How to donate $150 billion

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for wealthy investors and consumers. Register to receive future editions, straight to your inbox.

When Peter Buffett learned that he and his siblings would be responsible for sharing the fortune of their father, Warren Buffett, his response was clear.

“I didn’t want it,” Peter Buffett told CNBC. “I called him and said, “I want to unsubscribe.” » He said, “I don’t blame you.” This obviously puts enormous pressure on us. »

In 2024, Warren Buffett announced that after his death, his fortune would be directed to a new charitable foundation overseen by his three children, Susan A. (Susie) Buffett, Howard G. (Howie) Buffett, and Peter Buffett. The 95-year-old’s wealth is now estimated at more than $150 billion, according to Bloomberg.

To add to the challenge, the legendary investor requested that all the money be distributed within 10 years of his death. Another trap: all three must unanimously agree on how to disburse the funds.

The scale of Buffett’s wealth means his children will have to give at least $15 billion a year, which would equate to about 4% of annual charitable giving in America, according to data from Giving USA through 2024. The amounts are likely to rise further over time as Buffett’s fortune continues to grow.

“It’s something that no one has done, certainly not as a family,” Howie Buffett said.

Susie Buffett adds: “It’s so much money.”

The inheritance suddenly thrust Buffett’s quiet children into the spotlight. After Warren Buffett’s death, Susie, Howie and Peter would become three of the world’s most important philanthropists, scrutinized by the media, widely followed by other wealthy donors and bombarded with requests for funds.

In a rare interview with CNBC’s Becky Quick, the three Buffett heirs said their worldview, priorities and approach to philanthropy began in the Buffett household. As their father’s wealth began to grow, the children led middle-class or upper-middle-class lives. They took the bus to public school every day. They did household chores for a stipend and had jobs.

Warren Buffett drove a blue Volkswagen when they were growing up, they said. Their mother, Susan T. Buffett, volunteered for various groups and hosted exchange students from around the world. When Susie Buffett was in elementary school, she remembers having to fill out a census form listing her father’s occupation and her mother telling her to write “security analyst.”

“I thought he was checking the burglar alarms,” Susie Buffett said.

As they started their own families and found their own causes, the Buffett children became philanthropists. Since 2006, the long Berkshire Hathaway The CEO has donated company stock to each of the three children’s foundations each year, giving each of them more than 20 years of philanthropic experience.

Susie Buffett lives in Omaha, Nebraska, and focuses on early childhood education and social justice, through the Susan Thompson Buffett Foundation and the Sherwood Foundation. Howie Buffett, who lives in Illinois and runs the Howard G. Buffett Foundation, is spending more of his time and resources overseas, working on food security and conflict resolution. Peter Buffett, who lives in upstate New York and runs the NoVo Foundation, works on health and economic programs for women and children.

Warren Buffett didn’t give the siblings explicit instructions about money, they say. His only advice is that it be used for the “less fortunate,” Peter Buffett said. In his 2024 Thanksgiving letter, Warren Buffett explained his confidence in giving them so much money and such discretion.

“I know all three well and trust them completely,” he wrote. “The period 2006-2024 gave me the opportunity to observe each of my children in action and they learned a lot about large-scale philanthropy and human behavior. They like to be financially comfortable, but don’t care about wealth. Their mother, from whom they learned these values, would be very proud of them. Me too.”

Susie, Howie, and Peter will likely each focus on different causes, while also funding joint efforts. The requirement that all disbursements be unanimous is both a challenge and a blessing, they say, since each sibling can blame themselves if they don’t want to fund a cause.

“It makes it very easy to say no,” Susie Buffett said. “It’s like, ‘I’m sorry, I’d like to do it, but my brothers would hate it. So call them.'”

As the Buffetts prepare for a historic giving campaign, here are five principles and strategies they say they’ve learned about using capital and philanthropy effectively:

As the world is constantly changing with its needs, philanthropists must adapt quickly. The great causes they support can change, as can the individual organizations and people they support.

Warren Buffett “always said, ‘This is what I think matters now. I don’t know if that will be true 20 years after I die or 10 years after I die,'” Susie Buffett recalls.

Howie Buffett said that financing programs in Africa, for example, often require working with governments, which also change.

“We work in many places where things can happen quickly, like in eastern Congo or elsewhere. So you need flexibility,” he said.

Howie Buffett called philanthropy “the venture capital of the world” and said foundations need to make bigger bets, even if they fail.

“Sometimes things don’t turn out the way you think,” added Susie Buffett. “Sometimes it’s a good thing. We learn from it.”

She added that being in Omaha, out of the spotlight, also allows for more experimentation.

“My team has said to me many times, ‘It’s refreshing to be in a place where we can make mistakes, we can make mistakes,'” Susie Buffett said, noting that her team rarely goes to conferences, where other nonprofit leaders are more risk-averse and “afraid to go back and talk about things that might not work.”

However, not all failures are worth celebrating: “It’s not okay if you really made a mistake and did something you shouldn’t have done,” said Howie Buffett, “but if you failed for reasons that you knew might be a challenge, then that’s okay.”

Philanthropists can read all the reports and research on a topic, but there is no substitute for directly encountering an issue or population.

“I have been to Africa 97 times and the 98th time I “Go to Africa, I’ll learn something new,” said Howie Buffett. “Any time you put yourself in a dynamic environment, you see things.”

His brother Pierre has his own saying: “If you don’t go, you won’t know.”

When Peter Buffett started his foundation, he said he felt he could “change the world.” He then visited Sierra Leone, Liberia and Bangladesh and said the scale of the needs was “overwhelming”, he said. “Slowly we recanted.”

Among his current projects is helping the community of Kingston, New York, close to home, where he can stay close to the fabric of daily life and discover what causes are most effective.

“I had to be in a place where I could be there every day,” he said.

Giving away more than $150 billion will require writing mega-checks for hundreds of millions or even billions of dollars. Typically, only governments and large institutions can handle such large donations. Yet, as Howie Buffett said, “I don’t really trust them to make good decisions, otherwise they have big overhead.”

Developing trust and responsibility is essential. Howie Buffett said his grant letters always include a clause that they can end the money at any time and for any reason. It also includes a “no-cost extension” provision, which requires any remaining funds from a budgeted project to be returned rather than spent on other projects.

Over time, he said he found nonprofits and groups they could rely on.

“We have five or six partners that we regularly give tens of millions of dollars a year to,” he said. “And we’ve built that trust. You know how they operate. They know what your expectations are.”

Trust also involves sharing negative results: “I want every bad news if there is bad news,” Susie Buffett said. “You have to be very clear with people, like ‘I want to hear everything.'”

Just as Warren Buffett maintained a famously low-cost structure in his life and at Berkshire, the Buffett family has learned to make the most of every dollar invested in their philanthropy.

Howie Buffett has said that his foundation’s “distribution percentage,” that is, operating costs relative to the money distributed, is only 1.3 percent.

“It was just ingrained in us,” he said. “We know this is what our father would expect us to do.”

Having a small staff and team also allows for quick decisions, similar to Berkshire’s culture.

“I’ve been to places where I made a $50 million decision after a two-hour meeting,” Howie Buffett said. “It’s like, ‘We want to do this, we’re going to spend money.'”

Moving quickly with bold bets runs counter to many foundations, which can struggle with different levels of decision-makers and bureaucracy.

“They have to have a board meeting, and then the directors have to review it and vote on it, and that just drags it out,” Susie Buffett said. “People are always amazed that we do it.”