The season of billionaire-philanthropists is upon us. Warren E. Buffett, the second richest man, on Sunday said he would give away 85 per cent of his $44 billion (Rs 2,02,840 crore) wealth to charities. The bulk of it will go to the foundation of Bill Gates, his business associate, bridge partner and the only man richer than him.
The Bill and Melinda Gates Foundation is expected to get $31 billion from Buffett. But it does not mean that the 75-year-old chairman of Berkshire Hathaway will just hand over the greenbacks to Gates. It will come in instalments every July and there is a catch.
The money will be given only if either Bill or Melinda is alive and “active in the policy-setting and administration” of the foundation. Also, what the foundation spends should be equal to what Buffett contributed the previous year plus 5 per cent of its assets. So there is work for Bill when he starts taking care of his charities.
Buffett wrote to the Gateses that he would earmark 10 million B shares (each worth 3,071 on Friday) of Berkshire Hathaway for their charity. These now amount to $31 billion but may change with changes on Wall Street.
Next month, Buffett will give 500,000 shares to the foundation. But in July 2007, he will give only 475,000 shares — in his words, “5 per cent of the 9,500,000 remaining.” And so on
Buffett said, “You can expect the value of shares to increase”, but there is bad news. After his announcement, the shares fell.