Warren Buffett's Gift To Gates Foundation Brings Hope And Problems

(CBS/AP) 
The money from Buffett, who is 75 but considered strong and healthy, comes with a significant catch. The letter says Buffett wants all his money to be distributed in the year it is donated, not added to the foundation's assets for future giving. The foundation gave away $1.36 billion in 2005, so the Buffett commitment would effectively double its spending.

"What you should expect from us is that we'll really deepen the areas that we're already into," Melinda Gates said. "We're not going to broaden the foundation a whole lot of new areas, but really deepen our commitment already to global health and particularly to education, so I know Bill and I are delighted — not only about the gift, but in particular about getting to work with Warren and we're very, very excited about it."

Buffett had said he would give away 12,050,000 Class B shares of Berkshire Hathaway stock to the five foundations. The shares fell $28, or 0.9 percent, to close at $3,043.01 in Monday's trading on the New York Stock Exchange.

The gifts would be worth nearly $37 billion, which represents the bulk of the $44 billion that Buffet's stock holdings are worth today. Five-sixths of the shares will be earmarked for the Gates Foundation.

In his letter to the Gates Foundation, Buffett said he admired the foundation and wanted to extend its "future capabilities." Until now, all the money given away by the Gates Foundation has come from the couple.

In a statement over the weekend, Bill and Melinda Gates spoke of their relationship with Buffett over the past 15 years and his influence on their philanthropy.

"Warren has not only an amazing intellect but also a strong sense of justice. Warren's wisdom will help us do a better job and make it more fun at the same time," they said. The couple said they were "awed" by Buffett's decision.

The Buffett pledge also requires that Bill and Melinda Gates remain alive and active in the policy-setting and administration of the foundation. Buffett plans to give each foundation 5 percent of his total pledge each year in July.

Bill Gates, the world's richest man, announced earlier this month that he would be stepping back from his day-to-day responsibilities at Microsoft Corp. in July 2008 so he can spend more time on the Seattle-based foundation. The foundation followed his announcement by saying Melinda Gates would also be taking a more active role in their philanthropic work.

Buffett, the world's second-richest man, said in an interview with Fortune magazine that the timing of the two announcements — one week apart — was just "happenstance."

Buffett's gift is "really significant," not just for its size but for its potential to encourage other giving, said Diana Aviv, president and CEO of Independent Sector, a nonprofit coalition of about 550 charities, foundations and corporate giving programs that includes The Gates Foundation.

"I'm sure there are lots of young, wealthy individuals who have made their fortunes and who are watching this very carefully," she said. "These business leaders are icons."