Buffett Pledges Billions to Gates Foundation

Super stock-picker Warren Buffett pledges stock worth about $37 billion to charitable foundations, including more than $30 billion to the Bill and Melinda Gates Foundation. Buffett biographer Roger Lowenstein discusses the move with Madeleine Brand.

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MADELEINE BRAND, host:

From the studios of NPR West, this is DAY TO DAY. I'm Madeleine Brand.

ALEX CHADWICK, host:

And I'm Alex Chadwick. Coming up, just in time for the fourth of July, the Senate seems poised to approve a constitutional ban on flag burning. First, the lead: the world's second richest man has decided to give the bulk of his fortune to the world's richest man - or at least to his foundation.

Warren Buffett, the chairman of Berkshire Hathaway, is giving more than $37 billion to the Bill and Melinda Gates Foundation, and this morning in New York, Warren Buffett had this to say about his friend Bill Gates at a ceremony in New York.

Mr. WARREN BUFFETT (Chairman, Berkshire Hathaway, Inc.): It was clear that an outstanding mind, with the right goals, was focusing intensely, with passion, heart, on improving the lot of mankind around the world.

BRAND: Here to talk with us is writer Roger Lowenstein. He wrote a book on Warren Buffett, and welcome to the program.

Mr. ROGER LOWENSTEIN (Author): Hello.

BRAND: Well, this is quite a remarkable development, and the Bill and Melinda Gates Foundation is certainly not the poorest of foundations. They, themselves, have some $30 billion. So, why would Mr. Buffett choose the Bill and Melinda Gates Foundation to give away all this money?

Mr. LOWENSTEIN: Well, the first place, is why would he choose to give it away to anybody, besides the Buffett Foundation? I think it's a pretty brilliant stroke, because as good as Buffett has been in making money, he's really never been very good at giving it away. He's the first to say that he's pretty tight with a nickel. If you compare his bequests over the years, of his foundation to Gates', or many other philanthropists, they're really pretty cheap, is the only way to put it.

And he's always been, I think, really, obsessed is the right word - about what he could do with the money that wouldn't waste it. He has very strong feelings about not frittering it away on a concert hall here, a museum there, a worthy cause here. And as a result, he hasn't done much with it.

Buffett has approached his philanthropy, really the same way he has his portfolio. He's very known for having a very concentrated portfolio - just a few stocks. And he's looked for the same thing in philanthropy. Gates has done that. He's focused on world health, a few diseases, and to education with computers, so Gates is the perfect match.

BRAND: Well, tell us about the relationship between Buffett and Gates.

Mr. LOWENSTEIN: It's pretty good. You know, I guess we all look for our peers, right? And how many billionaires are there? But, obviously, it's got to be more than that because, why not Ted Turner or Ron Perelman? They're two very, very bright guys - two very, very rich guys. They're not in competition in any way. They're different generations, they're different fields, and they obviously enjoy each other.

BRAND: I understand they like to play bridge together.

Mr. LOWENSTEIN: Yeah, they play bridge, but you know, if it wasn't bridge, I think it'd be something else. I think you understand more about the relationship if you think about the fact that there're not a whole lot of people billionaires can go to without wondering, hey, why do they want to talk to me. You know, is it cause I'm such a fabulous guy, or is it the billion dollars? And at least with each other, they don't have to deal - they're immediately over that hurdle. Buffett knows Gates is not interested in talking to him for his money, and vice versa.

BRAND: In you book you wrote that Buffett is an emotionally guarded - strangely stunted, I think, are the words you used - Midas - obsessed with work and secrecy and that he doesn't seem to derive much pleasure from all his wealth. Is this the pleasure part?

Mr. LOWENSTEIN: He derives pleasure from making it, but it's never been about spending it. And I think this is a recognition that someone else - his buddy Bill - will spend it better than he has or will. He once took a tour of the Hearst castle, as a much younger man. And they're pointing out the chandeliers from Italy, and the Persian rugs, and where the newspaper magnate bought this, that, and the other thing. And Buffett finally interrupts the tour guide and says, don't tell us where he spent the money, tell us where he made it.

And that's what Buffett has always been about. He's delegating to someone else whom he trusts, as obviously on his par, the job of spending it.

BRAND: Roger Lowenstein is the author of the book, Buffett: The Making of an American Capitalist. Roger Lowenstein, thank you for joining us.

Mr. LOWENSTEIN: Oh, thank you.

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