Tuesday, June 29, 2010

Mussar Buffet

There is so much inspirational and humbling mussar in here...

"My Philanthropic Pledge"

By Warren Buffett

June 16, 2010

In 2006, I made a commitment to gradually give all of my Berkshire Hathaway stock to philanthropic foundations. I couldn't be happier with that decision.

Now, Bill and Melinda Gates and I are asking hundreds of rich Americans to pledge at least 50% of their wealth to charity. So I think it is fitting that I reiterate my intentions and explain the thinking that lies behind them.

First, my pledge: More than 99% of my wealth will go to philanthropy during my lifetime or at death. Measured by dollars, this commitment is large. In a comparative sense, though, many individuals give more to others every day.

Millions of people who regularly contribute to churches, schools, and other organizations thereby relinquish the use of funds that would otherwise benefit their own families. The dollars these people drop into a collection plate or give to United Way mean forgone movies, dinners out, or other personal pleasures. In contrast, my family and I will give up nothing we need or want by fulfilling this 99% pledge.

Moreover, this pledge does not leave me contributing the most precious asset, which is time. Many people, including -- I'm proud to say -- my three children, give extensively of their own time and talents to help others. Gifts of this kind often prove far more valuable than money. A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check. My sister, Doris, extends significant person-to-person help daily. I've done little of this.

What I can do, however, is to take a pile of Berkshire Hathaway stock certificates -- "claim checks" that when converted to cash can command far-ranging resources -- and commit them to benefit others who, through the luck of the draw, have received the short straws in life. To date about 20% of my shares have been distributed (including shares given by my late wife, Susan Buffett). I will continue to annually distribute about 4% of the shares I retain. At the latest, the proceeds from all of my Berkshire shares will be expended for philanthropic purposes by 10 years after my estate is settled. Nothing will go to endowments; I want the money spent on current needs.

This pledge will leave my lifestyle untouched and that of my children as well. They have already received significant sums for their personal use and will receive more in the future. They live comfortable and productive lives. And I will continue to live in a manner that gives me everything that I could possibly want in life.

Some material things make my life more enjoyable; many, however, would not. I like having an expensive private plane, but owning a half-dozen homes would be a burden. Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.

My wealth has come from a combination of living in America, some lucky genes, and compound interest. Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the U.S. were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.)

My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate's distribution of long straws is wildly capricious.

The reaction of my family and me to our extraordinary good fortune is not guilt, but rather gratitude. Were we to use more than 1% of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs. My pledge starts us down that course.


  1. What a beautiful statement. In a time when we see so much greed and corruption, this, at least, is uplifting. Thanks for making me aware of it.

  2. We should also note that Warren Buffet has no interest in institutions, buildings, or plaques dedicated in his honor. Contrary to some claims that gentiles only give charity for their own self-aggrandizement.

  3. Zach,

    Regarding the reasons gentiles give to charity-perhaps the Talmud is describing a general tendency.

    There is also the possibility that even someone such as Mr. Buffett who sounds like a fine person does not operate out of the same lofty idealism, of a more spiritual nature which tends to characterize Jews.

  4. HaRazieli, what is your basis for saying that charity by Jews tends to be motivated by a lofty idealism of a spiritual nature more so than with charity of non-Jews?

  5. What does this have to do with Rationalist Judaism?

  6. Charitable giving seems to work best when it's on a small scale. Billion dollar transfers, no matter how nobly intended, are an invitation to corruption, mismanagement, and poor planning. They're likely to be used on some activist's pet cause. In other words, they may wind up being used for more harm than good.

    By way of example, the billions, (if not trillions) transferred to Africa have done little but to keep the continent impoverished and fund the Swiss bank accounts of its corrupt-o-crats.

    I'm not saying that what Mr. Buffet is doing is wrong. I'm just saying that there is a significant chance that it will not work out as he intended.

    If you want to read a good discussion of why using broad brush techniques to mess with complicated systems is doomed to failure see "The Logic of Failure" by Dietrich Doerner.

    That said, I wish Mr. Buffet the best of luck. May his generosity be only a benefit to those he intends to help.

  7. My not-so-rationalist rebbes in yeshiva would claim that Buffet must have some jewish genes.

  8. Ari:

    Not to derail this into a complete tangent, but I think it's more fair to say that charitable organizations need to have realistic goals. There certainly have been large-scale charitable successes (smallpox eradication, possibly the Marshall Plan), but they were primarily focused on solving large-scale technical problems, not reforming social mindsets.

    I think it's also indicative of Mr. Buffett's anivut that (as I understand it) he is working with the Gates foundation, rather than starting up his own charity, thereby avoiding duplication of management effort.

