Marketplace Report: Will Buffett Spark a Trend?
MADELEINE BRAND, host:
Back now with DAY TO DAY. As we told you earlier, Warren Buffett has decided to donate the bulk of his stock wealth to the Gates Foundation. Philanthropy experts say the decision could be the beginning of a trend away from passing on wealth from generation to generation. MARKETPLACE's Janet Baben is here, and Janet, is this the beginning of a new trend? Are the Paris Hiltons of the world going to be worried?
JANET BABEN reporting:
Well, no one's saying that the super-rich are going to stop leaving their money to their kids altogether, and even if a person's wealth is privately held, it's difficult to know how much money the heirs eventually receive, but experts do say it is becoming more common than it used to be. Warren Buffett, along with Bill Gates, have for a long time made it known that they believe that too much inherited wealth can actually hurt or be harmful to children. Todd Cohen is with The Philanthropy Journal, and he says that those shared views may be another reason that Buffett trusts the Bill Gates Foundation with his fortune.
Mr. TODD COHEN (Editor and Publisher of The Philanthropy Journal): Bill Gates' father and Warren Buffett both have fought very hard for continuing the estate tax, because they believe that you shouldn't get a break on the - an advantage from being wealthy, or leaving an advantage to your family.
BABEN: And Congress again took up the issue of repealing the estate tax earlier this month. They're still grappling with that.
BRAND: Yes, and it's been a tradition in this country for big names to give away a lot of their fortune, names like Rockefeller and Carnegie, names from 100 years ago. How is this different?
BABEN: Well, the experts say that it is a departure, because Buffett has decided to give his money to another foundation. So technically his name isn't even involved in the money or the giving. Todd Cohen says it was typical for the wealthy industry barons, you know, to use their money to make a name for themselves, like part of it was getting your name associated with these great charitable works. But that doesn't seem to interest Buffett. Again, here's Todd Cohen with The Philanthropy Journal.
COHEN: This is about making a difference, not ego, not having your name attached to something. This is about making a difference, and the money is the vehicle to make the difference.
BABEN: Now Buffett has pledged some of his shares to his wife's foundation, the Susan Thompson Buffett Foundation, and also to three foundations run by his children, but it's a comparatively smaller amount.
BRAND: And I understand Buffett has made some stipulations about how the money will be used with regards to the Gates Foundation. Is that also a trend?
BABEN: Yes. Philanthropy experts say that not only are the wealthy giving more money to foundations and less to their children, they're also getting more involved in how that money is being spent, and it's called venture philanthropy. You know, individuals are actually helping the foundations to administer and make the most out of the donations they get.
Coming up later today on MARKETPLACE, we're going to explore how the internet is actually helping poor farmers in India.
BRAND: Thank you, Janet. Janet Baben of Public Radio's daily business show, MARKETPLACE. It's produced by American Public Media.
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