Two decades ago, the Oracle of Omaha made one very costly decision.
Warren Buffett shocked the world in 2006, when he pledged to give away nearly all of his vast fortune. Since then, Buffett has donated more than $55 billion worth of his Berkshire Hathaway to charity, including a $5.3 billion gift in late June that knocked him down two spots on Forbes’ list of the world’s richest people, from 8th to 10th, his lowest ranking in more than two decades. Forbes estimates his net worth to be $128.9 billion.
But what if Buffett, perhaps the greatest philanthropist in history, had instead decided to keep all his Berkshire shares for himself?
Buffett owned 474,998 class A shares, then worth around $43 billion, when he made that historic announcement in the summer of 2006. If he still owned all that stock today, he’d be sitting on a pile of stock worth $292 billion.
Add in another $1 billion or so worth of class B shares and personal investments, and a less charitable Buffett would have a fortune of around $293 billion. That would make him some $41 billion richer than the planet’s current No. 1, Elon Musk (net worth: $252.4 billion); $77 billion ahead of No. 2 Jeff Bezos ($215.9 billion); and $102 billion above No. 3 Bernard Arnault ($191 billion). Instead of being $6 billion poorer than his friend Bill Gates ($135.2 billion), Buffett would be worth more than two Bill Gateses combined.
In other words, if Warren Buffett didn’t decide to start giving away his wealth, he would easily be the richest person on Earth. In fact, by Forbes’ estimates, he would be just a hair shy of breaking the record for having the largest fortune ever recorded, set in 2021 when Musk briefly surpassed $300 billion. With his theoretical $293 billion fortune, Buffett could personally buy the entire McDonald’s Corporation, all of Coca-Cola’s stock or all 50 of the world’s 50 most valuable sports teams.
Instead, the famously frugal Buffett has been working to give away more than 99% of his fortune, mainly through a summer tradition of donations worth billions of dollars to five handpicked foundations from his stash of stock, with each year’s gift being 5% fewer shares than the previous year’s. “My family and I will give up nothing we need or want by fulfilling this 99% pledge,” he once wrote. “I will continue to live in a manner that gives me everything that I could possibly want in life.”
The majority of Buffett’s gifts have gone to a trust that funds the Bill & Melinda Gates Foundation, which has gotten stock worth more than $43 billion at the time it was gifted. The $75 billion (endowment) charity launched by Buffett’s friend and bridge partner Bill Gates and his then-wife Melinda French Gates in 2000 has put the money to use on poverty and healthcare initiatives in developing countries and education and economic mobility in America. In 2010, Buffett cofounded The Giving Pledge alongside the Gateses to encourage other billionaires to donate at least half their fortunes to charitable causes as well. Buffett stepped down as a trustee of the Gates Foundation in 2021. French Gates divorced Gates that same year and left the foundation earlier this month to branch out on her own.
Buffett’s three children and a foundation named for his late wife have gotten the rest of the shares as gifts designated specifically to go to the charities of their choice. More than $4.8 billion worth of shares (at the time of his gifts) went to the foundation named for his late wife, the Susan Thompson Buffett Foundation, which focuses on healthcare and education. (That sum does not include at least $2.9 billion given to the foundation by Susan’s estate following her death in 2004.) And Buffett has given more than $8 billion in total (at the time of his gifts) to his childrens’ three charities: the Sherwood Foundation, the Howard G. Buffett Foundation and the NoVo Foundation.
After nearly two decades of giving, the 93-year-old investor has whittled his Berkshire stake down to 207,963 class A shares, still worth around $128 billion as of July 8. He plans to keep gifting stock to the five foundations each year until his death. But, in a November letter and an interview with The Wall Street Journal published in late June, he said he has decided that what’s left of the Buffett fortune at his death will pass almost entirely to a charitable trust overseen by his children, rather than mainly to the Gates Foundation, as previously believed. When all’s said and done, Buffett and the executors of his estate will have moved more than 99% of his wealth to charity.
“Society has a use for my money,” Buffett—who has lived in the same relatively modest home in Omaha, Nebraska since 1958 and who often stops at McDonald’s for meals, paying in exact change—wrote in 2021. “I don’t.”
This article was originally published on forbes.com and all figures are in USD.
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