How the Buffett family plans to give away more than $150 billion

When Peter Buffett learned that he and his siblings would be in charge of giving away their father, Warren Buffett’s fortune, his response was clear.

“I didn’t want it,” Peter Buffett told CNBC. “I called him and said, “I want to unsubscribe.” He said, “I don’t blame you.” It obviously puts enormous pressure on us.”

In 2024, Warren Buffett announced that after his death, his fortune would be spent on a new charitable foundation overseen by his three children, Susan A. (Susie) Buffett, Howard G. (Howie) Buffett and Peter Buffett. According to Bloomberg, the 95-year-old’s fortune is now estimated at more than $150 billion.

To add to the challenge, the legendary investor requested that all the money be given away within ten years of his death. Another catch: all three must agree unanimously on how the money should be paid out.

The size of Buffett’s wealth means his children will have to give away at least $15 billion a year, which amounts to about 4% of annual charitable giving in America, according to data from Giving USA through 2024. The amounts are likely to increase over time as Buffett’s fortune continues to grow.

“It’s something that no one has done, especially as a family,” Howie Buffett said.

Susie Buffett adds, “It’s just so much money.”

In a rare interview with CNBC’s Becky Quick, the three Buffett heirs said their worldview, priorities and approach to philanthropy started in the Buffett household. As their father’s wealth began to grow, the children lived middle-class or upper-middle-class lives. They took the bus to public school every day. They did odd jobs for benefits and had odd jobs.

Warren Buffett drove a blue Volkswagen Beetle when they were growing up, they said. Their mother, Susan T. Buffett, volunteered for various groups and hosted exchange students from all over the world. When Susie Buffett was in elementary school, she remembers having to fill out a census form with her father’s occupation and her mother telling her to write “security analyst.”

“I thought he was checking the burglar alarms,” ​​Susie Buffett said.

While creating their own families and finding their own goals, the Buffett children grew up as philanthropists. Every year since 2006, Berkshire Hathaway’s longtime CEO has donated shares of the company to each of the three children’s foundations, giving them each more than two decades of philanthropic experience.

Susie Buffett lives in Omaha, Nebraska, and focuses on early childhood education and social justice through the Susan Thompson Buffett Foundation and the Sherwood Foundation. Howie Buffett, who lives in Illinois and heads the Howard G. Buffett Foundation, is spending more of his time and resources abroad on food security and conflict resolution. Peter Buffett, who lives in upstate New York and heads the NoVo Foundation, works on health and economic programs for women and children.

Warren Buffett didn’t give the siblings explicit instructions about the money, they say. His only guideline is that it should be used for the “less fortunate,” said Peter Buffett. In his 2024 Thanksgiving letter, Warren Buffett explained that he felt confident giving them so much money and so much discretion.

“I know the three well and trust them completely,” he wrote. “The period 2006-2024 gave me the opportunity to see all my children in action and they learned a lot about large-scale philanthropy and human behavior. They like to be financially comfortable, but are not concerned with wealth. Their mother, from whom they learned these values, would be very proud of them. As would I.”

Susie, Howie, and Peter will likely each focus on different goals, while also funding some joint efforts. The requirement that all payouts be unanimous is both a challenge and a blessing, they say, because siblings can blame each other when they don’t want to fund a good cause.

“It makes it very easy to say no,” Susie Buffett said. “It’s like, ‘I’m sorry, I’d love to do it, but my brothers would hate it. So call them.'”

As the Buffetts prepare for a historic giving campaign, here are five principles and strategies they say have underpinned effective use of capital and philanthropy:

Because the world is constantly changing, along with its needs, philanthropists must adapt quickly. The broad causes they support can change, as can the individual organizations and people they support.

Warren Buffett “has always said, ‘Here’s what I think matters now. I don’t know if that’s going to be true twenty years after I’m dead or ten years after I’m dead,'” Susie Buffett recalls.

Howie Buffett said that financing programs in Africa, for example, often requires collaboration with governments, which are also changing.

“We work in a lot of places where things can happen quickly, like eastern Congo or something like that. So you need flexibility,” he said.

Howie Buffett called philanthropy the “risk capital of the world” and said foundations need to make bigger bets – even if they fail.

“Sometimes things don’t work out the way you think,” Susie Buffett added. “Sometimes that’s a good thing. You learn from it.”

She added that being in Omaha, out of the spotlight, also allows for more experimentation.

“My staff has often said to me, ‘It’s refreshing to be in a place where we can screw up, we can make a mistake,’” Susie Buffett said, noting that her team rarely goes to conferences, where other nonprofit leaders are more reluctant to take risks and “afraid to go back and talk about things that might not work.”

However, not all failures are worth celebrating: “It’s not okay if you really messed up and did something you shouldn’t have done,” said Howie Buffett, “but if it failed for reasons that you knew could be a challenge, then it’s okay.”

Philanthropists can read all the reports and research on a topic, but nothing replaces seeing a problem or population in person.

“I have been to Africa 97 times and the 98th time I When you go to Africa, I learn something new,” Howie Buffett said. “Anytime you put yourself in a dynamic environment, you see things.”

His brother Peter has his own saying: “You don’t know if you don’t go.”

When Peter Buffett started his foundation, he said he felt he could “change the world.” He then visited Sierra Leone, Liberia and Bangladesh and said the scale of need was “overwhelming,” he said. “We slowly withdrew.”

One of his current projects is helping the community of Kingston, New York, near his home, where he can stay close to the fabric of daily life and learn which causes are most effective.

“I needed to be in a place where I could essentially be there every day,” he said.

Giving away more than $150 billion would require mega checks worth hundreds of millions or even billions of dollars. Normally, only governments and large institutions can process such large donations. But as Howie Buffett said, “I don’t trust them that much to make good judgments or they’ll have big overheads.”

Developing trust and responsibility is critical. Howie Buffett said his grant letters always include a clause that they can terminate the money at any time for any reason. He also includes a “no-cost extension” provision, which would require money left over from a budgeted project to be returned instead of being spent on other projects.

Over time, he said he has found nonprofits and groups they can rely on.

“We have five or six partners to whom we regularly give tens of millions of dollars a year,” he said. “And we have built that trust. You know how they work. They know what your expectations are.”

Trust also includes sharing negative outcomes: “I want every bit of bad news when there’s bad news,” said Susie Buffett. “You have to be very clear with people, like ‘I want to hear everything.'”

Just as Warren Buffett famously maintains a low-cost structure in his lifetime and at Berkshire, the Buffett family has learned to make the most of every dollar in their philanthropy.

Howie Buffett said his foundation’s “percentage of distributions,” or operating expenses versus cash distributed, is just 1.3%.

“That was just ingrained in us,” he said. “We know that’s what our father expects of us.”

The limited staff and small team also allow for quick decisions, similar to the culture at Berkshire.

“I’ve been in places where I’ve made a $50 million decision after a two-hour meeting,” Howie Buffett said. “It’s like, ‘We want to do this, we’re going to spend the money.'”

Acting quickly with bold choices goes against the grain of many foundations, which have to contend with layers of decision makers and bureaucracy.

“They have to have a board meeting, and then the trustees have to look at it and vote on it, and then everything is pulled out,” Susie Buffett said. “People are always surprised that we just do it.”