Buffett, Gates unite on $60 billion foundation

NEW YORK, June 27: Warren Buffett signed over much of his 44 billion dollars fortune to the Bill&Melinda Gates Foundation, uniting the world's two richest people in a bid to fight disease, reduce poverty and improve education.

The roughly 30.7 billion dollars donation doubles the Gates Foundation's size to 60 billion dollars, five times larger than any other US charitable group and larger than the gross domestic product of Kuwait.

Bill Gates, the world's richest man, co-founded and remains chairman of giant software company Microsoft Corp.. His friend Buffett, 75 and the world's second-richest man, built his fortune running Berkshire Hathaway Inc., an insurance and investment company.

''I am not an enthusiast for dynastic wealth, particularly when the alternative is 6 billion people having much poorer hands in life than we have,'' Buffett said at a signing ceremony with the Gateses at the New York Public Library's main branch.

Gates, 50, this month said he plans in July 2008 to step down from his day-to-day Microsoft role to focus on his foundation, one of the goals of which is to improve access to technology in US public libraries.

Buffett pledged 10 million Berkshire Class B shares to the Gates Foundation. He also pledged 2.05 million Class B shares to foundations in the name of his late wife, Susan, who died in 2004, and for his three children, Susie, Howard and Peter.

The total donations of about 37.1 billion dollars amount to roughly 85 per cent of Buffett's net worth, and constitute the largest single act of U.S. charitable giving ever.

Buffett made the donations fewer than four months after he said Berkshire's board had identified a successor for him.

Gifts to the Gates Foundation will be made in stages, and are conditioned on money being distributed the year it is donated.

The foundation gave away 1.36 billion dollars in 2005, so Buffett's first gift of 1.5 billion dollars, in July, may double its spending.

''This is his life's work,'' Gates said at the ceremony. ''Now that the money is going to be as much Warren's as the money my job helped generate, it's almost scary.'' He prompted laughter when he added: ''If I make a mistake with my money, it doesn't feel the same.'' Time magazine last year named the Gateses and Irish singer Bono of the band U2 its ''Persons of the Year'' for 2005, citing their charitable and philanthropic pursuits.

''I've watched Bill and Melinda Gates for a number of years,'' Buffett said. ''It was clear that an outstanding mind with the right goals was focusing intensely with passion (and) heart on improving the lot of mankind.''

HIGHER VALUE?

Both Buffett and Gates emphasized the importance of keeping philanthropy separate from Berkshire's day-to-day operations.

Buffett's donations of Berkshire shares means the ultimate value of his gifts will be tied to the company's share price.

''I would be surprised, disappointed, if we can't manage Berkshire well enough so the increase on value, on average, (isn't) more than 5 percent a year.'' Buffett said.

Berkshire owns large stakes in such blue-chip companies as American Express Co. and Coca-Cola Co. and owns some 50 businesses, including Dairy Queen ice cream, Fruit of the Loom underwear and Geico auto insurance.

Berkshire shares have lagged the Standard&Poor 500 index .SPX> over the last two years, but have far outgained the benchmark since Buffett took over Berkshire, then a struggling textile maker, in 1965.

The shares fell as much as 2.9 per cent yesterday as investors looked toward Buffett's eventual retirement, and the possible sale by the foundations of Berkshire stock to help fund giving.

''Those who are selling haven't thought this through,'' said Thomas Russo, a principal at Gardner, Russo&Gardner, which owns Berkshire stock. ''Warren will no longer have to distract himself with charitable donations, and can focus on the company.''

Reuters