Warren Buffett is a remarkable man by any financial calculation. As the chairman and CEO of Berkshire Hathaway, his investment strategies have created millionaires, have poured money into retirement plans that followed his advice, and have amassed a fortune in excess of $40 billion dollars in his own portfolio.
In itself, this is a remarkable accomplishment. Mr. Buffett has demonstrated an incredible knowledge of where to invest and when. This is true talent.
What does one man do with this much money?
It is one thing to create wealth by using our gifts. This is a matter of knowledge. It is quite a different thing to know what to do with the wealth that has been created. That is where wisdom comes into the picture.
In Mr. Buffett's recent gift of $31 billion of his company's stock to the Bill and Melinda Gates Foundation, Mr. Buffett has demonstrated not only knowledge but also wisdom. Wisdom is less easily grasped but just as important. Showing remarkable humility, Mr. Buffett openly admits there is something he knows very little about: effective and compassionate philanthropy. He knows what he doesn't know, and this makes him wise.
Few people who have been enormously successful in the arena of business are readily able to admit their shortcomings in the area of giving. But Mr. Buffett recognizes that good philanthropy is an act of both the heart, which feeds the impulse to give and the mind, which directs the giving.
The responsibility of putting $31 billion to good use now falls to the Bill and Melinda Gates Foundation. This is more difficult than most of us probably realize. The stewardship responsibility of putting this gift to work has been transferred from Mr. Buffett to those who administer the Gates Foundation and this responsibility has too often been ignored in large foundations.
Mr. and Mrs. Gates know what they want. The goal of their foundation is to identify and eradicate preventable illness, especially in developing world countries. No one can doubt the sincerity or simplicity of that mission. But it is more difficult than it might first appear.
Consider the work of the U.S. government in addressing malaria in Africa, which takes the lives of 800,000 children every year. According to the New York Times, “the United States' main aid agency admitted to outraged senators last year that it spent more on high-priced consultants than life-saving commodities.” In the U.S. fight against malaria in poor countries in 2004, “only 1 percent of the agency's budget went for medicines, 1 percent for insecticides, and 6 percent for mosquito nets.”
It is clear that government agencies easily become bloated bureaucracies more focused on studies and salaries than they are on actually solving problems. Somewhere, this agency lost its mission and purpose for existence. At the end of the day, how many human lives were saved?
Of course, this tendency is not limited to government agencies. Mission creep occurs in especially large foundations, too. Those who spend some of their time with the leadership of large foundations know of the stories of $500 bottles of wine, ornate offices, expensive junkets, and wasted money. Those who funded some of these foundations would roll in their graves if they knew how their money was being spent.
But waste is not the only danger. Many foundations, originally set up with good intentions, drift away from the purpose those funding them had in mind when they were begun. Strangely, the drift almost always is to the Left of the political and economic spectrum. Foundations originally funded by those who built automobiles protest the internal combustion engine and those who build them today, in some cases with the foundation sharing the company name.
Mr. and Mrs. Gates face multiple challenges in dispersing their wealth and that of Mr. Buffett. It is hoped that they are wise and knowledgeable. That they pick a mission and stick to it. That they listen to the voices of those they are trying to help and enter a relationship with them rather than simply becoming another source of funding corruption in poor countries. That they consider all possible solutions to the problems they seek to address, not simply those that are politically correct.
Good charity is more than handing out money. It restores but does not overwhelm. It builds but does not dominate. It treats recipients as equals in dignity and honor. It takes seriously the image of God in the faces of those it seeks to help. It is driven to increase independence and does not foster ongoing dependency.
Mr. Buffett has done something remarkable. Let's hope and pray that Mr. and Mrs. Gates can, too.
