Philanthropy etymologically means "the love of humanity." In modern practical terms, it is "private initiatives for public good, focusing on quality of life"—balancing the social-scientific aspect emphasized in the twentieth century, with the long-traditional and original humanistic core of the word's ancient coinage.

Put simply, philanthropy is the pursuit of excellence in every facet of human life, for every human life, by imagining and implementing new systems, to bring that philosophy to fruition.

An important distinction should be made, that while being admirable, charity is not the same as philanthropy. Simply argued by the concept that an implemented philanthropic idea may make its owner rich, if he or she so wishes. Compare this to the singular act of giving money away, associated with charity, the two concepts almost oppose each other. "A philanthropist knows the act of philanthropy before knowing the definition of the word". (Paul Gignac Philanthropist.)

Etymology and original meaning

It is generally agreed that the word was coined 2500 years ago in ancient Greece by the playwright, Aeschylus, or whoever else wrote ''Prometheus Bound'' (line 11). There the author told as a myth how the primitive creatures that were created to be human, at first had no knowledge, skills, or culture of any kind—so they lived in caves, in the dark, in constant fear for their lives. Zeus, the tyrannical king of the gods, decided to destroy them, but Prometheus, a Titan whose name meant “forethought,” out of his "''philanthropos tropos''" or “humanity-loving character” gave them two empowering, life-enhancing, gifts: fire, symbolizing all knowledge, skills, technology, arts, and science; and “blind hope” or optimism. The two went together—with fire, humans could be optimistic; with optimism, they could use fire constructively, to improve the human condition.

The new word, φιλάνθρωπος ''philanthropos'', combined two words: φίλος ''philos'', “loving” in the sense of benefitting, caring for, nourishing; and ἄνθρωπος ''anthropos'', “human being” in the sense of “humankind”, “humanity”, or “human-ness”. What Prometheus evidently “loved”, therefore, was their human potential—what they could accomplish and become with “fire” and “blind hope”. The two gifts in effect completed the creation of humankind as a distinctly civilized animal. 'Philanthropia'—loving what it is to be human—was thought to be the key to and essence of civilization.

The Greeks adopted the “love of humanity” as an educational ideal, whose goal was excellence (''arete'')—the fullest development of body, mind and spirit, which is the essence of liberal education. The Platonic Academy's philosophical dictionary defined ''Philanthropia'' as: “A state of well-educated habits stemming from love of humanity. A state of being productive of benefit to humans.” ''Philanthropia'' was later translated by the Romans into Latin as, simply, ''humanitas''—humane-ness. And because Prometheus’ human-empowering gifts rebelled against Zeus’ tyranny, ''philanthropia'' was also associated with freedom and democracy. Both Socrates and the laws of Athens were described as “philanthropic and democratic”—a common expression, the idea being that philanthropic humans are reliably capable of self-government.

Putting all this together in modern terms, there are four relatively authoritative definitions of “philanthropy” that come close to the Classical concept: John W. Gardner’s “private initiatives for the public good”; Robert Payton’s “voluntary action for the public good”; Lester Salamon’s “the private giving of time or valuables…for public purposes” and Robert Bremner’s “the aim of philanthropy…is improvement in the quality of human life”. Combining these to connect modern philanthropy with its entire previous history, “philanthropy” may best be defined as, “private initiatives for public good, focusing on quality of life.”

This distinguishes it from government (public initiatives for public good) and business (private initiatives for private good). Omitting the definite article “the” with “public good” avoids the dubious assumption that there is ever a single, knowable public good, and in any case people rarely if ever agree on what that might be; rather, this definition merely says that the benefactor intends a “public” rather than an exclusively “private” good or benefit. The inclusion of “quality of life” ensures the strong humanistic emphasis of the Promethean archetype.

The Classical view of philanthropy disappeared in the Middle Ages, was rediscovered and revived with the Renaissance, and came into the English language in the early 17th century. Sir Francis Bacon in 1592 wrote in a letter that his “vast contemplative ends” expressed his “philanthropia”, and his 1608 essay ''On Goodness'' defined his subject as “the affecting of the weale of men... what the Grecians call philanthropia.” Henry Cockeram, in his English dictionary (1623), cited “philanthropie” as a synonym for “humanitie” (in Latin, humanitas) — thus reaffirming the Classical formulation.

Views

Philosophy

The purpose of philanthropy is also debated. Some equate philanthropy with benevolence and charity for the poor. Others hold that philanthropy can be any altruistic act that fulfills a social need that is not served, is under-served, or is perceived as such by the market.

Some believe that philanthropy can be a means to build community by growing community funds and giving vehicles. When communities see themselves as being resource rich instead of asset poor, the community is in a better position to solve community problems.

However, some believe the purpose of philanthropy is often tribute and self-aggrandizement, as arguably shown by the prevalence of self-titled foundations, rarity of large anonymous donations, and lack of support for unpalatable causes such as the treatment of diarrhea (which despite being easily treatable is the second leading cause of infant death worldwide.)

Philanthropy responds to either the present or the future needs. The charitable response to an impending disaster is an action of philanthropy. It offers immediate honor for the philanthropist, yet requires no foresight. Responding to future needs, however, draws on the donor's foresight and wisdom, but seldom recognizes the donor. Prevention of future needs will often avert far more hardship than a response after the fact. For example, the charities responding to starvation from overpopulation in Africa are afforded swift recognition. Meanwhile, philanthropists behind the U.S. population control movement of the 1960s and 1970s were never recognized, and are lost to history.

Uses of the word

Conventional usage

By the conventional definition of philanthropy , donations are dedicated to a narrowly defined cause and the donation is targeted to effect a recognizable change in social conditions. This often necessitates large donations and financial support sustained over time.

The need for a large financial commitment creates a distinction between philanthropy and ''charitable giving'', which typically plays a supporting role in a charitable organization initiated by someone else. Thus, the conventional usage of ''philanthropy'' applies mainly to wealthy persons, and sometimes to a trust created by a wealthy person with a particular cause or objective targeted.

