Warren Buffett donation to the Gates Foundation

You have probably read everything you want to about Warren Buffett's decision to donate about $37 billion (£20 billion) to the Bill & Melinda Gates Foundation. (If not, go read what my colleague Ruth Levine has written on our global development policy blog, Views from the Center.)

I offer two additional thoughts.

  • First, it is very refreshing to see somebody decide to support an existing, effective institution rather than start a new one.  The world does not need more development institutions and more donors.   Very rich men are often filled with a combination of irrepressible self-belief and large egos, and as a result want to establish their own foundations, in their own name. By backing the Gates Foundation, Warren Buffett has shown rare and commendable humility.
  • Second, Greg Mankiw picked up in his blog yesterday that even this massive individual donation is small by comparison with what governments can do to reduce poverty by making changes in the international trading system:

    In other words, success in the Doha round of international trade talks would give the world more every year than what Buffett can give once after a lifetime of being the world's most successful investor.

(Full disclosure: my employer, the Center for Global Development, receives grants from the Bill & Melinda Gates Foundation).

3 thoughts on “Warren Buffett donation to the Gates Foundation”

  1. I made this point over at the CGD blog, but it’s worth pointing out that the estimated gains to the poorest countries from that trade deal are only about $1 billion, not much more than what the Gates Foundation spent on global health programs in 2005.

  2. "Very rich men are often filled with a combination of irrepressible self-belief and large egos, and as a result want to establish their own foundations, in their own name."

    I think the cause there has a great deal more to do with the incentives of the US tax system for a family controlled foundation. In effect, give away 5% of the assets each year (which can include payment to family members for "managing" the foundation) and there are no capital, inheritance or income taxes on the investments. Kennedys, Rockefellers, Fords, Hewletts and so on benefit from this mightily to the nth generation.

    I was always worried that Buffett was going to do exactly the same with his money )why worried? Well, his espousal of the estate tax for example, for as we all know, for the truly wealthy this is all too easy to avoid.). As indeed he has with $6.7 billion of it, which should be enough to keep his descendents going.

    That the bulk (5/6 ths) is going to a foundation not controlled by his family is the (entirely good and laudable) surprise here.

  3. I wonder whether any philanthropist will again have such a good idea as Carnegie’s one of  opening libraries.

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