| Warren Buffett with Melinda and Bill Gates in New York on Monday. (AP)
Washington, June 26: The world’s second richest man has decided to donate about 85 per cent of his wealth to the world’s richest man.
The world’s richest man, in turn, has decided to wind down his day-to-day work and concentrate more of his time and efforts on charitable work.
A $37-billion gift by Warren Buffett ' most of it to the charitable foundation run by Bill Gates in his name and that of his wife Melinda ' has effectively doubled its capacity to spend on reducing poverty and increasing access to technology and health care for the poor in developing countries.
Buffett’s donation is the biggest single act of charity ever recorded in the US.
Buffett, chief executive of Berkshire Hathaway, and Gates, the founder of Microsoft, have been good friends and bridge partners for many years.
In addition, Gates is a director of Berkshire Hathaway, Buffett’s investment firm. Buffett and Melinda together serve on the board of the Washington Post Company.
In his letter to the Gates Foundation today, Buffett spoke of his admiration for the foundation, the world’s largest charity with assets of $29.1 billion, and his desire to “materially extend its future capabilities”.
Buffett told Fortune magazine in an interview: “We agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society.”
He said the philanthropy was encouraged by his wife, Susan, who died in 2004. The stake of Buffett, 75, in the company he founded is worth $44 billion.
India’s poor are expected to significantly benefit from Buffett’s action. The Bill and Melinda Gates Foundation is involved in India, primarily in the prevention and treatment of HIV/AIDS.
The foundation has also helped strengthen health services for women and children in India and has been engaged in earthquake relief and rehabilitation.
In their response to Sunday’s announcement about Buffett’s gift, which preceded the release of his letter, Bill and Melinda Gates said in a statement: “Warren has not only an amazing intellect but also a strong sense of justice. Warren’s wisdom will help us do a better job and make it more fun at the same time.”
That wisdom was obvious from the conditions Buffet has attached to his donation.Buffett wants all his money to be used in the year it is donated. It cannot be accumulated to the foundation’s assets for future programmes.
This represents a major challenge for the foundation, which already spends about $1.36 billion a year. With Buffet’s condition, it would have to double its spending as soon as the first annual donation of $1.5 billion is available.
Gates announced last week he would gradually give up his day-to-day role in Microsoft and concentrate on the work of the foundation.
Buffett will join the Gates Foundation board but does not intend to get involved in its operations, or the other four philanthropic groups he is funding ' one of which is in the name of his wife and the other three are run by his children, Howard, Susan and Peter.
Buffett is a cult figure in the investing world. About 20,000 investors go to Omaha every year for the annual meeting of Berkshire ' from which he derives the sobriquet, the Oracle of Omaha.
He told Fortune he had always planned to have his wife oversee his charitable giving after his death. But after she died ' and because he saw an opportunity to invest in an existing, well-respected foundation run by two “ungodly bright” people ' he changed plans to start giving it away this year.