Many non-wealthy persons have dedicated – thus, donated – substantial portions of their time, effort and wealth to charitable causes. These people are not typically described as philanthropists because individual effort alone is seldom recognized as instigating significant change. These people are thought of as charitable workers but some people wish to recognize these people as philanthropists in honor of their efforts.

A growing trend in philanthropy is the development of giving circles, whereby individual donors—often a group of friends—pool their charitable donations and decide together how to use the money to benefit the causes they care about most. The re-emergence of philanthropy in recent years, led by Bill Gates and Warren Buffett, which involves applying the techniques of business to philanthropy has been termed philanthrocapitalism.'

Largest individual bequests

$31 billion from Warren Buffett to the Bill and Melinda Gates Foundation (initial value of the gift)

$9 billion from Chuck Feeney to Atlantic Philanthropies

$2 billion from Azim Premji to the Azim Premji Foundation in 2010. $500 million from T. Boone Pickens to Oklahoma State University. $500 million from Walter Annenberg to public school reform in the United States $350 million ($7 billion in modern terms) from Andrew Carnegie in 1901 who distributed most of his wealth to good causes, including the building Carnegie Hall New York City. $424 million from managers of the Reader's Digest fortune to the Metropolitan Museum of Art

$350 million from Michael Jackson who distributed most of his wealth to good causes, and who supported over 39 charity organizations. He was listed in the Guinness Book Of World Records for the "Most Charities Supported By a Pop Star".

$350 million from Yank Barry and his Global Village Champions in food, education and medical supplies to the needy around the World from 1990 to the present.

$225 million from Raymond and Ruth Perelman, parents of Ronald O. Perelman, to the University of Pennsylvania School of Medicine in 2011.

$200 million from Joan B. Kroc to National Public Radio in 2003 $100 million from John D. Rockefeller to the Rockefeller Foundation, 1913-1914 $100 million from Henry and Betty Rowan to Glassboro State College

See also

Alfanar

Triodos Bank

Ethical banking

Altruism

Charitable contributions (tax aspects)

Charitable organization

Charity (practice)

Foundation (nonprofit organization)

"Friends of" organization

Giving Circles

High impact philanthropy

History of Public Library Advocacy

Impact Investing

Microgiving

Misanthropy

Non-profit organization

Philanthropy in the United States

Public Library Advocacy

Tithe

Tzedakah

Venture philanthropy

Volunteer

Volunteerism

Youth philanthropy

Zakat

;Lists

List of philanthropists

List of wealthiest foundations

References

External links

ULIB.IUPUI.edu, Joseph and Matthew Payton Philanthropic Studies Library

ULIB.IUPUI.edu, Philanthropic Studies Index

NPtrust.org, History of Philanthropy, 1601–present compiled and edited by National Philanthropic Trust

MCCORD-museum.qc.ca, "A Bourgeois Duty: Philanthropy, 1896-1919" — Illustrated historical essay

GPR.hudson.org, PDF file from the Hudson Institute at ''The Index of Global Philanthropy 2006'' 83 page.

ULIB.IUPUI.edu, Philanthropy Resources Online

MyGivingPoint.org

IMPACT.UPENN.edu, Center for High Impact Philanthropy in the University of Pennsylvania School of Social Policy & Practice (SP2)

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Coordinates	51°30′03.40″N00°10′38.77″N
name	Bill Gates
birth date	October 28, 1955
birth place	Seattle, Washington, U.S.
birth name	William Henry Gates III
occupation	Chairman of MicrosoftChairman of CorbisCo-Chair of the Bill & Melinda Gates FoundationDirector of Berkshire HathawayCEO of Cascade Investment
years active	1975–present
nationality	American
net worth	US$56 billion (2011)
religion	Agnostic
spouse
children	3
residence	Medina, Washington, U.S.
alma mater	Harvard University (Dropout)
website	Bill Gates
signature	BillGates Signature.svg
parents	William H. Gates, Sr.Mary Maxwell Gates }}

William Henry "Bill" Gates III (born October 28, 1955) is an American business magnate, philanthropist, author and chairman of Microsoft, the software company he founded with Paul Allen. He is consistently ranked among the world's wealthiest people and was the wealthiest overall from 1995 to 2009, excluding 2008, when he was ranked third. During his career at Microsoft, Gates held the positions of CEO and chief software architect, and remains the largest individual shareholder, with more than 8 percent of the common stock. He has also authored or co-authored several books.

Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he is admired by many, a number of industry insiders criticize his business tactics, which they consider anti-competitive, an opinion which has in some cases been upheld by the courts. In the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating large amounts of money to various charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation, established in 2000.

Gates stepped down as chief executive officer of Microsoft in January 2000. He remained as chairman and created the position of chief software architect. In June 2006, Gates announced that he would be transitioning from full-time work at Microsoft to part-time work, and full-time work at the Bill & Melinda Gates Foundation. He gradually transferred his duties to Ray Ozzie, chief software architect, and Craig Mundie, chief research and strategy officer. Gates' last full-time day at Microsoft was June 27, 2008. He remains at Microsoft as non-executive chairman.

Early life

Gates was born in Seattle, Washington, to William H. Gates, Sr. and Mary Maxwell Gates, of English, German, and Scotch-Irish descent. His family was upper middle class; his father was a prominent lawyer, his mother served on the board of directors for First Interstate BancSystem and the United Way, and her father, J. W. Maxwell, was a national bank president. Gates has one elder sister, Kristi (Kristianne), and one younger sister, Libby. He was the fourth of his name in his family, but was known as William Gates III or "Trey" because his father had the "II" suffix. Early on in his life, Gates' parents had a law career in mind for him. When Gates was young, his family regularly attended a Congregational church.