    I am personally the beneficiary of a <a href="http://en.wikipedia.org/wiki/Peter_Cooper> remarkable 19th century American philanthropist</a>, so I hope that this sense of social responsibility amongst the extremely wealthy in our society continues.

  9. The sentiment is nice, but a big problem is that most of the donations of Bill Gates and others of his ilk go to "modernize" the "developing" world and speed up the destruction of native cultures and nature, which is of course how they made their fortunes in the first place! Now they want to show us the "happy face" of industrialism. We would all be a lot better off without them and their donations.

  10. Ari,
    Ever wonder what percentage of our donations to yeshivos and kollels actually get there? How much of it ends up in the hands of fundraisers and bureaucracy?

  11. Buffet had some great things to say about Israel in this video:

  12. Koilel Nick,

    If you want to read a really pessimistic evaluation of the success of large scale charity, check out "We Are Doomed" by John Derbyshire.

  13. Stickler said...
    What does this have to do with Rationalist Judaism?

    Just look at the comments from HaRazieli, David T., and Don!

  14. I have no problem with the idea that there is an inherent difference between Jewish and non-Jewish souls. (Though by this I am not implying that non-Jews can not be super righteous and also have great souls.)

  15. Buffett's mother's maiden name was Leila Stahl.

    Aha! Proof!

    Proof that I know how to Google.

  16. Interesting to note that at face value this may not a Jewish way to give. Ha'yevazvez al yevazvez yoser m'chomesh- one should not give more than a fifth of his money to charity. The Chofetz Chaim apparently writes that for an extremely wealthy person like Buffet it would be OK, but I'm not sure everyone agrees.

  17. I have no problem with the idea that there is an inherent difference between Jewish and non-Jewish souls.

    You may have no problem with it, but what is the rational basis to believe that such a thing is actually true?

  18. Uh, David T... What is the rational basis to believe that the soul exists at all?

  19. The spiritual category Yisrael is not identical to the Halachic cagegory Jew.

  20. Believing in G-d isn't necessarily "rational" either, but it is supremely reasonable to believe-and given the behavior of the Jewish nation-many of us have an "irrational" attraction to performing hessed and idealistic activities (even if sometimes the wrong type of idealism).Further, it does seem to be written all over the place in Talmudic and non-Talmudic sources that we are a very special nation...Need I say more? Scientifically verifiable that we have special type of souls-of course not. Reasonable-yes indeed.

    Just as it is unscientific and yet reasonable to state that anti-Semitism has been an essential part of the gentile character, or that G-d exists-same with the issue of Jewish souls versus non-Jewish souls.

  21. My formative education was in Lubavitch. And as much as I loved some of their attitudes, i turned from them. Among the reasons were ideas such that Jews and non-jews have different souls.

    I am always amazed how jews turn to the Torah for sources of “truth” when its convenient for them and ignore it otherwise.

    Isn’t the story of Hashem creating mankind by only creating one “first couple” a powerful lesson than all mankind is to be treated equally. Pray someone tell me where in the Torah did the first “special Jewish” soul come into existence. Did Avrohom have one, did Yitzkhok, did Moishe???? Was their a massive “soul conversion” at Har Sinai??

    I am aware that rabbinic Judaism has laws that treat non-jews differently (and less fairly) but that has a lot more to do with fighting idolatry and what’s more almost all of that has been abrogated by halakha over the years.

  22. "Too often, a vast collection of possessions ends up possessing its owner."

    Sounds a bit like “mah sh-kana eved kanah rabbo."

  23. This comment has been removed by the author.

  24. משה רפאל said...
    The spiritual category Yisrael is not identical to the Halachic category Jew.
    (July 2, 2010 10:18 AM)

    What do you mean? Where and when is there a difference?

  25. At this link, Buffett reveals his secret to success:


    Unconditional love.

  26. "Just as it is unscientific and yet reasonable to state that anti-Semitism has been an essential part of the gentile character, or that G-d exists-same with the issue of Jewish souls versus non-Jewish souls." --- Ha Razieli 7-2-2010

    Is that like saying it's unscientific and yet reasonable to state that greed has been an essential part of the Jewish character...? Boy! the chosen race theory racism abounds on this thread.

    BTW no one here mentions that "charitable" giving is a great way to keep your family's fortune "in the family" and free of taxation. Not so philanthropic after all is it...

  27. The most precious asset is time, indeed this is a wisely thinking from a wealthy man. The same thinking of a wealthy man is to 'give back' by being a philanthropist.

    Best regards,



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