You don't have to be one of the world's richest men or know one to make a difference with your charitable gifts -- but it helps. Established by the chairman of Microsoft Corporation and his wife, the Bill & Melinda Gates Foundation works in developing countries to improve health and reduce poverty, and in the US to support education and libraries nationwide and children and families in the Pacific Northwest. With an endowment of about $33.5 billion, the foundation is the largest in the US, distributing more than $26 billion in total grants since 1994. Investor Warren Buffett plans to give the Bill & Melinda Gates Foundation about $30 billion worth of Berkshire Hathaway stock in installments.
The Buffett gift will be spread over a number of years. (The $30 billion figure represents the value of the stock when the gift was announced in June 2006.) So far, the gifts have included $1.6 billion (August 2006), $1.76 billion (July 2007), $1.8 billion (July 2008), $1.25 billion (July 2009), and $1 billion (July 2010).
As a result of Buffett's gift, the Gates Foundation predicted a steep increase in grant-making. Indeed, despite a sizeable hit to its endowment due to the crisis in the financial markets, the philanthropic organization's total grant payments reached $2.6 billion in 2010.
With the Buffett-giving program comes a challenge, however. Starting in 2009, the foundation has had to annually give away 100% of Buffett's contribution from the previous year. Not a bad problem to have, but the foundation is working to expand its staff and revamp its processes to take advantage of the opportunity. As a result, global economic development efforts are expected to gain additional support. The foundation's concentrating on India to help improve its health system through HIV awareness and other areas.
As part of its response to the Buffett gift, the foundation restructured itself in November 2006. Its assets were transferred to the Bill & Melinda Gates Foundation Trust, which receives contributions of Berkshire Hathaway stock and is overseen by the Gateses as trustees. Money passes from the trust to the Bill & Melinda Gates Foundation, which makes grants. Buffett joined the Gateses as a trustee of the Bill & Melinda Gates Foundation -- but not of the asset trust, thus separating him from decisions about the disposition of the trust's Berkshire Hathaway shares.
At the same time, the foundation announced that it would give away all of its assets within 50 years of the deaths of Buffett, then 76; Bill Gates, then 51; and Melinda Gates, then 42. Bill Gates previously had said he would like to give away most of his fortune while he is still living, and he is scaling back his duties at Microsoft to spend more time at the foundation. – less
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