At 13 he enrolled in the Lakeside School, an exclusive preparatory school. When he was in the eighth grade, the Mothers Club at the school used proceeds from Lakeside School's rummage sale to buy an Teletype Model 33 ASR terminal and a block of computer time on a General Electric (GE) computer for the school's students. Gates took an interest in programming the GE system in BASIC, and was excused from math classes to pursue his interest. He wrote his first computer program on this machine: an implementation of tic-tac-toe that allowed users to play games against the computer. Gates was fascinated by the machine and how it would always execute software code perfectly. When he reflected back on that moment, he said, "There was just something neat about the machine." After the Mothers Club donation was exhausted, he and other students sought time on systems including DEC PDP minicomputers. One of these systems was a PDP-10 belonging to Computer Center Corporation (CCC), which banned four Lakeside students—Gates, Paul Allen, Ric Weiland, and Kent Evans—for the summer after it caught them exploiting bugs in the operating system to obtain free computer time.

At the end of the ban, the four students offered to find bugs in CCC's software in exchange for computer time. Rather than use the system via Teletype, Gates went to CCC's offices and studied source code for various programs that ran on the system, including programs in FORTRAN, LISP, and machine language. The arrangement with CCC continued until 1970, when the company went out of business. The following year, Information Sciences, Inc. hired the four Lakeside students to write a payroll program in COBOL, providing them computer time and royalties. After his administrators became aware of his programming abilities, Gates wrote the school's computer program to schedule students in classes. He modified the code so that he was placed in classes with mostly female students. He later stated that "it was hard to tear myself away from a machine at which I could so unambiguously demonstrate success." At age 17, Gates formed a venture with Allen, called Traf-O-Data, to make traffic counters based on the Intel 8008 processor. In early 1973, Bill Gates served as a congressional page in the U.S. House of Representatives.

Gates graduated from Lakeside School in 1973. He scored 1590 out of 1600 on the SAT and enrolled at Harvard College in the autumn of 1973. While at Harvard, he met Steve Ballmer, who later succeeded Gates as CEO of Microsoft.

In his sophomore year, Gates devised an algorithm for pancake sorting as a solution to one of a series of unsolved problems presented in a combinatorics class by Harry Lewis, one of his professors. Gates' solution held the record as the fastest version for over thirty years; its successor is faster by only one percent. His solution was later formalized in a published paper in collaboration with Harvard computer scientist Christos Papadimitriou.

Gates did not have a definite study plan while a student at Harvard and spent a lot of time using the school's computers. Gates remained in contact with Paul Allen, joining him at Honeywell during the summer of 1974. The following year saw the release of the MITS Altair 8800 based on the Intel 8080 CPU, and Gates and Allen saw this as the opportunity to start their own computer software company. He had talked this decision over with his parents, who were supportive of him after seeing how much Gates wanted to start a company.

Microsoft

BASIC

After reading the January 1975 issue of ''Popular Electronics'' that demonstrated the Altair 8800, Gates contacted Micro Instrumentation and Telemetry Systems (MITS), the creators of the new microcomputer, to inform them that he and others were working on a BASIC interpreter for the platform. In reality, Gates and Allen did not have an Altair and had not written code for it; they merely wanted to gauge MITS's interest. MITS president Ed Roberts agreed to meet them for a demo, and over the course of a few weeks they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter. The demonstration, held at MITS's offices in Albuquerque, was a success and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. Paul Allen was hired into MITS, and Gates took a leave of absence from Harvard to work with Allen at MITS in Albuquerque in November 1975. They named their partnership "Micro-Soft" and had their first office located in Albuquerque. Within a year, the hyphen was dropped, and on November 26, 1976, the trade name "Microsoft" was registered with the Office of the Secretary of the State of New Mexico. Gates never returned to Harvard to complete his studies.

Microsoft's BASIC was popular with computer hobbyists, but Gates discovered that a pre-market copy had leaked into the community and was being widely copied and distributed. In February 1976, Gates wrote an Open Letter to Hobbyists in the MITS newsletter saying that MITS could not continue to produce, distribute, and maintain high-quality software without payment. This letter was unpopular with many computer hobbyists, but Gates persisted in his belief that software developers should be able to demand payment. Microsoft became independent of MITS in late 1976, and it continued to develop programming language software for various systems. The company moved from Albuquerque to its new home in Bellevue, Washington on January 1, 1979.

During Microsoft's early years, all employees had broad responsibility for the company's business. Gates oversaw the business details, but continued to write code as well. In the first five years, Gates personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit.

IBM partnership

In 1980, IBM approached Microsoft to write the BASIC interpreter for its upcoming personal computer, the IBM PC. When IBM's representatives mentioned that they needed an operating system, Gates referred them to Digital Research (DRI), makers of the widely used CP/M operating system. IBM's discussions with Digital Research went poorly, and they did not reach a licensing agreement. IBM representative Jack Sams mentioned the licensing difficulties during a subsequent meeting with Gates and told him to get an acceptable operating system. A few weeks later Gates proposed using 86-DOS (QDOS), an operating system similar to CP/M that Tim Paterson of Seattle Computer Products (SCP) had made for hardware similar to the PC. Microsoft made a deal with SCP to become the exclusive licensing agent, and later the full owner, of 86-DOS. After adapting the operating system for the PC, Microsoft delivered it to IBM as PC-DOS in exchange for a one-time fee of $50,000. Gates did not offer to transfer the copyright on the operating system, because he believed that other hardware vendors would clone IBM's system. They did, and the sales of MS-DOS made Microsoft a major player in the industry.

Gates oversaw Microsoft's company restructuring on June 25, 1981, which re-incorporated the company in Washington state and made Gates President of Microsoft and the Chairman of the Board.

Windows

Microsoft launched its first retail version of Microsoft Windows on November 20, 1985, and in August, the company struck a deal with IBM to develop a separate operating system called OS/2. Although the two companies successfully developed the first version of the new system, mounting creative differences undermined the partnership. Gates distributed an internal memo on May 16, 1991, announcing that the OS/2 partnership was over and Microsoft would shift its efforts to the Windows NT kernel development.

Management style

From Microsoft's founding in 1975 until 2006, Gates had primary responsibility for the company's product strategy. He aggressively broadened the company's range of products, and wherever Microsoft achieved a dominant position he vigorously defended it. He gained a reputation for being distant to others; as early as 1981 an industry executive complained in public that "Gates is notorious for not being reachable by phone and for not returning phone calls."

