Buffett to give away billions
Buffett is preparing to give about 85 percent of his $44 billion fortune to charity.
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(CNN) -- Warren Buffett, the world's second-richest man, said he will soon start giving away almost all of his fortune to charity, most of it going to a foundation controlled by the world's richest man, Bill Gates, Fortune magazine reported Sunday.
Buffett, who amassed his $44 billion fortune over the last three decades through his control of Berkshire Hathaway, will start transferring his stock in the company over to five foundations this year. The largest portion -- five-sixths -- will go to the Bill and Melinda Gates Foundation, Fortune said.
At today's price, the 85 percent of his stock to be given away is worth about $37 billion. The actual value of the donation would depend on the stock's value at the time of transfer, which will take place over several years.
The death of Buffett's wife, Susan, in 2004 spurred him to step up plans to start the giveaway, since he had expected she would oversee his foundation after his death, Buffett told the magazine (Full story).
"I know what I want to do and it makes sense to get going," he said.
At 75, he said he is in good health.
Buffett said he chose the Gates Foundation because "I came to realize that there was a terrific foundation that was already scaled-up -- that wouldn't have to go through the real grind of getting to a megasize like the Buffett Foundation would -- and that could productively use my money now."
He said he has become good friends with the Gates and has "grown to admire what they were doing with their foundation."
"I've seen them give presentations about its programs, and I'm always amazed at the enthusiasm and passion and energy they're pouring into their work. They've gone at it, you might say, with both head and heart," Buffett said.
"I don't think I'm as well cut out to be a philanthropist as Bill and Melinda are," he said.
The Gates Foundation focuses mostly on international health programs -- fighting malaria, HIV/AIDS and tuberculosis -- and on improving U.S. libraries and high schools, Fortune said. Buffett will join the Gates Foundation board.
Bill and Melinda Gates issued a written statement Sunday saying they were "awed" by Buffett's decision.
"Over the past 15 years, we have enjoyed a special friendship with Warren, and his advice has had a major influence on us. Warren has not only an amazing intellect but also a strong sense of justice. Warren's wisdom will help us do a better job and make it more fun at the same time," the Gates' statement said.
Buffett said his children control the other foundations to get the stock, but he will not leave them "huge amounts" for their personal use. He said his philosophy is "that a very rich person should leave his kids enough to do anything but not enough to do nothing."
Berkshire stockholders have nothing to worry about, he said, because the potential sale of his stock by the foundations will not drag down the price.
"Let's say the five foundations sell all the stock they get this year," he said. "If trading volume continues as it has, their selling will raise turnover to less than 17 percent. It would be ridiculous to think that much new selling could affect the price of the stock."
Buffett told Fortune that he was making just $50,000 a year when he bought control of Berkshire in the early 1970s, using $15 million earned when he disbanded a partnership.
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