Folks in philanthropy and development definitely know that the Gates Foundation is the largest private player in that realm by far. Until recently it was likely to get even larger, as Warren Buffet had stated that the Foundation would receive the bulk of his assets when he died. A few weeks ago, Buffet announced that he had changed his mind, and was instead going to create a new trust for his assets, to be jointly managed by his children. It’s a huge change, but I don’t think very many people took note of what it means (“A billionaire is going to create his own foundation rather than giving to an existing one; seems unsurprising.”). So I created this chart:
Source: Tim Ogden. July 15, 2024. The faiv: Five notes on financial inclusion
Addendum—Aug 7, 2024
Tim provides an update on The faiv:
First, here’s an excerpt from a forthcoming book that details the beginning and end of the Buffet-Gates partnership; apparently that involves Buffet perceiving that the Gates Foundation had become too institutional. But it also includes the idea that the new trust that Buffet is creating, to be overseen by his children, has to give away all of the bequest within 10 years of his death. I just don’t see how that is remotely possible, even with a McKenzie Scott approach, barring just dropping money from the sky (honest question from someone who is not at all a macro-guy—would more than $125 Billion of windfall consumption over 10 years show up in inflation statistics?). I remain of the opinion that this is something that deserves a lot more attention.
I understand that others don’t want to criticize someone for how they spend their money. While I think this is a good principal in general, I don’t think it applies to Buffet for two reasons.
First, Buffet controls an extraordinary amount of money. More money than anyone could ever spend in a lifetime. This gives him an extraordinary responsibility to the world.
Second, Buffet has made a promise. He said “My pledge: More than 99% of my wealth will go to philanthropy during my lifetime or at death.… Were we [my family] to use more than 1% of my claim checks [stock shares] on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs.”
His promise was an extraordinarily important one—to distribute over a hundred billion dollars for the needs of society. Unless you want to argue that border militias, college scholarships, and Nebraskan politics are addressing the needs of society, he has broken his promise.
Immigration security, college education and early childhood development seem like they straightforwardly fall into ‘addressing the needs of society’ according to standard usage of the term. They’re not EA causes, but I’m not aware of Warren promising it would go to EA causes, or even things we would like at all. This is philanthropy (doing stuff to change society) as contrasted with personal consumption (boats, wine, parties etc.)
Seems like a bad incentive if we harshly criticise people for stopping giving, at least if we didn’t praise them way more for the donation in the first place. Warren has been one of the most generous men in history, but this historical generosity shouldn’t be held as evidence against him.
I agree he shouldn’t have his past donations held against him, and that his past generosity should be praised.
At the same time, he’s not simply “stopping giving.” His prior plan was that his estate would go to BMGF. Let’s assume that that was reflected in his estate planning documents. He would have had to make an affirmative change to effect this new plan. So with this specific action he is not “stopping giving,” he is actively altering his plan to be much worse.
I don’t buy this is a morally or socially significant distinction. Do we really believe that a parallel world Warren, who made a public pledge to give his money away, and fully intended to, but never got around to actually writing a will before he changed his mind, would be significantly less blameworthy, or would escape opprobrium?
Part of my intuition is that the temporal ordering doesn’t matter—if anything it’s better to give sooner—so we should not treat more harshly someone who donated and then stopped than someone who consumed frivolously and then saw the light later in life.
But it also includes the idea that the new trust that Buffet is creating, to be overseen by his children, has to give away all of the bequest within 10 years of his death. I just don’t see how that is remotely possible, even with a McKenzie Scott approach, barring just dropping money from the sky
My sense is the orgs and focus areas Yield Giving has gifted to probably can’t absorb as much funding as the big line items in this Longview report (several of which exceed Buffet’s entire endowment, albeit none shovel-ready AFAICT), so a MacKenzie Scott approach at 3-4x the scale for the Longview focus areas seems to have an outside shot at being possible? (Scott has been giving ~$4 bn per year over the last few years going by Yield Giving’s public database alone, and Buffet’s planned trust would need to give >$13 bn a year)
The key facts seem to be that extraordinarily large amount of money that was previously going to the Bill and Melinda Gates Foundation (from Buffet’s 2006 letter), which has a good track record, is now going to 3 of Buffet’s relatively unknown children (compared to the Foundation) for the vague purpose of “help people”. There’s a lot of uncertainty and potential for less effective causes; we don’t really know what these 3 people are going to agree on to donate. How can you persuade 3 strangers with ~$130b to donate to different causes, especially when they already have their own causes and when other charities (at least in the US) are going to be looking at them? Someone else will have to think about that one.
Breaking a charitable pledge of this magnitude (he has no plans to actually give the money away, it could very well just sit there) should be severely looked down upon IMO—otherwise the concept of a pledge has no power.
I agree with you Falk. But to steelman Chris’ argument… perhaps a reputation for being critical of people who did so much good but failed to follow through on everything they promised could dissuade people from engaging with effective giving/pledges in the first place?
