Warren Buffett resigned on Wednesday as trustee of the Bill and Melinda Gates Foundation, which says it will announce plans in July to answer questions raised about its leadership structure as it deals with the divorce of its two founders.
The announcement from Buffett comes weeks after Bill and Melinda Gates revealed that they were divorcing after 27 years of marriage but would continue to jointly run one of the largest charitable foundations in the world. Buffett was one of three members of the foundation’s board; the other two are Bill and Melinda Gates.
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“For years I have been a trustee – an inactive trustee at that – of only one recipient of my funds, the Bill and Melinda Gates Foundation (BMG). I am now resigning from that post, just as I have done at all corporate boards other than Berkshire’s,” Buffett said in a prepared statement Wednesday. “The CEO of BMG is Mark Suzman, an outstanding recent selection who has my full support. My goals are 100% in sync with those of the foundation, and my physical participation is in no way needed to achieve these goals.”
Buffett, the chairman and chief executive of Berkshire Hathaway, also said that he is halfway to reaching his goal of giving away the entirety of his shares in the conglomerate and that he’s donating another $4.1bn in shares to five foundations, though the lion’s share went to the Bill and Melinda Gates Foundation. In Buffett’s donation announced Wednesday, it received more than $3.2bn, bringing his total giving to the foundation to nearly $33bn, Suzman said in a statement.
“I know Warren’s departure raises questions about the foundation’s governance,” Suzman said, adding that he has been “actively discussing with him, Bill, and Melinda approaches to strengthen our governance to provide long-term stability and sustainability for the foundation’s governance and decision-making in light of the recent announcement of Bill and Melinda’s divorce. I plan to share additional information in July.”
The Bill and Melinda Gates Foundation has a trust endowment of about $50bn and around 1,600 employees, having funded work in 135 countries. There have been calls in philanthropy circles to diversify the foundation’s board, and critics have long pointed out that decision-making is concentrated in very few hands at the foundation, which they say has outsized influence in public health and other fields.
“Big foundations need strong oversight. The Gates Foundation has a lot of power, and to have so few people who are playing a governance role is just problematic,” said David Callahan, the founder of the Inside Philanthropy website and author of The Givers: Wealth, Power, and Philanthropy in a New Gilded Age.
Now that Buffett is stepping down, Melissa Berman, the president & CEO of Rockefeller Philanthropy Advisors, notes it gives the foundation an opportunity to think about its governance for the long run.
“Organisations are looking to bring a more diverse range of expertise and experiences into their governance,” Berman said. “A larger board would help position the Gates Foundation for deeper impact in global health, economic opportunity and education.”
Bill and Melinda Gates said in separate statements Wednesday that they were grateful for Buffett’s leadership, generosity and friendship. “His wisdom has been a guiding light through our foundation’s second decade, and the things we’ve learned from him will continue to help us chart a way forward,” said Melinda Gates.
Buffett had faced criticism after ProPublica reported earlier this month that some of the country’s wealthiest people have paid no income tax, or nearly none, in some years. Using perfectly legal tax strategies, the report said Buffett paid less than 10 cents for every $100 he added to his wealth from 2014 to 2018.
He said Wednesday that he currently holds about $100bn in shares of Berkshire Hathaway and that the $41bn he has previously donated in shares has saved him only $0.40 in taxes per $1,000 given. “That’s because I have relatively little income,” he said. “My wealth remains almost entirely deployed in tax-paying businesses that I own through my Berkshire stockholdings, and Berkshire regularly reinvests earnings to further grow its output, employment and earnings.”
Buffet did not address growing questions raised about the structure of the Gates Foundation’s leadership after reports of Bill Gates’s behaviour in the workplace. It was recently revealed that board members at Microsoft Corp made a decision in 2020 that it wasn’t appropriate for Gates, the company’s co-founder, to sit on its board as they investigated the billionaire’s prior romantic relationship with a female Microsoft employee that was deemed inappropriate.
The Bill and Melinda Gates Foundation has said that it is not investigating the allegations in the media, as the reported incident involving one of the world’s largest, most influential non-profits was made by “an anonymous former employee”.
Buffett, now 90, has in recent years resigned from all other corporate boards outside of Berkshire Hathaway, but he has said he has no plans to step down from his role as CEO of Berkshire. Earlier this year, Berkshire identified the executive who will one day take over as the company’s CEO when Buffett is gone, but he isn’t retiring.
Buffett said Wednesday that while he still loves his job, “I’m clearly playing in a game that, for me, has moved past the fourth quarter and into overtime.”