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A Fortune Based on Good Fortune

As he signs over billions to the Gates Foundation, Warren Buffett reflects on using money well.

June 27, 2006|Thomas S. Mulligan and Maggie Farley | Times Staff Writers

NEW YORK — When the world's second-richest man signed over the bulk of his fortune to the world's richest man's foundation Monday, Bill Gates (No. 1) quipped to Warren E. Buffett (No. 2), "I didn't see your hands shaking there."

With a firm grip, the smiling tycoon signed letters committing about $31 billion to the Bill & Melinda Gates Foundation and smaller amounts -- though still denominated in billions -- to four foundations set up in the names of his three children and deceased wife. "The first three letters are easy to sign," Buffett said. "I just sign, 'Dad.' " The ceremony for the largest charitable bequest in history took place, appropriately, in a marbled-lined room at the august main branch of the New York Public Library, which itself is the product of several storied fortunes, including those of John Jacob Astor and Andrew Carnegie.

Afterward, Buffett remarked to an audience of several hundred philanthropists, scientists, students and United Nations officials that it was far easier to make a fortune than to decide how to give it away.

"In business, you look for the easy things to do," said the 75-year-old Buffett, founder of the massive holding company Berkshire Hathaway Inc. and long considered the world's leading investor. "In philanthropy you are really tackling the problems that people of intellect, people with money have thought about in the past and have had a tough time coming up with solutions. So philanthropy is a tougher game."

The unveiling of Buffett's charitable agenda was orchestrated for maximum publicity. First came a story Sunday on Fortune magazine's website, which led to front-page play in newspapers around the world Monday.

After the library ceremony, more than 200 journalists thronged a function room at a Midtown Manhattan hotel for an afternoon news conference featuring the Gateses and Buffett. An interview with Buffett on Charlie Rose's PBS program Monday night capped off the media blitz.

Microsoft Corp. Chairman Gates said the purpose of the publicity was to coax "more of the people who are super-lucky to get involved" in philanthropy.

Although media magnate-turned-philanthropist Ted Turner once attempted to spur more giving "by kind of scolding people," Gates said his own approach was "showing how much fun it can be."

Melinda Gates, though less well known than her husband or the Oracle of Omaha -- as the Nebraska-bred Buffett is nicknamed -- proved herself their equal as a speaker, explaining the Gates Foundation's expanded focus. Its main missions will continue to be improving U.S. education and international health, but the foundation recently decided to move into biotechnology, agriculture and "micro-lending" in the Third World.

"When you see people standing in line in Zambia for tuberculosis medicine and they can barely swallow it," she said, it becomes clear that they need help developing their economy and agriculture to sustain whatever wellness the medicines may provide.

David Beckmann, president of Bread for the World, attended the signing ceremony. The Gateses' investment in the deprived people of the world, he said, "will change the way people think about poverty. It will make people and governments think that it really is possible to reduce disease and poverty. I think the biggest impact is not going to be the money. It's going to be on imagination around the world."

In the question-and-answer session with the media, Buffett outlined the long-held beliefs that shaped his decision to give the bulk of his fortune away.

"I don't believe in creating dynastic wealth," he said, adding that it made no more sense for his children "to inherit my position" atop a colossal fortune than for them to inherit a slot on the Olympic team or become quarterback of the University of Nebraska football team had their father been an athlete.

Buffett said his philosophy was to "leave the kids enough so they can do anything but not enough so they can do nothing."

Asked what his three children "had done wrong" to merit being cut out of the will, Buffett said they had known his views -- and shared them -- for years. Besides, they were "enormously excited" to hear that his gift would expand the work they are doing in their own foundations.

An Italian journalist asked Buffett if he had considered leaving his money to the U.S. government, which already is organized to address societal ills. The question got a laugh, but Buffett took it seriously, saying he thought the Gateses would produce greater per-dollar benefits "than if you dropped it into the federal treasury."

He added that private foundations were hard-nosed about pulling the plug on projects that didn't work, but "there's no constituency for ending" federal programs.

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