How to Give Away $150 Billion
- A version of this article first appeared in CNBC's Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer.
- When Peter Buffett learned that he and his siblings would be in charge of giving away the fortunes of their father, Warren Buffett, his response was clear.
- "I called him up and said,'I want to opt out.' He said,'I don't blame you.' It obviously puts an enormous amount of pressure on us."
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions,straight to your inbox.
When Peter Buffett learned that he and his siblings would be in charge of giving away the fortunes of their father, Warren Buffett, his response was clear.
“I did not want it,” Peter Buffett told CNBC. ”I called him up and said,’I want to opt out.’ He said,’I don’t blame you.’ It obviously puts an enormous amount of pressure on us.”
In 2024, Warren Buffett announced that after his death, his fortune would be directed to a new charitable foundation overseen by his three children, Susan A.(Susie) Buffett, Howard G. (Howie) Buffett and Peter Buffett. The 95-year-old’s wealth is now estimated at more than $150 billion, according to Bloomberg.
Adding to the challenge, the legendary investor requested that all the money be given away within 10 years of his death. Another catch: All three must unanimously agree on how to disburse the funds.
The magnitude of Buffett’s wealth means his children will need to give away at least $15 billion a year, which would equal about 4% of annual charitable giving in America, according to data from Giving USA thru 2024. The amounts are likely to increase even further with time, as Buffett’s fortune continues to grow.
“It’s something nobody has done, certainly not as a family,” Howie Buffett said.
Adds Susie Buffett: “It’s just so much money.”
The bequest has suddenly thrown the low-profile buffett children into the spotlight. After Warren Buffett’s death, Susie, Howie and Peter will become three of the most vital philanthropists in the world, scrutinized by the media, widely followed by other wealthy donors and barraged with requests for funds.
In a rare interview with CNBC’s Becky Quick, the three buffett heirs said their world view, priorities and approach to philanthropy began in the Buffett household. While their father’s wealth was starting to grow, the children lived a middle-class or upper-middle-class life. They took the bus to public school every day. They did chores for an allowance and had jobs.
Warren Buffett drove a blue volkswagen bug when they were growing up, they said. Their mom, Susan T. Buffett, volunteered for various groups and hosted exchange students from around the world. When Susie Buffett was in elementary school, she recalls she had to fill out a census form listing her father’s occupation and her mother told her to write “security analyst.”
“I thought he checked burglar alarms,” Susie Buffett said.
The Buffett Family’s Philanthropic Approach
The Buffett family, renowned for it’s investment success, approaches philanthropy with a pragmatic focus on versatility, risk-taking, and learning from failures, as highlighted in a recent discussion with susie and Howie Buffett. This approach allows them to navigate complex global challenges and adapt to rapidly changing circumstances.
flexibility in Grantmaking
The Buffett family prioritizes adaptability in their philanthropic endeavors, recognizing that conditions on the ground can shift quickly, especially in unstable regions. This flexibility is crucial for effective program implementation and impact.
Howie Buffett emphasized the necessity of working with governments, acknowledging their inherent instability, especially when funding programs in Africa. He noted the need for adaptability in regions prone to rapid change, citing Eastern Congo as an example. Susie Buffett recalled a moment illustrating this point, stating, “‘I’m dead,'” Susie buffett recalled.
Embracing Risk and failure
Philanthropy serves as the “risk capital of the world,” and foundations must be willing to make substantial investments, even if those investments don’t always succeed.
Howie Buffett advocates for larger philanthropic bets, accepting that failures are certain. Susie Buffett echoed this sentiment, stating that setbacks can be valuable learning opportunities. She added that the family’s location in Omaha, Nebraska, provides a degree of insulation from public scrutiny, fostering a more experimental environment. Susie Buffett’s staff has expressed thankfulness for this freedom, stating, “‘It’s refreshing to be in a place were we can screw up, we can make a mistake,'” demonstrating a culture that values learning through trial and error.