Key Points
-
Warren Buffett is 95 years old, and he realistically knows that he will die sooner rather than later.
-
The Oracle of Omaha is on track to give away his entire stake in Berkshire Hathaway over the next eight years.
-
Buffett’s giving plans have changed because of recent events, but perhaps in a good way.
- These 10 stocks could mint the next wave of millionaires ›
The Ford Foundation, The Hershey Trust, and The Hormel Foundation are just some of the charitable organizations created by company founders or shareholders of major corporations. There are others that don’t include company names. Right now, Warren Buffett, the former CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), is funding his children’s charitable organizations by donating shares of the company he once ran. But the plan is a little different from what it was a few years ago, which may actually be a good outcome from unfortunate events.
Buffett removes the Bill Gates Foundation from the list
For years, Buffett had donated to the Bill Gates Foundation. That is the philanthropic organization created by Bill Gates, the former CEO of Microsoft (NASDAQ: MSFT). However, Bill Gates has been caught up in the Jeffrey Epstein scandal, and Buffett has been distancing himself from the retired technology CEO. That includes stopping Buffett’s regular annual donation of Berkshire Hathaway stock.
Instead, Buffett has decided to give those shares to his children’s foundations, the Sherwood Foundation, the Howard G. Buffett Foundation, and the NoVo Foundation. He is also giving shares to the Susan Thompson Buffett Foundation, a charitable organization named after his late wife. The current plan is for Buffett to give all of his shares to these organizations by the end of 2034, or sooner if he passes away.
What’s notable about such charitable organizations is that they aren’t just giving money away. They normally have employees and boards of directors. So, in effect, Buffett is funding jobs, including for his children, grandchildren, and likely future generations beyond that. The goal of all of those jobs is to do good things with the wealth that Buffett created during his lifetime. It’s a win/win outcome for the Buffett family and for the world at large.
Diversification in giving
While the situation surrounding the shift in Buffett’s giving plans is unfortunate, the outcome could actually be better. Instead of focusing most of his giving on one charitable group, he has now spread it more broadly across five.
Buffett spent years building his wealth, and the world is likely to benefit for generations to come. And now there’s a greater opportunity to spread the philanthropic effort, since each foundation he supports or has supported is likely to pursue different giving goals. Diversification is good for an investment portfolio, and it is likely to be good for a “giving portfolio” as well.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 931%* — a market-crushing outperformance compared to 210% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool has a disclosure policy.
