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Berkshire Hathaway
BRK.A,
CEO Warren Buffett has resigned from the board of the world’s largest charitable foundation, but he’s ending his tenure on a high note: he said he’s halfway to his goal of giving away most of his wealth.
Buffett said he was leaving the board of the Bill and Melinda Gates Foundation in a Wednesday letter. That’s a significant shake-up at the foundation, where there are only three board members: Buffett and Bill and Melinda Gates, who created the charitable organization in 2000.
Its future was called into question when Bill and Melinda Gates announced they were divorcing in May, but foundation leaders have said that the couple’s split will change nothing at the foundation. The Gates Foundation did not immediately respond to a request for comment on Buffett’s departure.
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‘In 2006, I pledged to distribute all of my Berkshire Hathaway shares — more than 99% of my net worth — to philanthropy. With today’s $4.1 billion distribution, I’m halfway there.’
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Buffett, 90, noted that his departure from the Gates Foundation board comes as he’s winding down other activities; he’s stepped down from all other corporate boards other than Berkshire Hathaway’s.
Buffett also said Wednesday that he had achieved a personal milestone by giving some $41 billion to the Gates Foundation and four foundations run by Buffett family members.
“In 2006, I pledged to distribute all of my Berkshire Hathaway shares — more than 99% of my net worth — to philanthropy. With today’s $4.1 billion distribution, I’m halfway there,” Buffett wrote.
He added, “After 16 years of pursuing my philanthropic plan, I’m delighted with its workings.”
‘Tax deductions are important to many’
Buffett also indirectly touched on recent revelations in the investigative news outlet ProPublica about billionaires, including himself, who pay very little in federal income taxes. Buffett, who has previously said that the ultra-rich should be taxed more, said Wednesday that his philanthropic activities have led to a tax break of about 40 cents per $1,000 he’s donated.
He explained that he doesn’t get as big a tax break as he could for his philanthropy because he has relatively little income; most of his wealth comes from “tax-paying businesses that I own through my Berkshire stockholdings, and Berkshire regularly reinvests earnings to further grow its output, employment and earnings.”
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Buffett, who has previously said that the ultra-rich should be taxed more, said that his philanthropic activities have led to a tax break of about 40 cents per $1,000 he’s donated.
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Buffett added, “Nevertheless, tax deductions are important to many — particularly to the super-rich — who give large amounts of cash or securities to philanthropy. It is fitting that Congress periodically revisits the tax policy for charitable contributions, particularly in respect to donors who get ‘imaginative.’”
Typically donors are allowed to deduct the value of charitable donations from their taxable income, though they usually have to itemize their deductions to claim the tax break. (In 2020, under the Cares Act, donors were allowed to deduct up to $300 in charitable contributions without itemizing.)
A bill recently introduced in Congress would tweak some tax laws related to charitable giving through donor-advised funds, but would not change the tax deductions individuals receive for donations they make directly to charities.
The ‘heroes’ of philanthropy
Buffett said in 2006 that he would hand over the bulk of his wealth to philanthropy, and that much of it would go to the foundation run by Microsoft co-founder Bill Gates and his wife Melinda.
In 2010, Buffett and the Gateses announced The Giving Pledge, and invited their fellow billionaires to join them. Signers of the pledge agree to give away most of their wealth, either during their lifetimes or when they die.
Meeting that goal has proved challenging for many of the pledgers, because their wealth accumulates faster than they can give it away.
Buffett said in the letter that he doesn’t count himself among the “heroes” of philanthropy. That designation, he said, goes to people who devote real time to working with people to better their lives, he said. That’s not something he’s done, Buffett said. He’s said he’s taken a hands-off approach and that even his role at the Gates Foundation was an “inactive” one.
