Warren Buffett donates $6 bn in Berkshire Shares to Gates Foundation, family charities

Warren Buffett, the legendary CEO of Berkshire Hathaway, has made a significant philanthropic move by donating $6 billion worth of Berkshire shares to the Gates Foundation and four family charities. This donation stands as his largest annual contribution since he began giving away his fortune in 2006, and comes as a part of his long-standing commitment to philanthropy.

The 94-year-old billionaire donated a total of 9.43 million shares to the Gates Foundation and 943,384 shares to the Susan Thompson Buffett Foundation. Additionally, 660,366 shares were allocated to charities run by his three children: the Howard G. Buffett Foundation, the Sherwood Foundation, and the NoVo Foundation, news agency Reuters reported. This donation follows his previous contributions, which included $5.3 billion last June and another $1.14 billion in November.

Buffett’s net worth prior to this generous act was estimated at $152 billion, making him the world’s fifth-richest person according to Forbes. Following this donation, his ranking will change to sixth. Despite this significant giving, Buffett remains a major shareholder, owning 13.8% of Berkshire’s stock. “In a statement, Buffett maintained he does not intend to sell any Berkshire shares.”

Berkshire Hathaway, under Buffett’s leadership since 1965, has consistently outperformed the market with Class A shares delivering a return of 5,884,143% as of June 18. In comparison, the S&P 500 has gained around 40,000% since the mid-1960s. His investment philosophy, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” underscores his strategy.

Buffett’s charitable giving is part of a broader plan he set in motion years ago. Last year, he updated his will to allocate 99.5% of his remaining fortune to a charitable trust overseen by his children, giving them a decade to distribute the funds. The decisions regarding the distribution require unanimous consent among his children.

Berkshire Hathaway’s portfolio includes a vast array of businesses and stocks, such as Geico and BNSF railroad, as well as stakes in Apple and American Express. Despite the market’s high valuation, which he often measures using the “Buffett Indicator”, Buffett remains cautious. He has been a net seller of stocks for ten consecutive quarters, citing the market’s high prices as a concern.

“Buffett has long championed the market cap-to-GDP ratio, also known as the ‘Buffett Indicator,’ as a reliable barometer of market valuation.” This indicator is nearing 201%, just below its record high, which contributes to Buffett’s cautious approach to new investments. His focus remains on maintaining financial prudence and strategic giving.

Warren Buffett’s latest donation not only signals his commitment to philanthropy but also highlights his strategic approach toward wealth management. By distributing a substantial portion of his fortune, he continues to influence both the financial and philanthropic landscapes. This enduring impact of his generosity is set to be managed by his family, ensuring that his legacy of giving persists for years to come.