Warren Buffett's Kids Will Be the Most Powerful Philanthropists on Earth

In late June, in an interview with the Wall Street Journal, 94-year-old billionaire investor Warren Buffett confirmed a suspicion that had been percolating through the philanthropic sector—and could potentially transform it. Buffett made clear that, upon his death, his fortune of close to $140 billion in Berkshire Hathaway stock would go into a charitable trust that his three children, Susie, Howard, and Peter, would jointly administer—and would need to disburse, by unanimous agreement, within a decade of his death. One condition, which Buffett explicitly addressed, was that none of the money would go to the Gates Foundation, which has been the recipient of more than $40 billion from Buffett over nearly two decades. Buffett was giving readers a heads-up: Out of his estate would emerge one of the largest concentrations of philanthropic resources in the world.

That announcement served as a bookend to another, made almost exactly 18 years before, which also shook the philanthropic sector. At the time Buffett could have pledged to channel his wealth through the foundation of his recently deceased wife, Susan, and the relatively new foundations started by each of his kids. But at an event held at the main branch of the New York Public Library, Buffett told those assembled that he planned to give the bulk of his fortune to the Bill & Melinda Gates Foundation. At the time the Gates Foundation was already the nation’s largest; with the steady stream of annual gifts that Buffett pledged, it would become a behemoth. As one scholar told the New York Times, “I’m not sure at any time in history have we ever seen someone give away a sum of money that large to another foundation… Most people with this sum of money would try to create their own foundation in their own image.”

Buffett’s initial declaration was iconoclastic, because it flew in the face of one of the norms of the philanthropy world: that philanthropy was, and should be, an expression of the personal interests, affiliations, and prerogatives of the donor. There was plenty of narcissism and solipsism built into this approach, as well as a regard for family legacy. But at its best it honored one of the highest ideals of American civil society: pluralism, the let-a-thousand-flowers-bloom belief that a wide range of views and interests is both a good in itself and one that, in turn, will serve the common good.

Wealthy individuals have long delegated their giving to a professional staff, but in putting most of his philanthropic chips on the Gates Foundation, Buffett went even further. He approached philanthropy in the same dispassionate way he did his investments, seeking to maximize his philanthropic returns by handing off responsibilities to an already established institution (overseen by his close friend Bill). As he explained at the time, “What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it? Who wouldn’t select Tiger Woods to take his place in a high-stakes golf game? That’s how I feel about this decision about my money.”

Does Buffett’s new announcement mean he has rethought this strategy—that he wants a chance on the fairway himself? For many years there have been whispers that he was dissatisfied with the growing bureaucracy and operating costs of the Gates Foundation—with an endowment of more than $75 billion, it now has more than 2,000 employees and some nine offices around the world—and believed it had lost some of its entrepreneurial mojo. And he was reportedly upset by the revelations of Gates’s alleged infidelity and his association with Jeffrey Epstein, which were cited by Melinda as one of the reasons for the couple’s divorce in October 2021. (A month after the announcement, Buffett stepped down from the foundation’s board, leaving Bill and Melinda for a while as its only members.)

But this theory is undercut by the fact that, while he’s still alive, Buffett is very much still giving to the Gates Foundation; even as he was announcing that none of his estate would go to it, he donated another $4 billion. When Buffett has explained the change in his thinking, he has simply pointed to his increased faith in his children’s ability to deal with the immense fortune. “They were not fully prepared for this awesome responsibility in 2006, but they are now,” he said in a November 2023 letter to Berkshire Hathaway shareholders.

No matter what precipitated the shift, it amounts to a win for philanthropic pluralism. After all, the range of possible approaches and causes that will be served by his posthumous billions has been dramatically expanded: The Buffett children contain philanthropic multitudes. Through the Omaha-based Sherwood Foundation, Susie, the eldest, has embraced a social justice approach to philanthropy, supporting programs “that help make Nebraska a more equitable place to live, work, learn, and play.” She also chairs the Susan Thompson Buffett Foundation, which was established by her father in 1964 and named after his late wife in 2004; it’s the largest private U.S. funder of reproductive health services. Howard’s eponymous foundation, meanwhile, has focused on food security and agriculture in Africa (particularly Rwanda), and more recently has been one of the largest funders of humanitarian assistance to Ukraine. He has also had a longstanding interest in public safety, especially in combating human trafficking; he briefly served as the sheriff of an Illinois county in 2017 and published a book a few years later on Our 50-State Border Crisis: How the Mexican Border Fuels the Drug Epidemic Across America.

The youngest, Peter, an Emmy-winning composer whose NoVo Foundation became a leading funder of progressive causes, especially those related to women and girls, emerged in the 2000s as a fierce critic of what he called the “charitable industrial complex.” Yet in 2020 he announced a major shift in strategy: Peter and his wife Jennifer reduced funding to many of those progressive nonprofits and focused much of NoVo’s funding on community projects in the Hudson Valley, especially in Kingston, New York, where they live, and which they sought to turn into a “farm-to-table utopia,” with its own locally printed currency and music festival.

Somehow, despite these differences, the siblings will have to agree on how to disburse the funds they will be overseeing. Some observers think it’s a recipe for disaster. As one noted, “ ‘Three eccentrics have to agree on how to spend $135 billion’ sounds more like the premise for a sitcom than a process that will accomplish real good.”

But others think that premise is philanthropy’s point. They do not see philanthropic consolidation, even around a worthy collection of causes such as the ones the Gates Foundation pursues, as a good thing. They see a need for the creation of more centers of power in the philanthropic sector. So who is right, the consolidationists or the pluralists? This is a question about principles, but it’s also a question of real world impact. And as such it is one that we will be able to answer only as it plays out over the coming years. Addressing that question should put a spotlight on the underlying values that animate megaphilanthropy. Or, at the very least, we might end up with a decent reality show out of it.

This story appears in the November 2024 issue of Town & Country. SUBSCRIBE NOW