REQUIRES A TREMENDOUS AMOUNT OF COMMITMENT AND SUPPORT TO MEET OUR GOAL OF 90,000.000
IF BY ANY CHANCE YOU COULD PROVIDE A DONATION OR RAFFLE ITEMS FOR THE BENEFIT IT WOULD PROVIDE A GREAT TURN OUT IN PROVIDING FOR THE FAMILY.
WE ARE HOLDING THE BENEFIT HOPEFULLY DEC 1 AT THE AMVETS ON JERICHO RD, IN AURORA,IL. WE HAVE AN ACCT SET UP IN GEORGE KONN JR BENEFIT AT CASTLE BANK. AND OUR CONTRABUTIONS ARE COMING IN SLOWLY, HERITAGE HARLEY OF LISLE, WOODSTOCK HARLEY , CONRADS HARLEY, JEWEL, MARCIANO”S PIZZA, AVON, AIR 1 WIRELESS, ST JOSEPH CABINITRY,VIDEO VILLA, STONEFIRE, 4 GET ME NOT FLOWERS, NAPA, ROSATI’S, STEVEN’S, THE VILLAGE PEDDLER,PANERA BREAD,FOX VALLEY HEARTH, YORKVILLE FLORIST, AURORA CYCLE, PARADISE CARWASH, OSWEGO PAINT,AND MANY MORE WE HOPE.
THANK YOU SO MUCH IN ADVANCE, PLEASE LET ME KNOW IF YOU CAN HELP OUT,
VERNA LYNN KONN
SISTER AND CHAIRMAN
505 MARTIN DRIVE,
YORKVILLE,ILLINOIS 60560
630-947-3171
Posted by: Arlene | Nov 3, 2007 3:09:06 PM
In regards to the above note I wrote for help to become financilly independant......my email is arlene_jsph@yahoo.com. Any suggestions are welcome
Posted by: tim lamb | Nov 26, 2007 9:09:41 PM
i am writing this letter to who ever i am about to be at the end of my rope in deipt i am taking care of my wife and son i can't work do to my wife's illness we are taking in about 1100.oo a month and we are not geting any were i need sume help we are not going to have money for christmas this yr. me and my wife annv. is dec. 8 and i can'teven take her out like we used to do my wife has lung cancer a brain tumor she had one removed in 05 she as lost alot of her memory she at one time could get on the computer and go to town now she has to chicken peck like i do she has to use a walker and a wheel chair to get around thank for your help
Posted by: tim lamb | Nov 26, 2007 9:11:11 PM
i am writing this letter to who ever i am about to be at the end of my rope in deipt i am taking care of my wife and son i can't work do to my wife's illness we are taking in about 1100.oo a month and we are not geting any were i need sume help we are not going to have money for christmas this yr. me and my wife annv. is dec. 8 and i can'teven take her out like we used to do my wife has lung cancer a brain tumor she had one removed in 05 she as lost alot of her memory she at one time could get on the computer and go to town now she has to chicken peck like i do she has to use a walker and a wheel chair to get around thank for your help
Posted by: Carl Crowley | Dec 28, 2007 1:25:23 PM
I am 63 years old and a father of 4:
I invested in many online business's trying to make money, however i lost
all my money and make nothing. I am working 2 jobs trying to pay back my
credit card bills. they are trying to garnishy my check's from my jobs. I
just don't make enough to pay them bake fast enough. I am not a bumb, I
just need some money to get caught up. I need about 10000 dollars to help
me get started paying these bills.
Can you help me?
Carl Crowley
carl12_1@juno.com
320 keolu dr.
Kailua,Hawaii
808 291 4021
Posted by: Tim Martz | Feb 16, 2008 2:22:13 PM
I am a single father of 2 and on disability my wife got hooked on Meth and just left us one day. We are in a very bad way financially. We are about to loose our home and have no place to go. If you could see it in your heart to help us I would be very grateful to you.Contact me at survey27money@yahoo.com I would be willing to work for you in whatever way I can. GOD BLESS YOU
Posted by: martha gulliford | Apr 7, 2008 2:28:00 PM
i would like to thanks to you people like you are generous to people in need help. i am one of them. i want my kids to finish their education but financial difficulties is a a way of getting their career that they want. my son i almost w/ his sch. but quit . he is working but not enough to pay his tuition. i would like to help him, but w/ my minimum pay rate i could not afford it. my daughter is asking to co- sign a loan, but my bad credit history is standing in the way.life is hard already is going to get harder if my kids do not have good future waiting.i know i have to make comments, but instead i am writing you my problem. please help if you can. i have 4 kids and they are good kids and smart too.my kids i can be proud of them. we lost our home a year ago because we can not afford payments.now our rent amount is higher and we are struggling every month. in order to pay our rent is to skip our bills and tighten up our food money.or vice versa i will appreciate any help that you can give especially to my kids. keep up the good work. and god bless you!
Posted by: eddie | Sep 11, 2008 6:07:10 PM
ten years a gow i invested in real state with the intention to help my family and friends. just before i was ready to sell the bottom fell out now im working hard to keep what i so hard work for until the marker turns around i need either a loan or a blessing for the amount of one million five hundred thousand i will continue passing the blessing to othersss thaks in advance!!!!!!
Posted by: Norma | Nov 29, 2008 5:22:57 AM
Did really someone answer this comments and really come with some help for this people?
Posted by: Jennifer | Dec 10, 2008 12:14:36 PM
Please consider me for a cash donation of at least $15 000. I am in need of a photo copying machine to continue doing God's work. I do bulk photo copying, of religious articles, booklets, pamphlets and news letters for distribution to the people. Also an unpublished writer of children's stories. see website. At Yahoo www.jkmf.webs.com.
Posted by: Candies | Dec 23, 2008 7:23:05 PM
hello i'm a single mother of two..i would like if you could spare any type of donation to me..because im wish and goal is to have a stable roof over my kids head..and to better ourselves as a struggling family..i'm 21 years of age..i really need a blessing right about now..i couldn't even give my children anything for chrsitmas..i will take anything cash, check anything..if you can find it in your heart that would be nice.....
signed a single mother in georgia
my contact email is candiesjackson@ymail.com
Note: The presence of any individual above does not imply an endorsement by BlueOregon. The selection of faces shown is done by Facebook. Visit BlueOregon on Facebook.
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Posted by: anon | Jul 2, 2006 10:06:28 AM
This article attempts to marginalize tax cut supporters, through the use of a legitimate and solid example (Buffett), however this argument really forgets something.
Politicans by decree speak for all their constituents. They vote based on what they decide is better for the people that elected them to office.
To ask the elected representatives of 300 million Americans (who also have mouths and can walk their talk) to sit down as is suggested here and let only two of life's current top financial winners speak for all of us is impossible, nor would you want them to.