Buffet pledges $30.7B donation to Gates Foundation

IDG News Service - Microsoft Corp. Chairman Bill Gates may never see a more generous donation to the foundation run by him and his wife: a $30.7 billion pledge from the world's second-richest man, famed investor Warren Buffett.

The "Oracle of Omaha," as Buffett is known because of his stock-picking ability, yesterday posted letters on his company's Web site pledging to give away more than $37 billion to five charitable foundations.

The largest donation will nearly double the size of the Bill & Melinda Gates Foundation's assets, to around $65 billion, and make it the biggest charitable foundation in the world. The former No. 1, the Stichting INGKA Foundation, is a Netherlands-registered charity established by Ingvar Kamprad, founder of Swedish home furnishings giant Ikea. Its assets have been estimated at $36 billion.

In the first year alone, Buffett's initial contribution will allow the foundation to increase its annual giving by $1.5 billion.

"I greatly admire what the Bill & Melinda Gates Foundation is accomplishing and want to materially expand its future capabilities," Buffett said in the letter. "You have committed yourselves to a few extraordinarily important but underfunded issues, a policy that I believe offers the highest probability of your achieving goals of great consequence."

Bill and Melinda Gates quickly responded to Buffett's generosity.

"We are awed by our friend Warren Buffett's decision to use his fortune to address the world's most challenging inequities, and we are humbled that he has chosen to direct a large portion of it to the Bill & Melinda Gates Foundation," they said in a letter, adding that they have enjoyed a "special" 15-year friendship with Buffett. Bill Gates has played bridge with Buffett for years, and last December the two anted up $1 million to fund a program to teach the card game to junior high school students in the U.S.

Gates also sits on the board of directors at Berkshire Hathaway Inc., the company Buffett runs his investments through.

Buffett pledged to give the foundation 10 million shares of stock in Berkshire Hathaway, in allotments over a stretch of time. The initial contribution, to be made next month, will be 500,000 shares of B-class stock in Berkshire Hathaway. Each July thereafter, 5% of the remaining shares will be handed over to the foundation.

The billionaire cited only a few stipulations to his largesse, including one that his shares continue to be given to the foundation only so long as either Bill or Melinda Gates remains alive and active in its operations. The foundation must also satisfy legal requirements to qualify Buffett's gift as charitable so it is not subject to taxes.