How to give away $150 billion

The philanthropic efforts of Warren Buffett’s children, Susie, Howie, and Peter, are set to make history as they prepare to give away their father’s vast fortune of over $150 billion. This enormous responsibility was thrust upon them when Warren Buffett announced that after his death, his wealth would be directed to a new charitable foundation overseen by his three children. The challenge is not only in the magnitude of the wealth but also in the condition that all three must unanimously agree on how to disburse the funds within 10 years of his death.

Learning from Their Father’s Values

The Buffett children’s approach to philanthropy was shaped by their upbringing in a middle-class household, despite their father’s growing wealth. They took the bus to public school, did chores for an allowance, and had jobs, instilling in them the value of hard work and humility. Their mother, Susan T. Buffett, was also a significant influence, volunteering for various groups and hosting exchange students from around the world. These early experiences have informed their philanthropic efforts, with each sibling focusing on different causes, including early childhood education, social justice, food security, conflict resolution, health, and economic programs for women and children.

Principles of Effective Philanthropy

The Buffett children have identified key principles that guide their philanthropic efforts. Firstly, they emphasize the importance of flexibility, recognizing that the world and its needs are constantly changing. This requires adaptability and a willingness to pivot when necessary. Secondly, they believe in embracing risk and failure, seeing them as opportunities for growth and learning. Howie Buffett refers to philanthropy as the “risk capital of the world,” where making bigger bets, even if they fail, is essential for creating meaningful impact.

Seeing is Believing

The Buffett children also stress the value of firsthand experience and observation. Howie Buffett notes that despite reading reports and research, nothing replaces seeing a problem or population in person. His brother Peter echoes this sentiment, saying, “You won’t know if you don’t go.” This approach allows them to gain a deeper understanding of the issues they are addressing and to make more informed decisions about their philanthropic efforts.

Trust but Verify

Given the scale of their philanthropy, developing trust and accountability is crucial. The Buffett children have learned to work with partners they can rely on, building relationships over time. They also include clauses in their grant letters that allow them to terminate funding at any time for any reason and require that any unused funds be returned. This approach enables them to ensure that their donations are being used effectively and efficiently.

Efficiency and Impact

Finally, the Buffett children prioritize efficiency in their philanthropy, mirroring their father’s approach to business. They aim to keep operating costs low, with Howie Buffett’s foundation boasting a mere 1.3% in operating costs versus money distributed. This lean approach allows for quick decisions and bold bets, enabling them to make a more significant impact with their donations. As they prepare to embark on this historic giving campaign, the Buffett children are poised to make a lasting difference, guided by the principles of flexibility, risk-taking, firsthand experience, trust, and efficiency.