2003: Why do Buffett and Munger donate money?

WARREN BUFFETT: The question about philanthropy. Charlie, you want to swing at that one first?

CHARLIE MUNGER: I think it’s fair to say that both of us feel that the very fortunate owe a duty to the general civilization, and even to the country of which he’s a member.

Whether you give as you go along or have the Buffett system of moderate giving as you go along and immense giving in due course, I regard as a matter of personal taste.

I would understand the second position in that I would hate to spend all my time every day having people ask me for money. And I don’t think Warren could stand it. Is that right, Warren?

WARREN BUFFETT: Let’s not even try. Let’s not even try, Charlie. (Laughter)

No, we — I mean, it’s a matter of record, and it hasn’t changed for, I don’t know, 25 years, probably, but basically everything I have at the date of the later of the death of myself or my wife, goes to charity.

I mean 99 and a significant fraction. And since my children are here, I’m not going to carry it out to 8 decimal places. But — (laughter) — you know, why not? It —

Think of it this way. Here’s — let’s just assume that, instead of being born as I was in a single birth, that I were in the womb and there was an identical twin next to me. Same DNA. Same everything. Personality. Propensity to work. Propensity to say — whatever. Identical twin. Wasn’t Charlie. Might look like him, but — (Laughter)

And there we are, the two of us. And a genie appeared. And the genie said, “I’ve got a proposition for the two of you. You’re going to be born in 24 hours. Same talents. Everything identical. And one of you is going to be born in Omaha, and one of you is going to be born in Bangladesh.

“And I’m going to let you two decide which one gets to be born in Bangladesh and which one gets to be born in Omaha. And I’ve got this system. And I’m going to — the way I’m going to work it is that we start the bidding, and whichever one of you bids the highest proportion of your estate to go to society when you die, gets to go — be born in the United States.” I think you’d bet a hundred percent, you know.

You hear all of this about, you know, grit and pluck and all of these things, and how, you know, you have applied yourself working all your life, and you’ve done all these wonderful things.

Well, just imagine if I’d been born in Bangladesh. You know, and I’d walked down Main Street and said, you know, “I allocate capital.” You know? “Let me show my stuff.” (Laughter)

I’d have died of malnutrition. I mean, it would — I wouldn’t have made it through the first few months.

The society that Charlie and I work in, I mean we were luckier than hell. I mean when we were born, the odds were 50-to-1 against us being born in the United States. So we hit the jackpot.

And basically, it — you know, we’ve had all of the fun of working with this and working with good people. And money, obviously, opens lots of doors in life to interesting things.

And it goes back to society. Like Charlie says, it can go back on the installment system through life. It can go back in a lump sum at death.

I’ve mixed the two to some extent, but I weight heavily the lump sum.

But, you know, that’s where it belongs. I mean, it — there’s no reason why little — generations of little Buffetts, now and the next one, you know, and a hundred years from now, should all be commanding the resources of society just because they came out of the right womb. You know, what sort of justice is that?

So basically, it’s going back to society. (Applause)

Were my children applauding there? Did we check that out? (Laughter)