As an executive, Gates met regularly with Microsoft's senior managers and program managers. Firsthand accounts of these meetings describe him as verbally combative, berating managers for perceived holes in their business strategies or proposals that placed the company's long-term interests at risk. He often interrupted presentations with such comments as, "That's the stupidest thing I've ever heard!" and, "Why don't you just give up your options and join the Peace Corps?" The target of his outburst then had to defend the proposal in detail until, hopefully, Gates was fully convinced. When subordinates appeared to be procrastinating, he was known to remark sarcastically, "I'll do it over the weekend."

Gates' role at Microsoft for most of its history was primarily a management and executive role. However, he was an active software developer in the early years, particularly on the company's programming language products. He has not officially been on a development team since working on the TRS-80 Model 100, but wrote code as late as 1989 that shipped in the company's products. On June 15, 2006, Gates announced that he would transition out of his day-to-day role over the next two years to dedicate more time to philanthropy. He divided his responsibilities between two successors, placing Ray Ozzie in charge of day-to-day management and Craig Mundie in charge of long-term product strategy.

Antitrust litigation

Many decisions that led to antitrust litigation over Microsoft's business practices have had Gates' approval. In the 1998 ''United States v. Microsoft'' case, Gates gave deposition testimony that several journalists characterized as evasive. He argued with examiner David Boies over the contextual meaning of words like "compete", "concerned" and "we". ''BusinessWeek'' reported:

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Gates later said he had simply resisted attempts by Boies to mischaracterize his words and actions. As to his demeanor during the deposition, he said, "Did I fence with Boies? ... I plead guilty. Whatever that penalty is should be levied against me: rudeness to Boies in the first degree." Despite Gates's denials, the judge ruled that Microsoft had committed monopolization and tying, and blocking competition, both in violation of the Sherman Antitrust Act.

Appearance in ads

Gates appeared in a series of ads to promote Microsoft in 2008. The first commercial, co-starring Jerry Seinfeld, is a 90-second talk between strangers as Seinfeld walks up on a discount shoe store (Shoe Circus) in a mall and notices Gates buying shoes inside. The salesman is trying to sell Mr. Gates shoes that are a size too big. As Gates is buying the shoes, he holds up his discount card, which uses a slightly altered version of his own mugshot of his arrest in New Mexico in 1977 for a traffic violation. As they are walking out of the mall, Seinfeld asks Gates if he has melded his mind to other developers, after getting a yes, he then asks if they are working on a way to make computers edible, again getting a yes. Some say that this is an homage to Seinfeld's own show about "nothing" (''Seinfeld''). In a second commercial in the series, Gates and Seinfeld are at the home of an average family trying to fit in with normal people.

Post-Microsoft

Since leaving Microsoft, Gates continues his philanthropy and, among other projects, purchased the video rights to the Messenger Lectures series called ''The Character of Physical Law'', given at Cornell University by Richard Feynman in 1964 and recorded by the BBC. The videos are available online to the public at Microsoft's Project Tuva.

In April 2010, Gates was invited to visit and speak at the Massachusetts Institute of Technology where he asked the students to take on the hard problems of the world in their futures.

Personal life

Gates married Melinda French on January 1, 1994. They have three children: daughter Jennifer Katharine Gates (born 1996), son Rory John Gates (born 1999), and daughter Phoebe Adele Gates (born 2002). The Gates's home is an earth-sheltered house in the side of a hill overlooking Lake Washington in Medina. According to King County public records, as of 2006 the total assessed value of the property (land and house) is $125 million, and the annual property tax is $991,000.

His estate has a swimming pool with an underwater music system, as well as a gym and a dining room.

Also among Gates' private acquisitions is the Codex Leicester, a collection of writings by Leonardo da Vinci, which Gates bought for $30.8 million at an auction in 1994. Gates is also known as an avid reader, and the ceiling of his large home library is engraved with a quotation from ''The Great Gatsby''. He also enjoys playing bridge, tennis, and golf.

Gates was number one on the Forbes 400 list from 1993 through to 2007 and number one on ''Forbes'' list of The World's Richest People from 1995 to 2007 and 2009. In 1999, Gates's wealth briefly surpassed $101 billion, causing the media to call him a "centibillionaire". Since 2000, the nominal value of his Microsoft holdings has declined due to a fall in Microsoft's stock price after the dot-com bubble burst and the multi-billion dollar donations he has made to his charitable foundations. In a May 2006 interview, Gates commented that he wished that he were not the richest man in the world because he disliked the attention it brought. Gates has several investments outside Microsoft, which in 2006 paid him a salary of $616,667 and $350,000 bonus totalling $966,667. He founded Corbis, a digital imaging company, in 1989. In 2004 he became a director of Berkshire Hathaway, the investment company headed by long-time friend Warren Buffett. In March 2010 Bill Gates was bumped down to the second wealthiest man behind Carlos Slim.

Philanthropy

Gates began to appreciate the expectations others had of him when public opinion mounted suggesting that he could give more of his wealth to charity. Gates studied the work of Andrew Carnegie and John D. Rockefeller, and in 1994 sold some of his Microsoft stock to create the William H. Gates Foundation. In 2000, Gates and his wife combined three family foundations into one to create the charitable Bill & Melinda Gates Foundation, which is the largest transparently operated charitable foundation in the world. The foundation allows benefactors access to information regarding how its money is being spent, unlike other major charitable organizations such as the Wellcome Trust. The generosity and extensive philanthropy of David Rockefeller has been credited as a major influence. Gates and his father met with Rockefeller several times, and modeled their giving in part on the Rockefeller family's philanthropic focus, namely those global problems that are ignored by governments and other organizations. As of 2007, Bill and Melinda Gates were the second-most generous philanthropists in America, having given over $28 billion to charity.

