June 26, 2006 3:22 PM PDT

Buffett donates his billions to Gates foundation

Billionaire investor Warren Buffett plans to distribute more than $30 billion of his stock to the Bill and Melinda Gates Foundation.

Buffett, 75, plans to commit 10 million class B shares of his company, Berkshire Hathaway, to the Gates Foundation. They will be distributed at a rate of 5 percent of the balance annually. Based on the current value of the stock, Buffett's commitment is more $30 billion, which doubles the size of the funds available to the Gates Foundation.

The Gates Foundation will ultimately receive 85 percent of Buffett's personal wealth, rather than the investor's three children or the foundations that they run.

"My kids were elated when I told them (about the Gates Foundation donation). They knew my views on inherited wealth and shared them," Buffett said during a press conference on Monday. "I believe in equality of opportunity...They should not inherit my position in society, based on the womb that they were born from."

Buffett, a long-time friend of Gates, said he chose to allocate the bulk of his wealth to the Gates Foundation after becoming familiar with the organization and the results it had achieved, based on dollars invested.

"The results are terrific," Buffett said.

The Gates Foundation focuses on global health issues, such as the GAVI Alliance to distribute vaccines to children in poor countries, and education, such as the United Negro College Fund Gates Millennium Scholars Program.

"We've known Warren since 1991, and it is his view that wealth should go back to society that got us thinking of our own foundation," Gates said during the press conference.

While Buffett will serve as a director on the Gates Foundation, he said he prefers spending his time as a professional money manager at Berkshire Hathaway and leaving the details of investing his charitable contributions to others.

When investing, Buffett said he seeks companies that are easy to understand. But the billionaire noted that philanthropy is the opposite. He said it requires a willingness to take large risks to fix complex problems that others have likely failed trying to solve.

The Gates Foundation not only faces that challenge but also the challenge of doubling the level of its funding to charities.

"It'll be a big challenge to make sure we're using the money in the right way," Gates said. "We'll be giving away (a combined) $3 billion a year and will do our best to make sure all the money is well spent."

The Gates Foundation plans to delve deeper in its existing areas of focus, Melinda Gates said during the press conference. It will also possibly expand into other issues, such as microlending in order to help poor regions become more self-sufficient in agriculture and biotech, she said.

She added that despite Buffett's financial commitment, the Gates Foundation will continue to partner with other charitable foundations to maximize financial resources and lessons learned. The Gates Foundation, for example, works with the Michael and Susan Dell Foundation to invest in Texas schools, as well as the David and Lucile Packard Foundation to deliver medicines in India.

Buffett's financial commitment to the Gates Foundation is also contingent upon either Gates or his wife remaining actively involved in the organization. Earlier this month, Gates announced that in two years, he will be stepping down from his daily involvement with Microsoft as its chief software architect, in order to concentrate on the foundation full-time.

Reuters contributed to this report.

See more CNET content tagged:
Warren Buffett, wealth, foundation, press conference, health

31 comments

Join the conversation!
Add your comment
Bill Gates and Warren Buffet
These men will be remembered as legends. Their generosity goes a far way and sets an example for the billionaires of tomorrow.
Posted by FitimBlaku (6 comments )
Reply Link Flag
Bill Gates and Warren Buffet
These men will be remembered as legends. Their generosity goes a far way and sets an example for the billionaires of tomorrow.
Posted by FitimBlaku (6 comments )
Reply Link Flag
It's not only about generosity
Bill Gates has been very smart in making use of this money, applying it where it can make a long term difference instead of just trying to look good.
That, combined with the sheer amount of money they are donating, can make a really good change to the world. I hope others join in.
Posted by herby67 (144 comments )
Link Flag
Gates leads by example, Buffet and others will follow
Bill Gates stepping down from daily duties at Microsoft may be the best thing he has ever done. Warren Buffet giving his vast fortune to the Bill and Melinda Gates Foundation sets an example for other billionaires. Maybe Paul Allen, Steve Ballmer, and others will follow.

I wrote a blog about the Gates Foundation, their charter, and what they have done. No libraries, art museums, and concert halls for the rich, but real humanitarian aid for the poorest and neediest people in the world. <a class="jive-link-external" href="http://dondodge.typepad.com/the_next_big_thing/2006/06/the_bill_and_me.html" target="_newWindow">http://dondodge.typepad.com/the_next_big_thing/2006/06/the_bill_and_me.html</a>
Posted by Don_Dodge (64 comments )
Reply Link Flag
Paul Allen has set his sights on the future in a different way
He's promoting space exploration with his money. That's not as immediate as the Gates foundation but it has the potential to make a big difference in the long run.
Posted by aabcdefghij987654321 (1721 comments )
Link Flag
So what if you wrote a blog
Spamvertise somewhere else. You are almost as lame as the "article root" losers who have seem to be doing this in the last few months.
Posted by kieranmullen (1070 comments )
Link Flag
How about..
..donating your money as tax write off. There are those like you and then there are those like Gates.
Posted by FutureGuy (742 comments )
Reply Link Flag
sorry meant this as a reply to
..
Posted by FutureGuy (742 comments )
Reply Link Flag
Gates steps down
Gates steps down a week later Buffett pledges 30 Billion. Coincidence? I don't think so

