15 Surprising Facts to Put Buffett's Giving Into Perspective

Seven years ago, Warren Buffett began steadily giving away the bulk of his fortune. Here are 15 facts to help us grasp what that means.

1. In 1997, Warren Buffett told Janet Lowe, the author of Warren Buffett Speaks: Wit and Wisdom From the World's Greatest Investor, the following:

The way I see it is that my money represents an enormous number of claim checks on society. It is like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that, though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die.

2. Sure enough, less than a decade later in July 2006, Buffett began his quest to ultimately give away 99% of his vast fortune, beginning with a gift of 30,125,000 Class B shares of Berkshire Hathaway  (NYSE: BRK-A  )   (NYSE: BRK-B  )  (adjusted for the stock's 50-for-1 split in 2009).

3. Though the number of shares Buffett gives away each year falls by a pre-determined 5%, Buffett knows all-too-well their value should steadily increase over the long term as Berkshire Hathaway stock continues its market-dominating ways.

4. To date, Buffett has given away a total of more than 204.62 million Class B Berkshire shares, currently worth nearly $24 billion based on Berkshire's recent Class B closing price just above $117 per share.

5. That exceeds the current $14.7 billion median market capitalization of all companies comprising the S&P 500 index by more than 60%. Need more perspective? That's also larger than the total market caps of both Corning  (NYSE: GLW  )  and Activision Blizzard  (NASDAQ: ATVI  ) , which earlier this week stood tall at $22.2 billion and $19.5 billion, respectively. 

6. Buffett's total gifts so far also exceed the 2012 nominal gross domestic product of 86 countries, as reported by the International Monetary Fund last year, including El Salvador, Estonia, Jamaica, Iceland, and Afghanistan.

7. The primary beneficiary of Buffett's giving is the Bill and Melinda Gates Foundation, which last month received more than 76% of the total 22,870,529 gifted shares allocated for 2013.

8. In March, Forbes ranked Buffett the fourth-richest person in the world, with a net worth of roughly $53.5 billion, trailing only Carlos Slim at $73 billion, Bill Gates at $67 billion, and Amancio Ortega at $57 billion. 

9. Thanks to Berkshire's 31% rise so far this year, however, even after last month's giving, Buffett's remaining 20% stake of the company is currently still worth about $57 billion.

10. Simple arithmetic also tells us if Buffett had chosen not to give away his money in the first place, he would easily be the richest person alive today, with a net worth of roughly $81 billion.

11. In addition to the Bill and Melinda Gates Foundation, four other charitable groups receive annual gifts. These include the Susan Thompson Buffett Foundation (named for Buffett's first wife), as well as three organizations run by his children in the Howard G. Buffett Foundation, the Novo Foundation, and the Sherwood Foundation.

12. Last August, Warren Buffett sent a warm letter to his three children, applauding them for exceeding his high expectations and applying their "considerable brains and energies in order to make the most of the funds from [his] gift." In the letter, Buffett also told them he had decided to double his original pledge for each of their charitable foundations, the effects of which were reflected in this year's gift.

13. On the perfect amount of money to leave his children, Buffett says, "I want to give my kids enough so that they could feel that they could do anything, but not so much that they could do nothing."

14. Relatedly, Buffett is a firm opponent of repealing the estate tax, which can run upwards of 55% when you include both the federal and state portions. Repealing this tax, Buffett argues, would wrongly pass down the ability to "command the resources of the nation based on heredity rather than merit." Put another way, he compared it to "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."

15. Through The Giving Pledge, which he co-founded with Melinda Gates in 2010, Buffett has so far persuaded 114 other wealthy families and individuals to follow his lead by "giving more than half of their wealth to philanthropy or charitable causes either during their lifetime or in their will." Those who have pledged so far include activist investor Bill Ackman, Microsoft co-founder Paul Allen, Virgin Group founder Richard Branson, Oracle co-founder and CEO Larry Ellison, Netflix's Reed Hastings, and noted investor Carl Icahn.

Of course, if you'd like to have the enviable problem of trying to figure out the best way to give away your vast wealth, you'll need to accumulate it first!

As Buffett has shown us time and again, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 17, 2013, at 5:06 PM, dcshow wrote:

    how smart, get your kids/family to open up charities/non profits. And donate money to their charities yearly so as to avoid the estate tax upon your death. While still getting a tax break from uncle sam. And we wonder why obama hasn't made any progress on capping charitable donations. Rich and their kids keep getting richer.

  • Report this Comment On August 17, 2013, at 5:30 PM, Bmayo32 wrote:

    Dcshow,

    As the article states, Buffett actually supports the estate tax. And, he's leaving a lot of money to their charities, but not tons (though plenty I'm sure) directly to his kids.

    A guy that's giving away 99% of all the money he's ever saved gets the benefit of the doubt from me.

  • Report this Comment On August 17, 2013, at 8:20 PM, dcshow wrote:

    Not saying hes doing anything i or you wont do. just pointing out that like u said hes giving away 99% of all the money hes ever saved to his kids while avoiding the estate tax, and on the flip side vocally supporting the estate tax.

  • Report this Comment On August 17, 2013, at 10:22 PM, inreality01 wrote:

    and the rest of the story...........

    Don't forget all the horrible things this man does, don't believe he is all about giving and altruistic actions.

    He lobbies hard for the estate tax (ie, death tax), why is that? His assets are protected, he could give away all his money, he could write a huge check to the government every year....... why doesn't he? Why does he want everyone else to pay the estate tax?

    Well, one reason is that his businesses go around and buy up family run companies that can't afford to pay the estate tax. They turn the companies around for a profit.

