Buffett Foundation
Encyclopedia
The Buffett Foundation is a charitable organization formed by Omaha, Nebraska
Omaha, Nebraska
Omaha is the largest city in the state of Nebraska, United States, and is the county seat of Douglas County. It is located in the Midwestern United States on the Missouri River, about 20 miles north of the mouth of the Platte River...

 investor and industrialist Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...

 as a vehicle to manage his charitable giving. It was renamed Susan Thompson Buffett Foundation in honor of his wife Susan Buffett
Susan Buffett
Susan Thompson Buffett , the first wife of investor Warren Buffett, was active in civil rights, abortion rights and population control causes. She was a director of Berkshire Hathaway, owning 2.2 percent of the company at the time of her death. She was the 153rd richest person in the world...

 after her death in 2004.

Management

Allen Greenberg, the Executive Director of the foundation, was married from 1983 to 1995, to the Buffetts' daughter, Susie
Susan Alice Buffett
Susan Alice Buffett is an American philanthropist. Her charitable work has focused largely on the Sherwood Foundation, formerly known as the Susan A. Buffett Foundation, an organization in Omaha that provides grants in public education, human services and social justice in the interest of...

, who is Chair. The Buffett Foundation was set up in 1964 but had no director until Greenberg took the job in 1987.

History

While the foundation is already a major charity with annual disbursements of over $12 million, it would have become far more important after his death if he had carried out his long-stated intention to leave most of his net worth to it.

Susan Buffett's will bestowed about $2.5 billion on the foundation, to which her husband's gifts of $315 million will be added.

Giving

The Buffett Foundation does not accept unsolicited requests, preferring instead to seek out worthy recipients on its own.

Of the $17.6 million that the Buffett Foundation donated in the fiscal year ended June 30, 1999, nearly $3.8 million went to Planned Parenthood
Planned Parenthood
Planned Parenthood Federation of America , commonly shortened to Planned Parenthood, is the U.S. affiliate of the International Planned Parenthood Federation and one of its larger members. PPFA is a non-profit organization providing reproductive health and maternal and child health services. The...

, among its top contributors. It also involves itself directly at the clinic level.

International Projects Assistance Services (IPAS), based in Carrboro, N.C., manufactures a handheld suction pump used in developing countries to initiate abortions. The Buffett Foundation has backed IPAS for years. Its 1999 contribution of $2.5 million is part of a five-year, $20 million commitment that will enable IPAS to double its capacity.

Currently, the Foundation provides grants to a large range of US and a few international organisations, including the Willows Foundation in Turket (€2.3 million), the World Food Programme
World Food Programme
The World Food Programme is the food aid branch of the United Nations, and the world's largest humanitarian organization addressing hunger worldwide. WFP provides food, on average, to 90 million people per year, 58 million of whom are children...

 in Italy (€800,000), Marie Stopes International in the UK (€571,000); and Grupo de Informacion en Reproduccion Elegida in Mexico (€196,000).

By 2008, the Foundation had nearly $4 billion in assets. In 2007, Omaha's Building Bright Futures initiative promised financial support to low-income students in the area who wanted to attend college. But the Buffett program is offering help across Nebraska.
For years, the foundation capped the scholarship at about 100 students. Starting with the 2007-08 school year, the foundation lifted that cap. 770 students—including 400 new recipients this fall—held a Buffett scholarship. The foundation granted nearly $2.4 million during the 2007-08 year. Susie Buffett said she hopes the number of scholarship recipients, particularly students from the Omaha area, increases significantly next year.

Gates Foundation

His intention was originally to leave 99% of his estate to the Buffett Foundation, but in June 2006 he announced that he would give 85% of his wealth to the Bill and Melinda Gates Foundation instead. Buffett stated that he changed his mind because he has grown to admire Gates's foundation over the years; he believed that the Gates Foundation would be able to use his money effectively because it was already scaled-up.

"Susan's Foundation" is to receive a bequest of about $3 billion over a span of many years.

Source of Wealth

The vast bulk of Buffett's wealth consists of his personal holdings in the Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...

 Corporation, a conglomerate
Conglomerate (company)
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure , usually involving a parent company and several subsidiaries. Often, a conglomerate is a multi-industry company...

 of which he controls almost 40% directly, and which he has managed personally since the mid-1960s.

Giving away such a large part of his company holding could prove problematic in that much of the business of Berkshire Hathaway consists of stock-issuing insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

 companies, such as GEICO
GEICO
The Government Employees Insurance Company is an auto insurance company. It is a wholly owned subsidiary of Berkshire Hathaway that as of 2007 provided coverage for more than 10 million motor vehicles owned by more than 9 million policy holders. GEICO writes private passenger automobile insurance...

 and General Re
General Re
Gen Re is a leading property/casualty and life/health reinsurance company and is owned by Berkshire Hathaway Inc.-History:General Reinsurance Corporation’s history began in 1921 when two Norwegian companies, Norwegian Globe and Norwegian Assurance, merged and took the name General Casualty and...

. In the past, many state insurance regulators have had serious concerns about allowing for-profit insurance companies – as opposed to mutual insurance
Mutual insurance
A mutual insurance company is an insurance company which has no shareholders but instead is owned entirely by its policyholders. The primary form of financial business set up as a mutual company in the United States has been mutual insurance. Under this idea, what would have been profits are...

 companies – to be ultimately controlled by non-profit entities. In a famous case regarding this, the MacArthur Foundation
MacArthur Foundation
The John D. and Catherine T. MacArthur Foundation is one of the largest private foundations in the United States. Based in Chicago but supporting non-profit organizations that work in 60 countries, MacArthur has awarded more than US$4 billion since its inception in 1978...

 was forced to divest itself of Bankers Life and Accident.

External links

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