Warren Buffett Gives It Away

Warren Buffett, the 'Oracle of Omaha' has decided that he's going to give the bulk of his considerable fortune away to charity. The overwhelming majority of that donation will be to the Bill and Melinda Gates Foundation.

With Warren Buffett's announcement that he will be sending about $1.5 billion every year to the Bill & Melinda Gates Foundation, the charity has a new, happy challenge: how to distribute twice as much money each year.

In a letter dated Monday, Buffett told Bill and Melinda Gates that the first donation of Berkshire Hathaway Inc. stock would go to the foundation next month.

The foundation, which has assets of $29.1 billion, spends money on world health, poverty and increasing access to technology in developing countries. In the United States, it focuses on education and technology in public libraries.

The money from Buffett, 75, comes with a significant catch. The letter says Buffett wants all his money to be distributed in the year it is donated, not added to the foundation's assets for future giving. The foundation gave away $1.36 billion in 2005, so the Buffett commitment would effectively double its spending.

Buffett said he plans to give away 12,050,000 Class B shares of Berkshire Hathaway stock to five foundations, which also include the Susan Thompson Buffett Foundation named in honor of his wife and 350,000 shares for the three foundations run by each of his children.

The gifts would be worth nearly $37 billion, which represents the bulk of the $44 billion that Buffet's stock holdings are worth today. Five-sixths of the shares will be earmarked for the Gates Foundation.

It will be interesting to see how the Gates Foundation deals with the additional funds. Buffett chose to provide the Gates Foundation with the money instead of starting his own charitible foundation.