Warren Buffett resigned as a trustee at the Bill and Melinda Gates Foundation as the charity grapples with upheaval created by the divorce of its namesake founders, and the billionaire finds himself at the center of controversy over the ultra-wealthy and taxes.
“My goals are 100% in sync with those of the foundation,” Buffett, 90, said Wednesday in a statement that also announced he had reached the halfway mark in giving all of his Berkshire Hathaway Inc. shares to charity.
Buffett, 90, has contributed more than $27 billion of his own money to the charity over the past 15 years. He’s one of the Gates Foundation’s three board members, alongside Bill Gates and Melinda French Gates, who announced last month they’re splitting after 27 years of marriage. Buffett, who said he played “an inactive” role as trustee, didn’t mention the divorce as a reason for his resignation, while giving a broader statement about his philanthropy, taxes and dynastic wealth.
Buffett has faced criticism in recent weeks amid an investigation by ProPublica into how certain wealthy individuals, including the Berkshire chairman and chief executive officer, pay low tax rates relative to their fortunes. Buffett said that his $41 billion of contributions to five foundations has produced only about 40 cents of tax savings per $1,000 given.
“That’s because I have relatively little income,” Buffett said in the statement. “My wealth remains almost entirely deployed in tax-paying businesses that I own through my Berkshire stockholdings, and Berkshire regularly reinvests earnings to further grow its output, employment and earnings. The income I receive from other assets allows me to live as I wish.”
He said it’s “fitting” for Congress to periodically revisit tax policy for charitable contributions, especially when certain donors get “imaginative.”
Buffett’s resignation from the Bill and Melinda Gates Foundation board marks another shift in the long-time partnership, and friendship, with Bill Gates.
Both Buffett and Gates frequently play bridge together and have traveled to places including China as a group. Gates previously served on Berkshire’s board, before announcing last year that he would step down from that post. Berkshire’s CEO decided in 2006 to donate the bulk of his wealth to the Gates foundation in part because the pair does a “much better job” at running those charity operations than Buffett says he could.
Future of the foundation
Gates has built the foundation into a powerhouse of charitable giving, in part due to his riches as the fourth-wealthiest person, with a $144.7 billion fortune, according to the Bloomberg Billionaires Index.
Three trustees is an unusually small number for an organization of its size. The Ford Foundation, which is roughly a fifth the size of the Gates Foundation, has 15 members on its board. The Rockefeller Foundation, at a 10th the size, has no fewer than 12 at any time.
The divorce put him in an awkward position, as tie-breaker for the two exes, said Greg Witkowski, a senior lecturer of nonprofit management at Columbia University.
“With only three board members, it does really put a lot of attention on Warren Buffett’s role in the middle of that,” Witkowski said soon after the divorce. “In an ideal setup, they would have had more trustees.”
Mark Suzman, the foundation’s chief executive officer, told employees last month that he’s in talks to strengthen “the long-term sustainability and stability of the foundation.”
Suzman “is an outstanding recent selection who has my full support,” Buffett said in the statement.
Suzman said last month that no decisions have been made about what future steps need to be taken, but added that Bill Gates and Melinda French Gates have “reaffirmed their commitment to the foundation and continue to work together on behalf of our mission.”
Buffett has been pulling back on travel commitments in recent years, including stepping down from the Kraft Heinz Co. board in 2018. The CEO still runs his sprawling conglomerate that’s valued at more than $634 billion, but recently shared that Greg Abel, a vice chairman who oversees all of Berkshire’s non-insurance operations, is currently the top candidate to succeed him if he steps back.
In 2006, Buffett said that he would distribute all of his shares of the company to charity. He said in Wednesday’s statement that his most-recent $4.1 billion distribution brought him halfway to that target.
“In June of 2006, I owned 474,998 ‘A’ shares. Now, I own 238,624 shares, worth about $100 billion,” he said, with all of them destined for philanthropy.
“Please understand that these remarks are no swan song,” the billionaire investor said in the statement. “I still relish being on the field and carrying the ball. But I’m clearly playing in a game that, for me, has moved past the fourth quarter into overtime.”- Bloomberg
Also read: Michael Larson, manager of Gates’ $170 billion who was supposed to keep them out of the news