Howard Buffett: Here’s Why You Want to Go Out of Business
In 2009, Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) Chairman and CEO Warren Buffett and Microsoft Corp. (NASDAQ:MSFT) founder Bill Gates conspired to do something many thought was inconceivable. Over a series of clandestine dinners attended by some of the world’s wealthiest people — Michael Bloomberg (net worth $27 billion), Kenneth Langone (net worth $2.1 billion), and the like — Gates and Buffett hatched a plan to entice the charitable desires of the world’s billionaires. They created the Giving Pledge, a campaign to encourage the the super rich to commit at least half of their wealth to philanthropy.
The movement, made public in June 2010, has attracted 114 people, the names of whom can be found populating the Forbes billionaires list. Buffett himself has committed to giving away 99 percent of his wealth — nearly $58 billion as of September.
The Giving Pledge seems destined to become one the most significant philanthropic forces on the planet. The aggregate sum of money that has been pledged by this group is in the hundreds of billions of dollars, and if distributed competently, the wealth can have a material impact on the quality of life of millions, if not billions, of people around the world.
The problem, though, is that giving away money in a way that is truly effective is actually very difficult. As charitable individuals and even governments are quick to point out, good intentions can be drowned out by ego and corruption. Money evaporates every time it changes hands, and it is almost always unclear where and how the money should be spent.
But one way or another, Buffett and his kin would argue, the money should be spent: not invested (in the traditional sense), not used to form a foundation whose goal is to propagate influence infinitely into the future, but put it use as quickly as is reasonably possible.
Urgency is not always thought of as a resource, but it is something that people can manufacture and then later use to increase productivity. One way to manufacture urgency, Howard Buffett (Warren Buffett’s son) suggests, is to set out to put yourself out of business.
“If you think about being out of business,” he told Bloomberg Television in a recent interview, “then you have more urgency to it. You focus better. You’ll select things that you’re best at and not try to be everything to everybody … an endowment to me is really in a way a waste of money because you ought to be spending it, and using and changing things.”
In the same interview, Warren Buffett said that the money he is giving away will have to be spent within 10 years of his estate being closed. “I don’t want somebody 40 years down the line, who knows who they would be, spending the money,” he said.
Some notable people who have signed the pledge include Facebook (NASDAQ:FB) founder Mark Zuckerberg, Oracle (NASDAQ:ORCL) founder Larry Ellison, needs-no-introduction George Lucas, and Tesla (NASDAQ:TSLA) founder Elon Musk.