The foundation was at the same time criticized because it invests assets that it has not yet distributed with the exclusive goal of maximizing return on investment. As a result, its investments include companies that have been charged with worsening poverty in the same developing countries where the Foundation is attempting to relieve poverty. These include companies that pollute heavily, and pharmaceutical companies that do not sell into the developing world. In response to press criticism, the foundation announced in 2007 a review of its investments, to assess social responsibility. It subsequently canceled the review and stood by its policy of investing for maximum return, while using voting rights to influence company practices.

Gates's wife urged people to learn a lesson from the philanthropic efforts of the Salwen family, which had sold its home and given away half of its value, as detailed in ''The Power of Half''. Gates and his wife invited Joan Salwen to Seattle to speak about what the family had done, and on December 9, 2010, Gates, investor Warren Buffett, and Mark Zuckerberg (Facebook's CEO) signed a promise they called the "Gates-Buffet Giving Pledge", in which they promised to donate to charity at least half of their wealth over the course of time.

Recognition

In 1987, Gates was officially declared a billionaire in the pages of Forbes' 400 Richest People in America issue, just days before his 32nd birthday. As the world's youngest self-made billionaire, he was worth $1.25 billion, over $900 million more than he'd been worth the year before, when he'd debuted on the list.

''Time'' magazine named Gates one of the 100 people who most influenced the 20th century, as well as one of the 100 most influential people of 2004, 2005, and 2006. ''Time'' also collectively named Gates, his wife Melinda and U2's lead singer Bono as the 2005 Persons of the Year for their humanitarian efforts. In 2006, he was voted eighth in the list of "Heroes of our time". Gates was listed in the ''Sunday Times'' power list in 1999, named CEO of the year by ''Chief Executive Officers magazine'' in 1994, ranked number one in the "Top 50 Cyber Elite" by ''Time'' in 1998, ranked number two in the ''Upside'' Elite 100 in 1999 and was included in ''The Guardian'' as one of the "Top 100 influential people in media" in 2001.

In 1994, he was honoured as the twentieth Distinguished Fellow of the British Computer Society. Gates has received honorary doctorates from Nyenrode Business Universiteit, Breukelen, The Netherlands, in 2000; the Royal Institute of Technology, Stockholm, Sweden, in 2002; Waseda University, Tokyo, Japan, in 2005; Tsinghua University, Beijing, China, in April 2007; Harvard University in June 2007; the Karolinska Institutet, Stockholm, in January 2008, and Cambridge University in June 2009. He was also made an honorary trustee of Peking University in 2007. Gates was also made an honorary Knight Commander of the Order of the British Empire (KBE) by Queen Elizabeth II in 2005, in addition to having entomologists name the Bill Gates flower fly, ''Eristalis gatesi'', in his honor.

In November 2006, he and his wife were awarded the Order of the Aztec Eagle for their philanthropic work around the world in the areas of health and education, particularly in Mexico, and specifically in the program "''Un país de lectores"''. In October 2009, it was announced that Gates will be awarded the 2010 Bower Award for Business Leadership of The Franklin Institute for his achievements in business and for his philanthropic work. In 2010 he was honored with the Silver Buffalo Award by the Boy Scouts of America, its highest award for adults, for his service to youth.

Investments

Cascade Investments LLC, a private investment and holding company, incorporated in United States, is controlled by Bill Gates, and is headquartered in the city of Kirkland, Washington.

bgC3, a new think-tank company founded by Bill Gates.

Corbis, a digital image licensing and rights services company.

TerraPower, a nuclear reactor design company.

Bibliography

Gates has authored two books:

''The Road Ahead'' (1995)

''Business @ the Speed of Thought'' (1999)

Filmography

Gates has appeared in at least one film: ''Waiting For Superman''

See also

List of billionaires (also see List of college dropout billionaires and List of wealthiest non-inflated historical figures)

Paul Allen – Microsoft's co-founder, friend, and fellow billionaire

Books

References

Further reading

"The Meaning of Bill Gates: As his reign at Microsoft comes to an end, so does the era he dominated", ''The Economist'', June 28, 2008.

External links

The Gates Notes ''official site''

Bill & Melinda Gates Foundation

Profile at Microsoft

Profile at Forbes

How I Work: Bill Gates, ''Fortune'', March 30, 2006

Category:1955 births Category:American billionaires Category:American computer businesspeople Category:American chief executives Category:American computer programmers Category:American philanthropists Category:American technology writers Category:Bill & Melinda Gates Foundation people Category:Businesspeople in software Category:Harvard University people Category:Honorary Knights Commander of the Order of the British Empire Category:Members of the United States National Academy of Engineering Category:Microsoft employees Category:History of Microsoft Category:National Medal of Technology recipients Category:Living people Category:People from Seattle, Washington Category:People from King County, Washington Category:Windows people Category:Fellows of the British Computer Society Category:American people of Scottish descent

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Coordinates	51°30′03.40″N00°10′38.77″N
name	Warren Buffett
birth name	Warren Edward Buffett
birth date	August 30, 1930
birth place	Omaha, Nebraska, U.S.
nationality	American
alma mater	University of NebraskaColumbia Business School
occupation	Businessman, Investor
salary	US$100,000
networth	US$50 billion (2011)
spouse	Susan Thompson Buffett (1952–2004)Astrid Menks (2006–present)
children	Susan Alice BuffettHoward Graham BuffettPeter Andrew Buffett
signature	Warren Buffett Signature.svg }}

Warren Edward Buffett (; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008 and is the third wealthiest person in the world as of 2011.

Buffett is called the "Oracle of Omaha" or the "Sage of Omaha" and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. Buffett is also a notable philanthropist, having pledged to give away 99 percent of his fortune to philanthropic causes, primarily via the Gates Foundation. He also serves as a member of the board of trustees at Grinnell College.

Early life

Buffett was born in 1930 in Omaha, Nebraska, the second of three children and only son of U.S. Representative Howard Buffett,, a fierce critic of the interventionist New Deal domestic and foreign policy, and his wife Leila (née Stahl). Buffett began his education at Rose Hill Elementary School in Omaha. In 1942, his father was elected to the first of four terms in the United States Congress, and after moving with his family to Washington, D.C., Warren finished elementary school, attended Alice Deal Junior High School, and graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads: "likes math; a future stock broker."

