Monday, June 26, 2006

Buffett to give $30 billion to Gates Foundation

With Warren Buffett's announcement Sunday that he would start to make an annual donation of about $1.5 billion to the Bill & Melinda Gates Foundation, the world's largest foundation has a new challenge: how to distribute twice as much money each year.

In a letter dated today, Buffett told Bill and Melinda Gates that the first donation of Berkshire Hathaway Inc. stock would go to the foundation, which has assets of $29.1 billion, next month.

The money from Buffett, the world's second-richest man after Bill Gates, comes with a catch. The letter says Buffett eventually 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.
Wow! That is a lot of money. Now the Gates Foundation will have almost $3 billion a year to spend. How much money is that?

The United Nations Educational, Scientific and Cultural Organization, or Unesco, had a budget of $610 million for 2004-05.

Microsoft's research and development spending is $6.2 billion a year.

The National Institute of Health has a budget of $27.3 billion.

On the other hand, liberalizing trade with modest cuts in real tariffs, limited cuts in domestic support payments, full elimination of export subsidies and 97 percent duty- and quota-free access for exports from the poorest countries — would create global gains of $54 billion per year.

It is still an amazing large amount of money to be in the hands of one foundation.

Also amazing how egoless Warren is.
"What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it?" Buffett told the magazine. "Who wouldn't select Tiger Woods to take his place in a high-stakes golf game? That's how I feel about this decision about my money."

Fred P. Hochberg, dean of the Milano School for Management and Urban Policy at the New School, which has a large nonprofit-management department, said Mr. Buffett's historic contribution to the Gates Foundation was in character.

"It's egoless," he said. "Warren's name is not on the door."
Now the Gates Foundation can get on with, umm, giving out more smartcards to sex workers.

via NY Times and Seattle PI

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