The Buffett Universe: A Surprising Look at the Most Powerful Family in U.S. Philanthropy

Warren Buffett and his three kids now give away more money annually than any family in the world. Yet since that giving goes through different vehicles and to disparate causes, people don't often stop and study the big picture, or appreciate just how much financial and human capital the Buffetts have mobilized for their giving, and how far their reach now extends.

In my view, the Buffetts are the most powerful family in U.S. philanthropy. And so I thought it'd be useful to take a spin through the Buffett universe, explaining who's who and what's what. 

Warren's Wealth

The sun in this universe, needless to say, is Warren Buffett. And the thing about Buffett is that he's always been, and remains, far more interested in making money than in taking a hands-on approach to giving it away. Buffett has never turned the corner that many older billionaires do, of wanting to dial down work to focus on philanthropy. At 83, he is still keenly interested in his day job and is richer now, with a net worth of $65.6 billion, than he's ever been, despite huge gifts of Berkshire Hathaway stock to the Gates Foundation and the foundations run by his kids. 

The size of Buffett's remaining wealth is both underappreciated and hard to fathom. His fortune is thirteen times larger than the average net worth of other billionaires on the Forbes 400 list and about six times larger than the endowment of the Ford Foundation. 

According to a recent article in the New York Times, Buffett has given $13 billion so far to the Gates Foundation in Berkshire Hathaway stock and is committed to giving additional stock worth $42.1 billion. More specifically, Buffett pledged in 2006 to give the Gates Foundation five percent of his remaining shares every year, assuming certain conditions are met. Since then, shares of Berkshire Hathaway have more than doubled in value, and so Buffett's annual contributions to the Gates Foundation now amounts to over $2 billion annually. 

While Bill Gates's money forms the core of that foundation's endowment, Warren Buffett is giving more than Gates on an annual basis to fund its operations. A lot more: According to the Times article, Bill Gates gave just $3.7 billion to the foundation between 2002 and 2012, less than a third of what Buffett has given to it in recent years. 

Buffett has also given or committed to give stock to his kids' foundations, estimated in 2012 to have a value of $2.5 billion for each foundation. But since Berkshire Hathaway stock has soared by over 50 percent since 2012, the value of Buffett's commitments to each of those family foundations is now closer to $4 billion. 

And even that figure may understimate how much money will end up in the kids' foundations. In 2012, Buffett said that his combined commitments to Gates and his kids accounted for 90 percent of his stock holdings. Which raises the question: What will happen to the remaining 10 percent, now worth an estimated $6.5 billion? I'd bet on the kids' foundations getting that money. 

And even that $6.5 billion figure may be too small. If the Times analysis is correct, and Buffett will give another $42.1 billion to the Gates Foundation, that would leave around $23 billion left over given his net worth of $65 billion. 

Whatever the exact numbers, they challenge the usual narrative about Buffett's philanthropy—that he's giving some money to his kids' foundations, but nearly all the big money is going to the Gates Foundation. As it turns out, Howard, Susan, and Peter may end up controlling far larger foundations than anyone realizes.

So what are the Buffett kids going to do with all that money? 

Susie's Mission

Earlier this year, we named Susan Buffett (known as Susie) as the second most powerful woman in U.S. philanthropy, just after Melinda Gates. And for good reason: Susie is firmly in control of the Susan Thompson Buffett Foundation (named after her late mother), which is the largest foundation in the Buffett universe with assets that stood at $2.4 billion in 2012 and grantmaking of $367 million that year, ranking it among the top five foundations by giving. Susie also controls another foundation, the Sherwood Foundation, which gave out $67 million in 2012. My bet is that when we finally get the 2013 financial data, we'll see that the two foundations controlled by Susie Buffett gave away nearly as much money as the Ford Foundation, if not more. 

But the really notable thing about Susie is her relentless focus on reproductive rights and women's empowerment, both domestically and internationally. This was also a passion for her mother, Susan, who died in 2004, and it's the primary focus of the Susan Thompson Buffett Foundation. In fact, STBF is the largest private funder in the world in this sphere, working at the forefront of a struggle that promises to reshape the human experience in the 21st century. In short, Susie is deploying one of the biggest funding streams around to take on one of the top issues of our time. 

All of this is happening largely under the radar. STBF doesn't have a website that fully describes its work or who's leading that work. Weirdly, one of the more comprehensive pieces on this mega funder is an article I wrote earlier this spring, Who's Who At The Secretive Susan Thompson Buffett Foundation?

Peter's Critique

Warren's money has also been flowing to the NoVo Foundation, the foundation that Peter Buffett runs with his wife Jennifer (who we named as the seventh most powerful woman in U.S. philanthropy). Peter ignited a huge debate with his New York Times op-ed last year, but the piece's structural critique of philanthropy, power, and capitalism was hardly surprising to anyone who's been watching NoVo, which is a comparatively radical foundation.

As the National Committee for Responsive Philanthropy said when it gave NoVo its 2013 Impact Award, "NoVo Foundation is dedicated to catalyzing a transformation in global society, moving from a culture of domination to one of equality and partnership."

NoVo was into girls' empowerment well before it hit the mainstream and has been a real leader here. On education, they have pushed back against the marketization and metrification of that sector with a big investment in Social and Emotional Learning. And the foundation has been investing heavily to create local economic systems that are not beholden to corporations and banks.

Thanks to the Times op-ed, Peter has a bigger platform as a philanthropy thought leader, emerging in this role even as NoVo's assets have soared. I've argued here that Peter hasn't fully leveraged that role by moving NoVo more squarely into the inequality debate, but maybe that's not his thing and, anyway, there's still plenty of time and potentially much bigger money destined for NoVo down the line. 

Howard's Urgency

Howard G. Buffett is Warren's oldest son, the one who famously became a farmer. But Howard is much more than that, with interests that include photography and animal conservation. His philanthropy is focused on helping people in poor countries meet their most basic needs for food and water. Most recently, Howard has been spending tens of millions of dollars trying to bring peace to the Eastern Congo.

A few months ago, I wrote that given how the war in Congo is one of the deadliest since World War II, you'd think that any number of big foundations would be all over this issue. In fact, though, the Howard G. Buffett Foundation has probably done more to try to end this horrific conflict than any other U.S. foundation—and Howard himself has been very hands-on, including meeting with leaders in the region to try to push forward peace talks. 

Many experts predict that the coming decades will see increased violence and instability as a result of climate change and resource competition, trends that amplify the importance of funders like Howard Buffett, who focus on the core needs of the world's poorest people and can react to new circumstances. For instance, Howard never set out to work on security issues, but was compelled to act as he saw how war created food insecurity in Africa. Buffett has said, "Conflict undermines and prevents every imaginable form of human and economic progress. Without peace, anything we try to achieve in development will fail." 

As the assets of his foundation swell inexorably in coming years, Howard will have plenty of resources to keep focusing on security on top of his longer-term work on food and water.  

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Here's one thought as we wrap up our tour of the Buffett universe: It's a damn shame that Warren committed so much of his money to the Gates Foundation.

Why? Because Bill and Melinda have plenty money of their own not yet committed to philanthropy, $78.1 billlion as of this writing, and more than enough to finance the very specific approach to giving of their foundation. 

Meanwhile, Warren's kids are pursuing a range of alternate strategies to improving the world, all of which are crucial in their own way. With more money, they could have an even bigger impact. 

Warren Buffett has become rich through investing in a diversified portfolio. Too bad he hasn't yet taken more of this approach as a philanthropist.