Even as a child, Buffett displayed an interest in making and saving money. He went door to door selling chewing gum, Coca-Cola, or weekly magazines. For a while, he worked in his grandfather's grocery store. While still in high school he was successful in making money by delivering newspapers, selling golfballs and stamps, and detailing cars, among other means. Filing his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route. In 1945, in his sophomore year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in different barber shops.

Buffett's interest in the stock market and investing also dated to his childhood, to the days he spent in the customers' lounge of a regional stock brokerage near the office of his father's own brokerage company. On a trip to New York City at the age of ten, he made a point to visit the New York Stock Exchange. At the age of 11, he bought three shares of Cities Service Preferred for himself, and three for his sister. While in high school he invested in a business owned by his father and bought a farm worked by a tenant farmer. By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.

Buffett entered college as a freshmen in 1947 at the Wharton Business School of the University of Pennsylvania and studied there for two years from 1947 to 1949. In the year 1950, when he entered his junior year, he transferred to the University of Nebraska–Lincoln where at the age of nineteen, he graduated with a degree of Bachelor of Science in Business Administration. After the completion of his undergraduate studies, Buffett enrolled at Columbia Business School after learning that Benjamin Graham (author of "The Intelligent Investor" – one of his favorite books on investing) and David Dodd, two well-known securities analysts, taught there. He received a M.S. in Economics from Columbia Business School in 1951. Buffett also attended the New York Institute of Finance. In Buffett’s own words:

The basic ideas of investing are to look at stocks as business, use the market's fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham taught us. A hundred years from now they will still be the cornerstones of investing.}}

Career

Warren Buffett was employed from 1951–54 at ''Buffett-Falk & Co.'', Omaha as an investment salesman, from 1954–1956 at ''Graham-Newman Corp.'', New York as a securities analyst, from 1956–1969 at ''Buffett Partnership, Ltd.'', Omaha as a general partner and from 1970 – Present at Berkshire Hathaway Inc, Omaha as its Chairman, CEO.

In 1950, at the age of 20, Buffett had made and saved $9,800. In April 1952, Buffett discovered Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett's life-long friend and a lasting influence and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes. Buffett graduated from Columbia and wanted to work on Wall Street, however, both his father and Ben Graham urged him not to. He offered to work for Graham for free, but Graham refused.

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha. The average age of his students was more than twice his own. During this time he also purchased a Sinclair Texaco gas station as a side investment. However, this did not turn out to be a successful business venture.

In 1952 Buffett married Susan Thompson at Dundee Presbyterian Church and the next year they had their first child, Susan Alice Buffett. In 1954, Buffett accepted a job at Benjamin Graham's partnership. His starting salary was $12,000 a year (approximately $97,000 adjusted to 2008 dollars). There he worked closely with Walter Schloss. Graham was a tough man to work for. He was adamant that stocks provide a wide margin of safety after weighting the trade-off between their price and their intrinsic value. The argument made sense to Buffett but he questioned whether the criteria were too stringent and caused the company to miss out on big winners that had more qualitative values. That same year the Buffetts had their second child, Howard Graham Buffett. In 1956, Benjamin Graham retired and closed his partnership. At this time Buffett's personal savings were over $174,000 ($1.2 million inflation adjusted to 2009 dollars) and he started Buffett Partnership Ltd., an investment partnership in Omaha.

In 1957, Buffett had three partnerships operating the entire year. He purchased a five-bedroom stucco house in Omaha, where he still lives, for $31,500. In 1958 the Buffett's third child, Peter Andrew Buffett, was born. Buffett operated five partnerships the entire year. In 1959, the company grew to six partnerships operating the entire year and Buffett was introduced to Charlie Munger. By 1960, Buffett had seven partnerships operating: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff and Underwood. He asked one of his partners, a doctor, to find ten other doctors willing to invest $10,000 each in his partnership. Eventually eleven agreed, and Buffett pooled their money with a mere $100 original investment of his own. In 1961, Buffett revealed that Sanborn Map Company accounted for 35% of the partnership's assets. He explained that in 1958 Sanborn stock sold at only $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant that buyers valued Sanborn stock at "minus $20" per share and were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing. This earned him a spot on the board of Sanborn.

As a millionaire

In 1962, Buffett became a millionaire because of his partnerships, which in January 1962 had an excess of $7,178,500, of which over $1,025,000 belonged to Buffett. Buffett merged all partnerships into one partnership. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share. In 1965, when Buffett's partnerships began purchasing Berkshire aggressively, they paid $14.86 per share while the company had working capital of $19 per share. This did not include the value of fixed assets (factory and equipment). Buffett took control of Berkshire Hathaway at the board meeting and named a new president, Ken Chace, to run the company. In 1966, Buffett closed the partnership to new money. Buffett wrote in his letter: "... unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL."

In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn and Co, a privately owned Baltimore department store. In 1967, Berkshire paid out its first and only dividend of 10 cents. In 1969, following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway. In 1970, as chairman of Berkshire Hathaway, Buffett began writing his now-famous annual letters to shareholders. However, he lived solely on his salary of $50,000 per year, and his outside investment income. In 1979, Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.

In 1973, Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors. In 1974, the SEC opened a formal investigation into Warren Buffett and Berkshire's acquisition of WESCO, due to possible conflict of interest. No charges were brought. In 1977, Berkshire indirectly purchased the ''Buffalo Evening News'' for $32.5 million. Antitrust charges started, instigated by its rival, the ''Buffalo Courier-Express''. Both papers lost money, until the ''Courier-Express'' folded in 1982.

In 1979, Berkshire began to acquire stock in ABC. Capital Cities announced $3.5 billion purchase of ABC on March 18, 1985 surprised the media industry, as ABC was four times bigger than Capital Cities at the time. Berkshire Hathaway chairman Warren Buffett helped finance the deal in return for a 25% stake in the combined company. The newly merged company, known as Capital Cities/ABC (or CapCities/ABC), was forced to sell off some stations due to FCC ownership rules. Also, the two companies owned several radio stations in the same markets.

