Buffett steps down from Gates, adding to questions about its future

Billionaire philanthropist Warren Buffett said Wednesday that he is stepping down as a trustee for the Bill & Melinda Gates Foundation, while pledging to continue to support the organization’s goals.

Buffett’s departure, which comes a little over a month after Bill Gates and Melinda French Gates announced that they are divorcing, raises further questions about how the foundation will operate going forward. Gates Foundation CEO Mark Suzman said governance questions will be answered next month.

Buffett, chairman and CEO at Berkshire Hathaway, said in a statement that he is resigning from his position as trustee, in which he has served since pledging much of his fortune to the Gates Foundation in 2006.

“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,” he wrote. “I am now resigning from that post, just as I have done at all corporate boards other than Berkshire’s.”

He broke the news as part of an announcement about his annual donations. He is giving $4.1 billion to five foundations, including a $3.2 billion gift to the Gates Foundation. The 90-year-old Buffett hinted that age may have factored into his decision, saying, “I’m clearly playing in a game that, for me, has moved past the fourth quarter into overtime.”

But he also said that Suzman has his “full support” and that his goals are “100% in sync” with those of the foundation. But he added that “my physical participation is in no way needed to achieve these goals.”

In a separate statement, Suzman said, “I know Warren’s departure raises questions about the foundation’s governance.” Suzman said he has been actively discussing such issues with Gates and French Gates in light of their divorce and intends to share more information in July.

With Buffett gone, Gates and French Gates are the only two remaining trustees for the foundation, which does not currently have a board. As Devex previously reported, the Bill & Melinda Gates Foundation is considering leadership changes that could include bringing on a board and outside directors. Some philanthropy experts are pushing for the foundation to prioritize transparency and diversity among its leadership.

Aside from governance, one of the looming questions is whether Buffett’s departure will affect his future giving to the Gates Foundation and his pledge to direct much of his fortune to the organization by the time of his death under the condition that it be spent within 10 years.

A spokesperson for Buffett did not immediately respond to a request for further details about money not yet transferred to the foundation. However, Buffett said in a 2006 letter that he was “irrevocably committing to make annual gifts” to the foundation during his lifetime.

Both Gates and French Gates released statements in response to Buffett’s announcement. French Gates called him a “guiding light” who would continue to help the foundation chart a path forward. And Gates said Buffett would “continue to inspire our foundation as we work to fight poverty and help millions of people live healthier lives.”

Buffett, who puts his worth at about $100 billion, has pledged to give 99% of his worth to philanthropy. He is currently at the midway point.

Yet Buffett also is among the U.S. billionaires who have faced greater scrutiny as they’ve amassed greater wealth over the past decade — and during the COVID-19 pandemic — while paying little in federal income taxes. Some also have come under fire for tucking away charitable donations in accounts that grant them immediate tax breaks while letting the money sit there indefinitely. Legislation that would impose deadlines to distribute these funds was recently introduced in the U.S. Senate.

Buffett acknowledged those criticisms in his statement Wednesday and said it was fitting for Congress to periodically revisit the tax policy for charitable giving. Still, he also noted that he had chosen to hold out on the bulk of his charitable giving until later in life after his wealth had compounded.

He said that he had accumulated “an almost incomprehensible sum simply by doing what I love to do” and that giving away money that would never be of real use to him or his family is “the easiest deed in the world.”

“Society has a use for my money; I don’t,” he wrote in the statement.

Update, June 23, 2021: This story has been updated with details from a 2006 letter in which Warren Buffett “irrevocably” committed to make annual gifts to the Gates Foundation.