2007: What's Buffett's advice for donating money to philanthropy?
AUDIENCE MEMBER: Hello, Mr. Buffett. Eben Pagan, Santa Monica, California.
You seem amazing at keeping your composure in tough situations. I would be very interested to know what your thought process was when you were in that incredibly stressful situation, you knew the world was watching, and you went head-to-head with LeBron James. (Laughter)
WARREN BUFFETT: The game was rigged. (Laughter)
He was the one that had a problem. (Laughs)
AUDIENCE MEMBER: What I’d really like to know is, I’m a real big fan of you and Mr. Gates and your philosophy of channeling all the value you’ve created back into the world.
And I have a successful business, and I’d like to do the same, but maybe in 20 or 30 or 40 years, and with a time horizon like that, I’d love to know what advice you’d give someone like me.
WARREN BUFFETT: Well, there’s nothing wrong with your time horizon, in my view, as long as you’re going — as long as you plan to give it back, I mean, A) the decision is yours entirely, anyway, whether you want to do it.
But assuming you want to give it back, or give it to society in some way, if you’re compounding your money at a rate greater than people generally do, you are, in effect, an endowment fund for society.
And, you know, all kinds of organizations in the nonprofit area have endowment funds, and they think it’s wise to have it, and they do that in order to get standard returns, usually.
And if you can compound it more and you’re going to give it back later on, let someone else take care of current giving, and you can take care of giving in 20 or 30 years. But, you know, I regard that as a personal decision.
I always felt that I would compound money at a rate higher than average, and it would have been foolish to give away a significant portion of my capital to somebody who would spend it within, you know, months, when there could be a really much larger amount later on.
And, on the other hand, the time had come, I’d really thought my wife would be doing that, and when that didn’t work out, the time had come to do something with it.
And, fortunately, I had some great options available, and I get to keep on doing what I love doing and I let some — I farm out all the work.
But, you know, when my wife had a baby, we hired an obstetrician. I didn’t try and do it myself. I mean, when a tooth hurts, you know, I don’t have Charlie fix it. I go to a dentist.
So when I have money to give away, I believe in turning it over to people who are — and I’ve got five different organizations, including my three kids — and I believe in turning it over to people who are energized, working hard at it, smart, you know, doing it with their own money, the whole thing.
And I get to keep doing what I like doing. So as far as I’m concerned, I haven’t given away a penny.
Charlie?
CHARLIE MUNGER: Well, I think it’s wonderful for the shareholders that somebody else is giving away the money. (Laughter)
I tell you, if all Warren wanted to talk about was interfacing with applicants for donations, we would have a different life. And we wouldn’t be very well adapted to it, either.
WARREN BUFFETT: Yeah. You know, actually on the smaller ones I send them all to my sister Doris, and she does a great job with it, and enjoys it, spends lots of time on it, good at it, and I’m glad she does it and I don’t.
You know, the truth is, I haven’t given away anything in a practical matter. I have everything in life I want. You know, there’s no way I can sleep better, I can eat better. Other people might think I could eat better. (Laughter)
I haven’t given up anything.
Now, if you think about it, you know, somebody that gives up having an evening out, somebody that, you know, gives up their time working on something, somebody that doesn’t take their kids to Disneyland this year because they’ve, you know, they’ve given the money instead to their church, I mean, those people are changing their lives in some way with what they give.
I haven’t changed my life at all. I don’t want to change my life. I’m having a lot of fun doing what I do. And, you know, it’s just a bunch of stock certificates that one way or another they’re going to go someplace.
And what I really want to do is keep doing what I enjoy doing, and feel that the claim checks that I accumulate that comes about for this, are going to get used effectively for the same general purposes that I would want to use them for if I really had the energy and the interest in doing the job myself.
But somebody else can keep doing the work.