In 1987, Berkshire Hathaway purchased a 12% stake in Salomon Inc., making it the largest shareholder and Buffett the director. In 1990, a scandal involving John Gutfreund (former CEO of Salomon Brothers) surfaced. A rogue trader, Paul Mozer, was submitting bids in excess of what was allowed by the Treasury rules. When this was discovered and brought to the attention of Gutfreund, he did not immediately suspend the rogue trader. Gutfreund left the company in August 1991. Buffett became Chairman of Salomon until the crisis passed; on September 4, 1991, he testified before Congress. In 1988, Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7% of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.

As a billionaire

Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share. In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG's board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General's office agreed to a settlement in which AIG would pay a fine of $1.6 billion. In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing 'corporate governance concessions'.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation. In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Late 2000s recession

Buffett ran into criticism during the subprime crisis of 2007–2008, part of the late 2000s recession, that he had allocated capital too early resulting in suboptimal deals. “Buy American. I am.” he wrote for an opinion piece published recently in the New York Times. Buffett has called the 2007—present downturn in the financial sector "poetic justice". Buffett's Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear to be running into large mark-to-market losses.

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs. Some of Buffett's Index put options (European exercise at expiry only) that he wrote (sold) are currently running around $6.73 billion mark-to-market losses. The scale of the potential loss prompted the SEC to demand that Berkshire produce, "a more robust disclosure" of factors used to value the contracts. Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway, which provided $3 billion, underlining his instrumental role during the current crisis in debt and equity markets.

In 2008, Buffett became the richest man in the world dethroning Bill Gates, worth $62 billion according to Forbes, and $58 billion according to Yahoo. Bill Gates had been number one on the Forbes list for 13 consecutive years. In 2009, Bill Gates regained number one of the list according to Forbes magazine, with Buffett second. Their values have dropped to $40 billion and $37 billion respectively, Buffett having (according to Forbes) lost $25 billion in 12 months during 2008/2009.

In October 2008, the media reported that Warren Buffett had agreed to buy General Electric (GE) preferred stock. The operation included extra special incentives: he received an option to buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable within three years). In February 2009, Buffett sold some of the Procter & Gamble Co, and Johnson & Johnson shares from his portfolio.

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping some of Berkshire's major holdings, including The Coca-Cola Company (NYSE:KO) which in 1998 peaked at $86. Buffett discussed the difficulties of knowing when to sell in the company's 2004 annual report:

That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged.

In March 2009, Buffett stated in a cable television interview that the economy had "fallen off a cliff... Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen". Additionally, Buffett fears we may revisit a 1970s level of inflation, which led to a painful stagflation that lasted many years.

In 2009, Warren Buffett invested $2.6 billion as a part of Swiss Re's raising equity capital. Berkshire Hathaway already owns a 3% stake, with rights to own more than 20%. In 2009, Warren Buffett acquired Burlington Northern Santa Fe Corp. for $34 billion in cash and stock. Alice Schroeder, author of Snowball, stated that a reason for the purchase was to diversify Berkshire Hathaway from the financial industry. Measured by market capitalization in the Financial Times Global 500 Berkshire Hathaway as of June 2009 was the eighteenth largest corporation on earth.

In 2009, Buffett divested his failed investment in ConocoPhillips, saying to his Berkshire investors,

I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40–$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.

The merger with the Burlington Northern Santa Fe Railway (BNSF) closed upon BNSF shareholder approval in 1Q2010. This deal is valued at approximately $34 billion and reflects an increase of a previously existing stake of about 22%.

In June 2010, Buffett defended the credit rating agencies for their role in the US financial crisis, claiming that:

Very, very few people could appreciate the bubble. That's the nature of bubbles – they're mass delusions.

On March 18, 2011, Goldman Sachs acquired Federal Reserve approval to buy back Berkshire's preferred stock in Goldman. Buffet has been reluctant to give up the stock which averages $1.4 million in dividend a day, stating:

I'm going to be the Osama bin Laden of capitalism. I'm on my way to an unknown destination in Asia where I'm going to look for a cave. If the U.S. Armed forces can't find Osama bin Laden in 10 years, let Goldman Sachs try to find me.

Personal life

Buffett married Susan Buffett (née Thompson) in 1952. They had three children, Susie, Howard and Peter. The couple began living separately in 1977, although they remained married until her death in July 2004. Their daughter, Susie, lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc. In 2006, on his seventy-sixth birthday, Warren married his never-married longtime-companion, Astrid Menks, who was then 60 years old. She had lived with him since his wife's departure to San Francisco in 1977. It was Susan Buffett who arranged for the two to meet before she left Omaha to pursue her singing career. All three were close and Christmas cards to friends were signed "Warren, Susie and Astrid". Susan Buffett briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett's personal life.

Warren Buffett disowned his son Peter's adopted daughter, Nicole, in 2006 after she participated in the Jamie Johnson documentary, ''The One Percent.'' Although his first wife had referred to Nicole as one of her "adored grandchildren", Buffett wrote her a letter stating, "I have not emotionally or legally adopted you as a grandchild, nor have the rest of my family adopted you as a niece or a cousin." He signed the letter "Warren."

His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies. In 2007 and 2008, he earned a total compensation of $175,000, which included a base salary of just $100,000. He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at around $700,000 (although he also owns a $4 million house in Laguna Beach, California). In 1989 after having spent nearly 6.7 million dollars of Berkshire's funds on a private jet, Buffett sheepishly named it "''The Indefensible''". This act was a break from his past condemnation of extravagant purchases by other CEOs and his history of using more public transportation.

