Warren Buffett donates record $5.3B Berkshire shares to charity | Hacker News Reader

Warren Buffett donates record $5.3B Berkshire shares to charity

reuters.com

56 pointsalexcos33 comments

i.e. Buffet donates money to entities that are 100% controlled by friends and family.

For example: The ~$400M donation to Susan Thompson Buffett Foundation give out about 200 scholarships per year at a max of $10k per scholarship ($2M/yr total). At a 10% rate of return (BRK actually does way higher) the foundation earns $40M/yr. So only a tiny fraction of gains are given out. Since the scholarships are $10K max per scholarship the average payout per year is probably way lower than $2M/yr. So really, what is the purpose of this foundation?

Loss Aversion is a feature of the chimp brain but it turns into a bug after the chimp accumulates too many bananas.

The Susan Thompson Buffett Foundation already spends $500 million annually and has doled out over $6 billion in total donations [1]. A simple Google search would have prevented writing easily falsifiable info..

1- https://projects.propublica.org/nonprofits/organizations/476...

Really interesting, where is the money going, is surely not $500M/yr in nebraska college scholarships which is the sole thing mentioned on their website.

I know information literacy isn’t practiced among conspiracy theorists but it’s literally listed out in detail every single year.

https://projects.propublica.org/nonprofits/organizations/476...

I stand corrected.

From the 2023 tax filing:

1) Center For International Reproductive Health Training - $28 million

2) Federal Democratic Republic of Ethiopia (project support) - $5 million

3) Africa Institute for Development Policy - $3 million.

4) Amhara Regional Health Bureau - $1.35 million.

5) Global Financing Facility - $15 million.

6) Imbuto Foundation (HIV/AIDS programs in Rwanda) - $37 million.

And dozens more organizations. You can view the full tax filing here - https://projects.propublica.org/nonprofits/organizations/476....

There is at least some figures that are wrong on this site since they list exec comp as only $1.1M, then right below the total exec comp is around $2.5M or $3M if you include their other exec comp.

The footnote written below that info:

Officer compensation may be included in charitable disbursements, so Percent of Total Expenses may add up to greater than 100%.

It could also be a data parsing error from ProPublica. The information ProPublica displays is extracted with automated systems from the foundation tax forms (their database contains hundreds of thousands of forms added annually, so manual extraction is out of the question). Any little reporting anomaly can cause such mistakes, but reading the tax form itself gives a clear picture.

The $1.1M is for compensation of officers, and the $3M listed in the table below is for officers and key employees (i.e. non-officers).

This is clearly stated, both on ProPublica's site and in the IRS Form 990 that it's sourced from.

Between this and his announcement about the family charitable trust [1], I wonder if he is sensing the end is near.

[1] https://www.cnn.com/2024/06/28/investing/warren-buffett-gate...

No need for sensing. It’s on the actuarial tables.

no kidding, dude is 93 and outlived Jimmy Buffett. On a long enough timeline the survival rate for everyone blah blah blah.

He will be 94 in August. He lost his friend and business partner, Charlie Munger, last year at 99. Maybe that was somewhat of a memento mori for him

More of a “friends and family” round if you will. Fuck all those other charities, only rich people and their kids know how to use that money.

Buffett donated 9.93 million shares to the Gates Foundation, and has donated more than $43 billion of Berkshire shares there overall. He also donated 993,035 shares to the Susan Thompson Buffett Foundation, named for his late first wife, and 695,122 shares to each of three charities led by his children Howard, Susan and Peter: the Howard G. Buffett Foundation, the Sherwood Foundation and the NoVo Foundation.

The foundations you mentioned exist to redistribute that money to other foundations and initiatives. They’re better vehicles to make grants instead of Warren/Berkshire trying to be experts on charitable donations.

This is literally all public record, you can see every single grant made by each foundation.

If Warren hadn't given his Berkshire shares away he'd still have 474,998 currently worth $290bn and be the world's richest man by quite a margin. He's done good with the investing. I think one of the reasons for giving it away is to avoid all the hype about that.

Buffett has been donating regularly since 2006. The record amount donated probably reflects Berkshire Hathaway’s record high stock price which surpassed $600,000 per share this year.

His heirs will wield a tremendous amount of amount of influence on society from controlling these foundations. Is it really that much different than just giving it to them outright aside from limiting conspicuous consumption?

I could be pretty conspicuous if I had a salary of 1.2 million

The bulk has gone to Bill Gates charity for better or worse.

To think when his kids inherit all the stocks he owns, the purchase price is reset to the market price at inheritance. Which means 10s of billions of tax free stock sales.

How does that work?

When you gain ownership of stock the price at that time is called the basis price. If you inherit stock, when you receive the stock the stock price at that time is the basis.

Just like that.

Say you invested $22 and bought one Apple stock at IPO. Thanks to splits you now hold 224 stocks each worth some $210. Let's presume you die. Your heir inherits 224 stocks at $210 and so if they sell them at $210 then no taxes are paid.

This is how the rich avoid paying taxes: the money they spend mostly comes from bank loans secured by their stocks which are only paid back by their heirs using this scheme.

> This is how the rich avoid paying taxes: the money they spend mostly comes from bank loans secured by their stocks which are only paid back by their heirs using this scheme.

Only a small percentage of wealthy people do this because

1) It is risky. If the stock falls too much, they get margin called and lose all their pledged shares. Natural gas billionaire Charif Souki learned this the hard way [1]

2) Many of them have privately held companies, so there's no stock to borrow against.

3) It's easier just to take dividends or salaries and use that for everyday expenses.

4) Any pledged shares must be disclosed in public SEC filings, and most public company executives don't file such disclosures (they prefer to sell shares outright).

For some reason, any finance-related thread on HN always brings out the faux accountants and tax lawyers.

1- https://seekingalpha.com/news/3549059-tellurians-souki-force...

“stepped up basis”

You are ignoring the estate tax.

Only after they pay the 40% estate tax on it (which is higher than the 20% capital gains tax + 3.8% net investment tax that they would be saving).

You are clearly not informed, he specifically left his kids out. They received shares from his father, but not him. One son is a musician who has spent it in the arts already.

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