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Warren Buffett, the investment guru known as the Oracle of Omaha, has another title today, the most generous philanthropist in history. Buffett has pledged to give away $37 billion of his fortune. Most of it will go to a foundation run by the only folks richer than he is, Bill and Melinda Gates. The money will bolster the Gates Foundation work fighting infectious diseases around the world and reforming education here at home. We'll have three reports on Buffett's move.
First, NPR's Robert Smith was in New York City today, where Buffett and Bill and Melinda Gates made it all official.
ROBERT SMITH reporting:
In the world of philanthropy, today was historic. But that didn't stop Warren Buffett from joking his way through the process of giving away most of his wealth. At an event at the New York Public Library, Buffett signed letters pledging $37 billion worth of stock to five different foundations. He reassured the crowd that he had carefully checked the names of the beneficiaries.
Mr. WARREN BUFFETT (Berkshire Hathaway): I wanted to make sure I didn't write one that says Dear Anna Nicole Smith, so I'm doing this at an age where I -
SMITH: After signing the letters to fund his four family foundations, Buffett moved to the last letter.
Mr. BUFFETT: Kind of like the $64 question, we build up to the big, there we go!
(Soundbite of applause)
SMITH: A pledge to give the Gates Foundation a total of $31 billion in Berkshire Hathaway stock. Warren Buffett is well known as a shrewd and cautious investor, so when it came time to give his own money away, he told Bill and Melinda Gates he didn't want to gamble on starting a new foundation.
Mr. BUFFETT: If you're accumulating wealth, it's very natural to go to somebody you think can handle money better than you can and well, I've got some people where I'm saying you can give it away better than I can, so I'm turning it over to you and you'll do a better job of giving it away than I would.
SMITH: The Gates Foundation made $1.36 billion in grants last year to fund vaccines for infectious diseases and support education reform in the United States. The gift by Warren Buffett, which will be doled out year by year, will allow the foundation to double its giving.
But it comes with a catch. The Gates Foundation can't just pad its endowment. It will be required to spend the money each year and for an organization as carefully run as the Gates Foundation, the additional oversight of that much spending will be daunting. Bill and Melinda Gates say they've been preparing for months.
Mr. BILL GATES (Bill and Melinda Gates Foundation): You know in some ways the early successes we had now give us the opportunity to scale up using the amazing resources that Warren's made available.
Ms. MELINDA GATES (Bill and Melinda Gates Foundation): We've always known that the medicines that we're working on, the vaccines we're working on, eventually we're going to have to get those into large-scale trials and that's always going to have required a great deal of money, so we'll have that coming forward. And then we'll be surrounding those programs by deepening them and also figuring out how to deliver a lot of these medicines and vaccines. So I think you'll see us pushing those areas.
SMITH: Besides the major gift to the Gates Foundation, Buffett will divide the rest of his money, $6 billion, among four other charities started by his family members. Those foundations support environmental causes, abortion rights, low-income children and human rights. One reporter asked Buffett if his kids had done something wrong to have to watch the bulk of their inheritance be given away to charity.
Mr. BUFFETT: Well, they did a few things wrong, but they did fewer things wrong than I did at their age, I'll put it that way. I do not believe in inheriting your position in society based on what womb you come from.
SMITH: Any move by Warren Buffett is watched carefully by the markets and imitated by his followers. So what advice did the guru have for his fellow investors who want to give it all away?
Mr. BUFFETT: Don't just go for safe projects. I mean, you can bat 1,000 in this game if you want to by doing nothing important. Or you'll bat something less than that if you take on the really tough problems.
SMITH: His own shareholders may not be listening to his advice. Shares in Buffet's company, Berkshire Hathaway, fell after news of his generosity.
Robert Smith, NPR News, New York.
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