Buffett leaves Gates Foundation out of annual Berkshire stock gifts

Warren Buffett will donate 12 million Berkshire Hathaway Class B shares to four foundations tied to his family, Berkshire Hathaway said, leaving the Gates Foundation out of his annual charitable stock transfers. The allocation redirects this year’s gifts entirely to organizations connected to Buffett’s late wife and children, a notable shift for one of the largest private philanthropic programs in the United States.

Berkshire said the 95-year-old chairman will give 9 million Class B shares to the Susan Thompson Buffett Foundation. He will also donate 1 million shares each to the Sherwood Foundation, the Howard G. Buffett Foundation and the Novo Foundation.

The Gates Foundation, founded by Bill Gates and Melinda French Gates, was not included. For years it had been the largest beneficiary of Buffett’s annual Berkshire donations. Since 2006, Buffett has given more than $47 billion of Berkshire stock to the organization, according to CNBC.

Succession timetable

Buffett said in a statement announcing the gifts that he intends to dispose of his remaining Berkshire shares within roughly eight years. “My goal is to dispose of all of my Berkshire shares within about eight years,” he said. “As I explained last year, my children are unfortunately growing older. I have every hope that the three of them are able to carry out the disposal of my shares by December 31, 2034.”

The gifts are made in Berkshire Class B shares, the company’s lower-priced share class. Stock donations allow Buffett to transfer ownership of Berkshire equity directly to charitable entities, rather than first selling shares and donating cash. The foundations then hold the donated securities as part of their assets, subject to their own governance and grant-making processes.

The decision also changes the pattern set out in a 2006 letter to Bill and Melinda Gates. In that letter, Buffett wrote that he was “irrevocably committing” to annual gifts of Berkshire shares to their foundation during his lifetime, so long as at least one of them remained active in the organization.

Epstein review reported

The Wall Street Journal reported that Buffett had delayed his usual gift to the Gates Foundation while waiting for the result of a review into the foundation’s ties to Jeffrey Epstein, the late sex offender. CNBC reported that, in a March interview with Becky Quick, Buffett said he had not spoken with Bill Gates “at all since the whole thing was unveiled.”

Asked in that interview whether he and Gates remained close friends, Buffett said they had shared “great times together,” but added: “Until it gets cleared up ... I just don’t think it makes sense to do a lot of talking.”

Buffett is expected to discuss the annual donations on CNBC’s “Squawk Box” on Wednesday, according to CNBC. Berkshire’s announcement did not include a Gates Foundation allocation for this year’s stock gifts.

This story draws on original reporting from CNBC.