    Buffet also tries to get out of paying as much taxes as he can. Now, I'm not blaming him, everyone should legally try to keep as much of their own money as they can. But don't believe he is all about others, this is far from the truth.

    I'm not anti-business or anti-wealth, just the opposite. I do, however, despise wealthy people that try to prevent others from becoming wealthy or hurting others based on their own personal agendas.

    Buffet is a complex individual with many faces.

  • Report this Comment On August 18, 2013, at 4:54 AM, ryanchandler25 wrote:

    @inreality01

    How in the world is Buffett preventing anyone from becoming wealthy?

    All you're talk is nothing but drivel. Buying up family businesses because they cannot afford to pay the estate tax? That's a laugh. The companies Buffett buys, whether they are public or private, are thriving companies, not companies whose owners cannot pay the estate tax. Buffett does not do acquisitions as turn around plays.

    Perhaps you can provide some sources as to your accusations that Buffett lobbies hard for the estate tax. Is an amount disclosed anywhere, like in Berkshire filings? Lobbying and stating an opinion on it are two different things.

    As far as Buffett writing a check to the government, do you think that would be a better use than to give it to a charity as top notch as the Bill and Melinda Gates Foundation? I don't.

    You claim to not be anti-wealth, but people like you always find sinister reasons why someone else is rich and excuses as to why you're not.

  • Report this Comment On August 18, 2013, at 7:54 AM, triple33 wrote:

    Buffett is free to say and do as he wishes, but let's acknowledge that he and the rest of the Forbes 400 play by a different set of rules. They have access and the ability to take advantage of laws, opportunities and politicians that the rest of us can't. Buffett and Gates like to lobby for higher taxes (ordinary, estate, whatever) but, those taxes are not going to impact them. Kind of hypocritical to me.

    Let's be fair to all:

    10% income tax on any type of income (individual, business, corporate, capital gains, etc.) with first $30,000 exempt per individual - no other deductions beyond business expenses., i.e. married couples (gay or straight) would exempt $60,000 - no marriage discrimination.

    10% national sales tax with every tax filer getting up to $3,000 check from gov't to exempt up to 1st $30,000 (based on previous year filed taxed return). The unreported cash economy is huge!

    10% net worth tax on individual assets above $1.1 billion including charities owned/controlled by an individual (they build themselves buildings and put their art collections in them with lavish perks for themselves.) Now that is progressive! So Bill Gates has personal NW of $54 billion plus controls his charity of $25 billion, so he would owe a tax of $7.9 billion on his $79 billion. Every year until he gets to $1.1 billion! Warren Buffet said that once you reach $500 million in NW there is pretty much nothing you can't buy. With the exemption of $1.1 billion Bill Gates and the like will still have plenty of NW left to rule the world! Think of it like property taxes on your house.

    10% inheritance tax above $10 million - eliminate all trusts and other tax dodges.

    Limit the tax code to 100 pages. It may have to be small 7pt font, but the current version is written for the Forbes 400.

    Ten percent is easy to calculate!

  • Report this Comment On August 18, 2013, at 10:27 AM, ryanchandler25 wrote:

    @triple33

    I think you are confusing the term lobbying with voicing an opinion. Writing an article about increasing tax rates for top earners isn't lobbying for tax increasing. You might say he was advocating higher income tax, not lobbying for them in the traditional sense of the word.

    And all the other stuff you're advocating regarding taxes, isn't really applicable to the discussion. The fact is that he played by the rules of the game and had chosen to give nearly all his wealth to charity instead of children or hording it his family.

    So you can say, that he should be taxed and all of his net worth except $500 million should be taken away by the government, but the fact of the matter is his wealth is going to fund very good things for humanity. Let's not forget that he doesn't have to give away a dime to charity.

  • Report this Comment On August 18, 2013, at 5:14 PM, inreality01 wrote:

    Ryan, your simply wrong. You need to check your facts. By the way, Buffet & his friends can write big checks to the government any time they want, so why don't they? Why do they want everyone else to pay more? Just give, give, give Mr. Buffet. Seems very simply.

    http://www.forbes.com/sites/peterjreilly/2012/12/11/warren-b...

    http://www.bloomberg.com/news/2012-12-11/buffett-joins-soros...

    "critics have argued that Buffett (through Berkshire Hathaway) has a personal interest in the continuation of the estate tax, since Berkshire Hathaway has benefited from the estate tax in past business dealings and had developed and marketed insurance policies to protect policy holders against future estate tax payments"

    I think Mr. Buffet is generous in many areas of his life and that is great. I despise the side of him that wants others to pay more because he feels it is right. He is smart enough to know government doesn't create anything, it only consumes. So, why advocate more taxes and more government? Well, that's what leftist do.

    So, what is your tax advice Ryan? Do you think government is the answer to our ills? Do you think citizens don't pay enough in taxes? Do you think government spends too little? Should all citizens pay a simple flat tax or should some be punished more than others? Just curious on your philosophy on individual freedom, economic liberty and government.

    God Bless America.

  • Report this Comment On August 19, 2013, at 11:05 AM, RouteReflector wrote:

    <<He is smart enough to know government doesn't create anything, it only consumes.>>

    Ironic statement to write on the internet.

  • Report this Comment On August 19, 2013, at 4:33 PM, TMFOrangeblood wrote:

    Funny stuff from the last annual meeting:

    Warren: "I give away 4.75% of my stock every year. That's $2 billion of stock. That's less than 1% of Berkshire. One percent is absolutely peanuts."

    Charlie: "There's nothing so insignificant as an extra $2 billion to an old man."

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