Every Tuesday on VF.com, filmmaker Jamie Johnson offers a glimpse into the secret lives of the super-rich.
When journalists write about the family of Warren Buffett, one of the world�s richest men, they almost always discuss his unconventional decision not to pass the bulk of his fortune on to his children and grandchildren. In 2006, the iconic investor announced plans to leave the greatest portion of his fortune�a sum estimated in the tens of billions�to The Bill and Melinda Gates Foundation. This widely publicized gift, along with numerous reports that have emerged over the years detailing Warren�s outspoken views on limiting inheritance, have established him as a model of dynastic restraint. People value his philanthropic initiative and perceive his wealth-transference policy as a great equalizer, or at least an initial step towards leveling the social and economic playing field.
And it�s hard to argue against Warren�s choices for redistributing the fortune he built through entrepreneurial ingenuity and hard work over time. But it would be a mistake to think that the Buffett children haven�t received any ancestral wealth and power from their pragmatic father. The public often overlooks the $1 billion gift Warren made to each of his three kids for use in charitable foundations. Most recently a profile of Warren�s son, Howard Buffett, in Saturday�s edition of The New York Times reinforced the familiar theme of Buffett-family modesty. While the article does acknowledge Warren�s sizeable contribution to his children�s philanthropic endeavors, it also leaves the reader feeling somehow that nothing grand has been handed down from the patriarch to his offspring.
Nonetheless, a billion dollars, even when held by a charitable foundation and managed in accordance with laws governing such foundations, is an extremely powerful tool. Any private foundation holding $1 billion worth of securities, for example, is required by law every year to give away a minimum of five percent of that total sum, which comes out to $50 million. Anyone who makes annual donations of that size is guaranteed to wield immense influence. And it should also be noted that there is nothing preventing the trustees, or governors, of any foundation from making contributions to not-for-profit projects of their own creation. An art lover could start an art institute, a nature lover could build a wildlife sanctuary�the possibilities for personal gratification through foundation work are abundant.
Affluent people who run private foundations get to direct funds toward causes that are interesting and meaningful to them. These foundations give away billions of dollars and play a critical role in society. To undermine their significance would be foolish. But it would be equally irresponsible to suggest that those at the helm do not possess entrenched power.
Personally, I believe that much of the publicized work done by the Buffett charities is important and substantial. What I do not believe, despite the well-accepted media narrative, is that Warren Buffett has in any way pushed his children to the margins of society.
(On an incidental note, I interviewed Warren Buffett�s granddaughter, Nicole Buffett, for a documentary film I made in 2008. The film reveals that Warren, in fact, gives his granddaughter no personal funds or money for charitable giving. However, this is largely a separate issue, and bears no relation to this post.)
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