Berkshire Hathaway CEO Warren Buffett listens to a shareholder in this 2014 file photo. REUTERS/Rick Wilking/Files
Berkshire Hathaway CEO Warren Buffett listens to a shareholder in this 2014 file photo. REUTERS/Rick Wilking/Files

As part of Warren Buffett’s plan to give away nearly all of his wealth, the billionaire donated $2.8 billion in Berkshire Hathaway stock to five charities this week.

A regulatory filing with the Securities and Exchange Commission shows Buffett donated about 21.73 million Class “B” shares of Berkshire to five charities on Monday. About 16 million shares — worth more $2.1 billion — went to the Bill and Melinda Gates Foundation.

The remainder of Buffett’s donation went to four of his family charities. Gifts worth $215 million went to the Susan Thompson Buffett Foundation, named for his late first wife. It provides education scholarships. Charities run by Buffett’s children Howard, Susan and Peter also received donations worth $150 million each.

The $2.8 billion is the most that Buffett has donated to charities since he began making annual gifts in 2006, showing that Buffett is committed to giving away an unprecedented sum of money in his lifetime, says Rebecca Riccio, director of the Social Impact Lab at Northeastern University.

She says Buffett considers these to be smart philanthropic investments because he trusts the Gates Foundation to use his money effectively in a way that is aligned with his personal values and interests.

“He wants it to be used wisely, but acknowledges that he doesn’t have the time or expertise required to engage in effective grant making,” Riccio said. “Instead, he takes what he calls a ‘wholesale approach’ by leveraging his talent for identifying good investment opportunities, and making a small number of extremely large gifts to the Gates Foundation.”

The Gates Foundation is operated by the world’s second-richest man, Bill Gates, and the charity is focused on ending world poverty, improving birth control technology and aiding education. But the fact that the Gates Foundation received a majority of Buffet’s record-breaking donation was “striking” to some experts.

As opposed to his very hands-on approach to investing, Buffett has delegated much of this philanthropic responsibility to the Gates Foundation, says Benjamin Soskis, a fellow at the Center for the Study of Nonprofits, Philanthropy and Policy at George Mason University.

“This reflects his trust in Gates and his sense that Gates and his staff could spend the funds more effectively than he could,” Soskis said. “But it also reflects a sort of agnosticism at the heart of the Giving Pledge that he and Gates spearheaded.”

In 2010, the Giving Pledge  – a public initiative created by Buffett and the Gates Foundation – launched to spread the commitment among the wealthiest individuals to donate the majority of their wealth to charity. One hundred-and-twenty-seven individuals and families have signed on, and Gates leads all pledged givers with $28 billion of giving.

Buffett has pledged to give away 99 percent of his fortune and has already given away nearly $23 billion, although he hasn’t been as vocal as expected to speak about his philanthropy approaches or the best strategy he thinks to use his money.

“What is important is that billionaires turn over much of their wealth to philanthropy — not the specific causes or institutions that receive their funds. And so even now it’s hard to define Buffett’s philanthropy in any clear way — as opposed to his children’s or wife’s,” Soskis said.

Last July, the Gates Foundation received more than 17 million shares of Berkshire stock — worth about $2 billion. In July 2012, Buffett gave $1.5 billion to the Gates Foundation. The annual gifts can be traced back to 2006.

  • August 24, 2006: $1.6 billion from the first installment of the gift from Warren Buffett.
  • July 11, 2007: $1,76 billion
  • July 1, 2008: $1.8 billion
  • July 1, 2009: 1.25 billion
  • July 1, 2010: $1.6 billion
  • July 7, 2011: $1.5 billion
  • July 6, 2012: $1.5 billion
  • July 8, 2013: $2 billion

Stanley N. Katz, director of the Princeton University Center for Arts and Cultural Policy Studies, said he was “surprised and disappointed” when he first heard of Buffett’s long-term donation to the Gates Foundation and thought the decision was a “mistake.”

“The Gates Foundation is already too large a charity and it is very hard to be careful and judicious enough when making investment decisions at such a large scale,” Katz said.

“A foundation as large as the Gates Foundation is likely to have impact on public policy. But it does that without any participation in the democratic process. And I think that is frequently a problem,” Katz said, citing the example of the Gates Foundation making investments and donations in elementary and secondary education where it has had major influence on public policy.

“No one knows exactly about what Buffett’s personal philosophy of philanthropy is,” Katz said. “It is admirable of him to decide giving away most of his fortune in his lifetime, but he should be more forthcoming and more articulate about his philanthropic philosophy and how he wants to have his money be put in good use.”

Buffett still controls nearly 20 percent of Berkshire’s stock, which made him worth $65.8 billion on Monday, Forbes reported. He has been giving away Berkshire stock since 2006, but he still controls roughly 34 percent of the voting power since his 321,000 “Class A” shares carry more voting rights.