Gates has more money than he knows what to do with. If he wants to spend another hundred billion, he could just donate it himself. He doesn’t have quite as much money outside the foundation as Buffet, but almost. Donating to Gates has zero value. Maybe spending on militias has negative value, but so do most of these foundations.
Donating to Gates was a bad idea 20 years ago. Maybe there was some option value that he would think of a way to spend the money, but he didn’t. Gates should have tried to convince Buffet to donate not his money but his time, his expertise in management. Maybe he tried, but he failed 20 years ago and today changes nothing.
I understand that others don’t want to criticize someone for how they spend their money. While I think this is a good principal in general, I don’t think it applies to Buffet for two reasons.
First, Buffet controls an extraordinary amount of money. More money than anyone could ever spend in a lifetime. This gives him an extraordinary responsibility to the world.
Second, Buffet has made a promise. He said “My pledge: More than 99% of my wealth will go to philanthropy during my lifetime or at death.… Were we [my family] to use more than 1% of my claim checks [stock shares] on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs.”
His promise was an extraordinarily important one—to distribute over a hundred billion dollars for the needs of society. Unless you want to argue that border militias, college scholarships, and Nebraskan politics are addressing the needs of society, he has broken his promise.
Immigration security, college education and early childhood development seem like they straightforwardly fall into ‘addressing the needs of society’ according to standard usage of the term. They’re not EA causes, but I’m not aware of Warren promising it would go to EA causes, or even things we would like at all. This is philanthropy (doing stuff to change society) as contrasted with personal consumption (boats, wine, parties etc.)
Any ideas for ways to make a positive outreach to the Buffet trust… praising their past giving and discussing their ideals and strategy?
Seems like a bad incentive if we harshly criticise people for stopping giving, at least if we didn’t praise them way more for the donation in the first place. Warren has been one of the most generous men in history, but this historical generosity shouldn’t be held as evidence against him.
I agree he shouldn’t have his past donations held against him, and that his past generosity should be praised.
At the same time, he’s not simply “stopping giving.” His prior plan was that his estate would go to BMGF. Let’s assume that that was reflected in his estate planning documents. He would have had to make an affirmative change to effect this new plan. So with this specific action he is not “stopping giving,” he is actively altering his plan to be much worse.
I don’t buy this is a morally or socially significant distinction. Do we really believe that a parallel world Warren, who made a public pledge to give his money away, and fully intended to, but never got around to actually writing a will before he changed his mind, would be significantly less blameworthy, or would escape opprobrium?
Part of my intuition is that the temporal ordering doesn’t matter—if anything it’s better to give sooner—so we should not treat more harshly someone who donated and then stopped than someone who consumed frivolously and then saw the light later in life.
I added an addendum with a later update
re: your addendum
My sense is the orgs and focus areas Yield Giving has gifted to probably can’t absorb as much funding as the big line items in this Longview report (several of which exceed Buffet’s entire endowment, albeit none shovel-ready AFAICT), so a MacKenzie Scott approach at 3-4x the scale for the Longview focus areas seems to have an outside shot at being possible? (Scott has been giving ~$4 bn per year over the last few years going by Yield Giving’s public database alone, and Buffet’s planned trust would need to give >$13 bn a year)
The key facts seem to be that extraordinarily large amount of money that was previously going to the Bill and Melinda Gates Foundation (from Buffet’s 2006 letter), which has a good track record, is now going to 3 of Buffet’s relatively unknown children (compared to the Foundation) for the vague purpose of “help people”. There’s a lot of uncertainty and potential for less effective causes; we don’t really know what these 3 people are going to agree on to donate. How can you persuade 3 strangers with ~$130b to donate to different causes, especially when they already have their own causes and when other charities (at least in the US) are going to be looking at them? Someone else will have to think about that one.
I’m not a fan of this negativity. Why not be grateful for all the money he’s donated to the Bill and Melinda Gates Foundation instead?
Breaking a charitable pledge of this magnitude (he has no plans to actually give the money away, it could very well just sit there) should be severely looked down upon IMO—otherwise the concept of a pledge has no power.
Us feeling positive is unimportant compared to the future of humanity. Bigger things are at stake here.
I agree with you Falk. But to steelman Chris’ argument… perhaps a reputation for being critical of people who did so much good but failed to follow through on everything they promised could dissuade people from engaging with effective giving/pledges in the first place?
Gates has more money than he knows what to do with. If he wants to spend another hundred billion, he could just donate it himself. He doesn’t have quite as much money outside the foundation as Buffet, but almost. Donating to Gates has zero value. Maybe spending on militias has negative value, but so do most of these foundations.
Donating to Gates was a bad idea 20 years ago. Maybe there was some option value that he would think of a way to spend the money, but he didn’t. Gates should have tried to convince Buffet to donate not his money but his time, his expertise in management. Maybe he tried, but he failed 20 years ago and today changes nothing.