Warren Buffett is a generous soul. The legendary investor has made it clear his intention is to die penniless as a result of a well- orchestrated plan to distribute his more than $50 billion to organizations and charities he supports.
In documents filed with the Securities and Exchange Commission, it was reported Buffett distributed $21.6 million to four unnamed charities and three individuals in the second half of 2012.
These gifts are in addition to regular contributions he makes to the Bill and Melinda Gates Foundation, which will ultimately be the recipient of about two-thirds of the Buffett fortune.
However, these recent donations are small potatoes compared to the money he has gifted recently to his children’s various foundations.
Each of Buffett’s three children was given an early infusion of funds in 2006 – a total of around $3 billion – to expand the charitable work they do.
“I am enormously proud of the way in which you have managed the resources of the foundation that Mom and I established for you," Buffett wrote in letter to each of his children. "Your thinking has been good, and your actions have been effective in helping those less fortunate than our family has been.”
But also included in the letter what he called “a couple of thoughts, but not directives.”
“Concentrate your resources on needs that would not be met without your efforts," Buffett wrote. "Conversely, avoid making small contributions to the multitude of worthwhile activities that have many possible funders and would likely proceed without your help. Pay attention to your home community but favor a broader view. Expect to make some mistakes, nothing important will be accomplished if you make only ‘safe’ decisions.”
It is clear Buffett is preparing for the end of life, even though it may still be years away.
When he turned 82 last September he sent another letter to each kid, saying, “You have exceeded my high expectations. I’ve decided, therefore, to double the original pledge.”
Each foundation run by the Buffett clan will now receive annual distributions to average more than $100 million.
In addition, Buffett has been aggressively encouraging his fellow billionaires to sign what is called “The Giving Pledge.”
The idea, spawned by Buffett and Bill Gates in 2010, is to invite the wealthiest individuals and families in America to commit at least half of their wealth to causes and charities of their choice.
To date, 92 families -- including the family of Irwin and Joan Jacobs, founder of Qualcomm (Nasdaq: QCOMM) -- have signed the pledge.
Obviously, worldwide organizations and millions of people will benefit from the generosity of these people.
Programs to provide education, safe food and water, and other necessities will change the quality of life for many generations to come.
But, of course, there is an underlying benefit that comes from making these substantial gifts.
Buffett made it clear in his letters to his children stating his lifetime pledge to fund their foundations comes with two conditions.
“The first is that you remain alive and active in the foundation’s activities. The second is that you must continue to satisfy legal requirements qualifying my gifts as charitable and not subject to gift or other taxes,” Buffett wrote.
In other words, he may not be able to beat Father Time, but he plans to clearly avoid the tax man before and after he is gone.