Could someone please explain why Warren Buffett has just given a huge chunk of money to Bill Gates? Yes, I know, it’s to the Gates Foundation and it’s for charitable purposes; but why funnel it through someone else’s foundation? The tax advantages actually run the other way, at least for Charitable Remainder Trusts: the deduction is 30% for contributions to public charities and only 20% for contributions to private foundations.
This form of donation does allow the older billionaire some dead-hand control over the funds. If they went to a Warren Buffett Foundation (surprisingly, there isn’t one–the Buffett-related foundations are named for his late wife and children and controlled by the children), it could turn out like The Ford Foundation, giving away money to causes that would have Henry Ford spinning in his grave. But if the money goes to the Gates Foundation, whose founder is youngish and vigorous and has an even younger wife, Buffett can be reasonably sure that even after he’s beyond caring, his money will go on being spent–just as Bill Gates pleases.
Why would someone go to the trouble of arranging to have his money given away at someone else’s pleasure? If you’re concerned about the future, why not give your money away in the present, to charities of which you approve? Am I missing something?
Tags: Private Philanthropy