Wall Street Journal, Warren Buffett’s Estate Planning Sends Charities Scrambling:
Warren Buffett has long held his cards close to the vest when it comes to his investing plans. Now, charities including the Bill & Melinda Gates Foundation are racing to adjust to possible changes in his plans for charitable giving. The results could dramatically reshape the world of philanthropy.
In 2006, the Omaha billionaire made a pledge worth tens of billions of dollars: He would earmark 85% of his stock in his company, Berkshire Hathaway, for charity, with the bulk going to the Gates Foundation, a global philanthropy run by his longtime friends. He wrote to the couple that he was “irrevocably committing to make annual gifts of Berkshire Hathaway ‘B’ shares throughout my lifetime.”
Less clearly worded was what would happen to the undistributed shares after Mr. Buffett, who will turn 92 in August, dies.
For years, the Gates Foundation made preparations for that event. Staffers scrambled to find potential homes for an anticipated flood of funding, an endeavor they nicknamed “Project Lincoln,” former employees said. In 2010 Mr. Buffett said he planned ultimately to give away 99% of his wealth.
Now, similar preparations are under way at a different charity—a little-known Buffett family foundation that supports abortion rights. Officials at the Susan Thompson Buffett Foundation have been hiring staff and making plans to spend a massive influx of money that the small organization expects to receive, according to current and former people within the foundations and documents reviewed by The Wall Street Journal.
While Mr. Buffett hasn’t revealed publicly how his estate will be divided, officials at both foundations have discussed in internal meetings that the amount left to the Buffett family foundation could be as high as $70 billion to $100 billion, some of the people said and documents show. An endowment of that size would make the Buffett foundation one of the largest private philanthropies in the world, based on publicly available data.
Mr. Buffett’s Berkshire stake, making up the bulk of his fortune, is currently valued at around $90 billion. Of that, about $56 billion is currently committed to be distributed over time to the Gates Foundation, $17.4 billion is committed to four family charities including the Buffett Foundation and $18.7 billion remains uncommitted, according to public statements Mr. Buffett has made and a Wall Street Journal analysis.
Assuming Berkshire shares perform roughly as they have over the past decade and Mr. Buffett continues to donate each year as he has, his remaining holdings would be worth more than $200 billion in a decade. ...
Victoria Haneman, a law professor at Nebraska-based Creighton University who focuses on tax and estate planning and isn’t involved in the Buffett deliberations, said there isn’t enough publicly available information to draw a conclusion about how any commitments will be handled after Mr. Buffett’s death. ...
“Over many decades I have accumulated an almost incomprehensible sum simply by doing what I love to do,” Mr. Buffett said in a statement last year. “Society has a use for my money; I don’t.”