I couldn’t wait to get my hands on Tap Dancing to Work, a collection of Fortune writings by and about Warren Buffett that trace the arc of his career from 1966 to the present.
Another hat I wear is chairperson of Heritage Fund-The Community Foundation of Bartholomew County, so I was particularly interested to read about Buffett’s philosophy on philanthropy.
In June of 2010, Buffett and Bill and Melinda Gates announced the Giving Pledge. It was their effort to convince the richest Americans to gift at least 50 percent of their wealth to philanthropy during their lifetimes or at death. Buffett’s letter announcing his pledge is reprinted in full in the book and at www.givingpledge.org.
“More than 99 percent of my wealth will go to philanthropy during my lifetime or at death. Measured by dollars, this commitment is large. In a comparative sense, though, many individuals give more to others every day,” Buffett wrote.
“Millions of people who regularly contribute to churches, schools and other organizations thereby relinquish the use of funds that would otherwise benefit their own families. The dollars these people drop into a collection plate or give to United Way mean forgone movies, dinners out or other personal pleasures. In contrast, my family and I will give up nothing we need or want by fulfilling this 99 percent pledge.
“Moreover, this pledge does not leave me contributing the most precious asset, which is time. Gifts of this kind often prove far more valuable than money. A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check.
“What I can do, however, is to take a pile of Berkshire Hathaway stock certificates — “claim checks” that when converted to cash can command far-ranging resources — and commit them to benefit others who, through the luck of the draw, have received the short straws in life.
“My wealth has come from a combination of living in America, some lucky genes, and compound interest. My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions.
“In short, fate’s distribution of long straws is wildly capricious.
“The reaction of my family and me to our extraordinary good fortune is not guilt, but rather gratitude. Were we to use more than 1 percent of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99 percent can have a huge effect on the health and welfare of others.
“That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs. My pledge starts us down that course.”
With the year coming to a close and the charitable deduction under threat, Buffett’s thoughts are particularly timely.
Mickey Kim is the chief operating officer and chief compliance officer of Columbus-based investment adviser Kirr Marbach & Co. He can be reached at 376-9444 or email@example.com.