<a class="jive-link-external" href="http://sqlservercode.blogspot.com/" target="_newWindow">http://sqlservercode.blogspot.com/</a>
Posted by SqlserverCode (165 comments )
Reply Link Flag
Coincidence
8 hotdog buns in a bag, 10 hot dog weiners in a pack. A coincidence? I don't think so.
Posted by Seaspray0 (9714 comments )
Link Flag
just makes me proud
Just makes me proud that I lived during the times of people like Gates &#38; Buffett.
Posted by YankeePoodle (785 comments )
Reply Link Flag
they are the good guys
Sam Walton died with a net worth of $55 billion. He just left it to five heirs - so they can continue to hoard it. His money, his choice - but it's nice to have guys like Gates and Buffett to set good examples.
Posted by news_reader (32 comments )
Link Flag
Why not give it to the Salvation Army?
It seems like such a waste to give it to the Bill Gates Foundation. The money could be used very efficiently in America by the Salvation Army. I'd rather see the money used to provide assistance to America's poor than it used for ineffective AIDS programs in Africa.
Posted by lingsun (482 comments )
Reply Link Flag
Whatever.
America's poor are richer than Africa's rich.
And, suggesting that the AIDS programs in Africa are ineffective
without backing it up with empirical evidence is irresponsible,
dismissive, and just plain pointless.
Posted by ronjay (109 comments )
Link Flag
why not the salvation army?
hes a liberal and had even given money to such cases as planned parenthood
Posted by newcreation (118 comments )
Link Flag
An extreme mismatch?
I never saw such different people come together like this in my life. W.B.; A highly respected person, and a low-life like Bill Gates. Excuse me Bill, but you can't buy your salvation. You should be in jail.
Posted by 206538395198018178908092208948 (141 comments )
Reply Link Flag
An extreme mismatch?
I never saw such different people come together like this in my life. W.B.; A highly respected person, and a low-life like Bill Gates. Excuse me Bill, but you can't buy your salvation. You should be in jail. Any money you have was obtained illegaly, and at the expense of society.
Posted by 206538395198018178908092208948 (141 comments )
Reply Link Flag
You sir,
are a complete idiot.
Posted by erictn (1 comment )
Link Flag
I hope Buffet knows what he's doing
Many Gates Foundation donations are not real money donations. Many of these are $100,000 in cash and $1,000,000 in Microsoft Software licenses.

I know Buffet is a smart man, for his sake I hope he put clauses in his donation agreement that his money is not for "buying" Microsoft products then donating the software, but for direct donations to the recipients.

If not, he just bought $30 Billion worth of software licenses, whose main benefit will be to lower the global piracy rate for Windows software by a few tenths of a percent.
Posted by Maccess (610 comments )
Reply Link Flag
I am guessing he does...
...they don't call him the "Oracle of Omaha" for nothing!!! If Gate's foundation is routing money to MS there would have been more then you talking about it. I am guessing he did his homework before pleading a wopping 30 billion.
Posted by FutureGuy (742 comments )
Link Flag
Fun with English
&gt;&gt;The Gates Foundation will ultimately receive 85 percent of Buffett's personal wealth, rather than the investor's three children or the foundations that they run.&lt;&lt;
Are we to believe that The Gates Foundation accepts children as donations? Similarly, do children have a specific tax deduction associated with their donations to charitable organizations?
Posted by Christopher Hall (1205 comments )
Reply Link Flag
Well...
I know that when I tried to donate MY three kids to PETA, I did NOT recieve any kind of tax deduction... just a visit from family services.
Posted by handdrawn (8 comments )
Link Flag
More fun with english
"do children have a specific tax deduction associated with their donations to charitable organizations?"

Of course! It's called child support, but you have to pay it rather than receive it. The ex-wife will be an extremely charitable organization when she receives it.
Posted by Seaspray0 (9714 comments )
Link Flag
Dear Sir
I am Anil Kumar from India. I am 26 years young male. I am married and have a 9 months daughter. I am B.A. degree holder from Maharishi Dayanand University Rohtak. After complete my degree I appointed a Government job at IGI Airport New Delhi. Four year doing job, I left this job and started my own business. My business is manufacturing of cotton hand gloves which used in automobile companies. I purchase a500 sq. miter Industrial plot at Khushkhera (Bhiwadi) Rajasthan and started my business with setup two knitting machine. For this work I borrow $125.000.00 to a person against my agriculture land and my home than I started my business. But my misfortune I cannot get money anyway. I went go my near bank also but they give me a loan of $37500USD, it is not enough. If I not pay money this person, he I left my land and my house, his due date is 25june 2008. So I request you to please help me to save my house and precede my business. I am very thanks full you. Please help me.
Thanks
Firm name M/s Lina Gloves
Prop.
Mr. Anil Kumar
Home Address
Village Sunaria P.O. Tatarpur (Ist.)
Distt. Rewari (Haryana)
India
PIN CODE 122502
Mobile +91-9812447003
Account number 02501000081236 HDFC Bank Rewari
Swift code BOFAUS3N
Correspondence account no 6550492079 Bank of America
PAN No. ARXPK7790H
E-mail- linagloves@yahoo.com
Posted by linagloves (1 comment )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.