Buffett Donates $6 Billion in Berkshire Stock to 5 Charities in Annual Gift

Warren Buffett is donating $6 billion in Berkshire Hathaway stock to charity. (Johanness Eisele/ AFP via Getty Images)

Warren Buffett is making his annual donation of Berkshire Hathaway stock to five philanthropies, giving $6 billion in shares to the organizations with the bulk going to the Gates Foundation, according to a press release early Friday evening.

Buffett will convert 8,239 Class A shares into about 13.4 million Class B shares and deliver the stock to them on Monday. The Berkshire CEO will own 198,117 Class A shares worth about $145 billion after the donations are made.

The Gates Foundation, chaired by Bill Gates, will receive the bulk of the donations—roughly $4.6 billion in Berkshire stock—and four Buffett family foundations will receive the rest based on a formula that Buffett devised when he began giving stock to the five foundations in 2006. The five each receive annual donations with the amount of stock cut by 5% each year.

The four Buffett foundations are the Susan Thompson Buffett Foundation ($460 million in gifts), which is named for Buffett’s late wife. The other three foundations, each run by Buffett’s three children, will get about $320 million each. They are the Sherwood Foundation (Susan Buffett), Howard G. Buffett Foundation (Howard Buffett) and NoVo Foundation (Peter Buffett).

The Susan Thompson Buffett foundation has made sizable donations to reproductive rights organizations. The Sherwood foundation is focused on Nebraska giving, the Howard Buffett foundation on Ukraine, and the NoVo Foundation on the Kingston, NY area.

Buffett, 94, wants his annual gifts to be spent and not banked by the foundations. His donation, for instance, represents about half the annual spending of the Gates foundation, which gave away $8 billion last year. The Gates foundation sells about 2.5 million Berkshire Class B shares each quarter to support its giving efforts.

Buffett’s gifts to the Gates foundation are set to end upon his death. At that point, his three children will be responsible for giving away his fortune over a period of 10 years or more.

Buffett made these comments in conjunction with the gifts:

“When originally made (in 2006), I owned 474,998 Berkshire A shares worth about $43 billion and those shares represented more than 98% of my net worth. I have converted A shares into B shares before making contributions.” That Buffett stake would now be worth about $345 billion at the current share price. Berkshire’s A shares ended Friday at $730,940, up 0.2% and the B shares at $485.68, up 0.1%

Buffett added: “During the following 19 years, I have neither bought nor sold any A or B shares nor do I intend to do so. The five foundations have received Berkshire B shares that had a value when received of about $60 billion, substantially more than my entire net worth in 2006. I have no debts and my remaining A shares are worth about $145 billion, well over 99% of my net worth.

“Nothing extraordinary has occurred at Berkshire; a very long runway, simple and generally sound decisions, the American tailwind and compounding effects produced my current wealth. My will provides that about 99½% of my estate is destined for philanthropic usage.”

Write to Andrew Bary at andrew.bary@barrons.com