June 27, 2010

DONATION GUIDELINES FROM WARREN BUFFETT, BILL GATES AND MELINDA GATES

Fortune - $600B challenge (June 16, 2010)
A philanthropic family on balance is going to feel better about themselves and their progeny than a family that has been hanging on to every single penny. --- Warren Buffett

What we give depends on what we have and how much we care.

We often become more philanthropic as we age. What if figured out our plans for giving now? This doesn't mean you must give now (though you could).

If you don't have the amount you want to give, you then have an opportunity to save. You can also look at nonfinancial gifts.

Financial Gifts

Let's start with these. What's a reasonable amount to give? The answers will vary.

Bill, Melinda and Warren want other US billionaires to donate at least 50% of their net worth while alive or upon death. That amounts to $600 billion dollars. A billionaire can easily donate 50% today and still live in comfort since they'd have at least $500 million left. Setting this relatively low bar helps encourage participation. Later, the amounts donated could increase.
My hope for this is that it takes on this momentum not only with the billionaires but that it expands out.  I do think there's a crowd mentality. It becomes the right thing to do. And so, more will because others are doing it. --- Melinda Gates

The pledges will show on the Giving Pledge website but there's no binding legal commitment to follow through. Here's a video summary. You'll find links to more details at the bottom of this post.

Warren is donating 99% of his net worth. Bill and Melinda are donating 95%. We're not billionaires but can also be philanthropic.

A Simple Formula

No one ever said to me, 'We gave more than we should have.'
--- Bill Gates
How do you figure out how much to give? This formula has three steps
  1. Figure out how much you and your spouse need for the rest of your lives.
  2. Figure out how much you want to leave to your heirs. ("A very rich person should leave his kids enough to do anything, but not enough to do nothing." --- Warren Buffett)
  3. Donate the rest.
Anyone can use this formula. The challenge is figuring out the amounts in the first two steps. What if you live another billion seconds? If your donation takes place through your estate after both you and your spouse have died, you won't have much worry over running out of money. That's the biggest fear that Napoleon Hill identified in 1937.

Nonfinancial Gifts

You don't have to give money. You can donate something more personal and precious your time and attention. You have as much as any billionaire.

Links


Podcast 72 (3:38)


direct download | Internet Archive page

PS Leveraging lets you donate more. We'll look at how next time.

3 comments:

  1. My ImageSeptember 3, 2010 at 7:23 AM

    "We make a living by what we get. We make a life by what we give". It is said that "we make a living by what we get and we make a life by what we give". For the many of us in the poorest parts of the world, this is a life saving initiative. We pray that other Billionaires will heed to this call. Thanks to Warren Buffett, Bill Gates and Melinda Gates. May God continue to Bless you and your families.
    Matthew Alpha Jabati: Freetown, Sierra Leone

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  2. AnuduchukwuNovember 1, 2010 at 11:16 AM

    For those who want to be like Bill and Melinda Gates and Warren Buffet.
    I have this to tell you.Your ability or inability to cross the waters of life has;and ever will determined by the seeds of your thoughts.If you think you can,you have to think again,because if a seed does not die,it abides alone.

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  3. Julie WatsonFebruary 16, 2011 at 2:05 PM

    It is really very nice to see big name involving in charity.I think all who are capable of doing charity must do it no matter how big it is. Your small thing will be very big for some other.
    All the best to Bill Gates, Melinda Gates and Warren Buffett.

    ReplyDelete