Buffett urges rich to get by on $500 million, donate rest
Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., donated about 17.5 million Class B shares to the Bill and Melinda Gates Foundation, the Omaha, Neb.-based firm said in a statement. The shares closed at $115.01 Monday in New York and have gained 28 percent this year.
Buffett helped found the Giving Pledge to encourage the wealthiest to donate to causes of their choice. He said last month that he gives away shares because they have more "utility in the hands of others" and reiterated his plea for other billionaires to follow suit.
"If you have trouble living on $500 million, I'm going to put out a book, 'How to Live on $500 Million,'" Buffett said at the Forbes 400 Summit on Philanthropy. "Think about whether the other $500 million might do more for humanity than it's going to do for you and your family."
Buffett, a trustee of the Gates foundation, is the third- richest man in the world, with a net worth of about $61 billion, according to the Bloomberg Billionaires Index, a daily ranking of the wealthiest people. He has met with billionaires in the U.S. and traveled with Gates outside the country to promote philanthropy.
"The Giving Pledge is a tremendous thing because he's giving very broad guidelines," Somesh Dash, an advisory board member at the Stanford Center on Philanthropy and Civil Society and a principal at Institutional Venture Partners, said in a telephone interview. "He's not saying you have to give it to a particular organization."
The bequest by Buffett yesterday helps fund the Gates foundation's work in combating poverty and disease globally, as well as U.S. education initiatives. Gates, 57, is a director at Berkshire and is the world's richest man, the index shows.
Buffett announced plans in 2006 to donate 10 million Class B shares to the Gates foundation and made an initial gift of 500,000 shares. He said he'd release 5 percent of the remaining balance of the stock each year. That means each donation includes fewer shares than the year before.
The Berkshire executive said in a 2006 letter that he expected the value of the shares to rise "in an irregular manner, by an amount that more than compensates for the decline in the number of shares that will be distributed." The B shares were split 50-1 in 2010.
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