Saturday, June 6, 2015

Warren Buffett On How Business And Philanthropy Are Alike & Completely Different

I found a great article regarding a recent talk between Forbes and billionaire Warren Buffett. It was interesting to learn how his views making money and giving back. Check out  an excerpt below.

Warren Buffett
 (Credit: Glen Davis)
Warren Buffett is good at making money. Last year alone FORBES estimates he gained $14.5 billion, which amounts to about $27,600 per minute. That’s around half of U.S. median yearly household income, so in just two minutes Buffett made as much money as the average American family did all year. Yet when the world’s fourth-richest person, worth roughly $69 billion, took the stage Wednesday at the fourth annual Forbes 400 Summit on Philanthropy, the conversation wasn’t about making a fortune, but giving one away. In a lunchtime chat with Forbes Magazine editor, Randall Lane, the 84-year-old Berkshire Hathaway chairman and CEO offered a few insights about how his approaches to philanthropy and building a business empire have been similar in some respects and very different in other ways.

Buffett told the 200 mostly billionaire attendees at the New York Public Library that key to his success has been finding the right person to do the job and delegating responsibility. At Berkshire Hathaway, he has more than 70 managers. He told the story of one in Indiana, who oversees a $4 billion dollar business, yet Buffett has only received two calls from the man in 11 years and has never seen the company’s headquarters (“I hope it’s there,” Buffett joked).

His approach to philanthropy has revolved around delegating too. In June 2006, Buffett sent letters to five charities, pledging to them 85% of his net worth through annual gifts of Berkshire stock. The value of these shares was $37 billion at the time. The top recipient: the Bill & Melinda Gates Foundation, to which Buffett committed 500 million shares of class B stock, then already worth more than $30 billion. He gave 50 million shares to the Susan Thompson Buffett Foundation, which he and his late wife set up in 1964. He also pledged 17.5 million shares to each of his three children’s foundations, which he has since increased. (All share counts adjusted for for a 50-for-1 stock split in 2010.)

Buffett explains the differences between philanthropy and business in the remainder of the article here.

If you're like me and this article leaves you wondering about philanthropy and your own business, this blog is a great resource for info on how your business can  effectively give back.

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