He remains an avid player of bridge, which he learned from Sharon Osberg, and plays with her and Bill Gates. He spends twelve hours a week playing the game. In 2006, he sponsored a bridge match for the Buffett Cup. Modeled on the Ryder Cup in golf, held immediately before it, and in the same city, a team of twelve bridge players from the United States took on twelve Europeans in the event. He is a dedicated, lifelong follower of Nebraska football, and attends as many games as his schedule permits. He supported the hire of Bo Pelini following the 2007 season stating, "It was getting kind of desperate around here". He watched the 2009 game against Oklahoma from the Nebraska sideline after being named an honorary assistant coach.

Warren Buffett worked with Christopher Webber on an animated series with chief Andy Heyward, of DiC Entertainment, and then A Squared Entertainment. The series features Buffett and Munger, and teaches children healthy financial habits for life. Buffett was raised Presbyterian but has since described himself as agnostic. In December 2006 it was reported that Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own automobile, a Cadillac DTS. Buffett wears tailor-made suits from the Chinese label Trands; earlier he wore Ermenegildo Zegna.

Lineage

Buffett's DNA report revealed that his paternal ancestors hail from northern Scandinavia, while his maternal ancestors most likely have roots in Iberia or Estonia.

Recognition

In 1999, Buffett was named the top money manager of the Twentieth Century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among ''Time'''s 100 Most Influential People in the world. In 2011, President Barack Obama awarded him the Presidential Medal of Freedom. Most recently, Buffett, along with Bill Gates, was named the most influential global thinker in Foreign Policy's 2010 report.

Politics

In addition to other political contributions over the years, Buffett has formally endorsed and made campaign contributions to Barack Obama's presidential campaign. On July 2, 2008, Buffett attended a $28,500 per plate fundraiser for Obama's campaign in Chicago hosted by Obama's National Finance Chair, Penny Pritzker and her husband, as well as Obama advisor Valerie Jarrett. Buffett backed Obama for president, and intimated that John McCain's views on social justice were so far from his own that McCain would need a "lobotomy" for Buffett to change his endorsement. During the second 2008 U.S. presidential debate, candidates John McCain and Barack Obama, after being asked first by presidential debate mediator Tom Brokaw, both mentioned Buffett as a possible future Secretary of the Treasury. Later, in the third and final presidential debate, Obama mentioned Buffett as a potential economic advisor. Buffett was also finance advisor to California Republican Governor Arnold Schwarzenegger during his 2003 election campaign.

Writings

Warren Buffett's writings include his annual reports and various articles. Buffett is recognized by communicators as a great story-teller, as evidenced by his annual letters to shareholders. He warned about the pernicious effects of inflation:

In his article ''The Superinvestors of Graham-and-Doddsville'', Buffett rebutted the academic Efficient-market hypothesis, that beating the S&P; 500 was "pure chance", by highlighting the results achieved by a number of students of the Graham and Dodd value investing school of thought. In addition to himself, Buffett named Walter J. Schloss, Tom Knapp, Ed Anderson (Tweedy, Brown Inc.), Bill Ruane (Sequoia Fund, Inc.), Charles Munger (Buffett's own business partner at Berkshire), Rick Guerin (Pacific Partners, Ltd.), and Stan Perlmeter (Perlmeter Investments). In his November 1999 ''Fortune'' article, he warned of investors' unrealistic expectations:

Wealth

In 2008 he was ranked by ''Forbes'' as the richest person in the world with an estimated net worth of approximately US$62 billion. In 2009, after donating billions of dollars to charity, Buffett was ranked as the second richest man in the United States with a net worth of US$37 billion with only Bill Gates ranked higher than Buffett. His net worth is up to $47 billion in the past 12 months.

Philanthropy

The following quotation from 1988 highlights Warren Buffett's thoughts on his wealth and why he long planned to re-allocate it:

From a ''NY Times'' article: "I don't believe in dynastic wealth", Warren Buffett said, calling those who grow up in wealthy circumstances "members of the lucky sperm club". Buffett has written several times of his belief that, in a market economy, the rich earn outsized rewards for their talents:

His children will not inherit a significant proportion of his wealth. This is consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next. Buffett once commented, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing".

In June 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation. He pledged about the equivalent of 10 million Berkshire Hathaway Class B shares to the Bill & Melinda Gates Foundation (worth approximately US$30.7 billion as of June 23, 2006), making it the largest charitable donation in history, and Buffett one of the leaders of philanthrocapitalism. The foundation will receive 5% of the total donation on an annualised basis each July, beginning in 2006. (Significantly, however, the pledge is conditional upon the foundation's giving away each year, beginning in 2009, an amount that is at least equal to the value of the entire previous year's gift from Buffett, in addition to 5% of the foundation's net assets.) Buffett also will join the board of directors of the Gates Foundation, although he does not plan to be actively involved in the foundation's investments.

This is a significant shift from previous statements Buffett has made, having stated that most of his fortune would pass to his Buffett Foundation. The bulk of the estate of his wife, valued at $2.6 billion, went to that foundation when she died in 2004. He also pledged $50-million to the Nuclear Threat Initiative, in Washington, where he has served as an adviser since 2002.

In 2006, he auctioned his 2001 Lincoln Town Car on eBay to raise money for Girls, Inc. In 2007, he auctioned a luncheon with himself that raised a final bid of $650,100 for a charity. On June 27, 2008, Zhao Danyang, a general manager at Pure Heart China Growth Investment Fund, won the 2008 5-day online "Power Lunch with Warren Buffett" charity auction with a bid of $2,110,100. Auction proceeds benefit the San Francisco Glide Foundation. The following year, executives from Toronto-based Salida Capital paid US$1.68 million to dine with Buffett.

In a letter to Fortune Magazine's website in 2010 Buffett remarked:

This statement was made as part of a joint proposal with Bill Gates to encourage other wealthy individuals to pool some of their fortunes for charitable purposes.

Bill Gates's wife Melinda urged people to learn a lesson from the philanthropic efforts of the family that sold its home and gave away half of its value, as detailed in ''The Power of Half''. On December 9, 2010, Buffett, Bill Gates, and Mark Zuckerberg (Facebook's CEO), signed a promise they called the "Gates-Buffett Giving Pledge", in which they promised to donate to charity at least half of their wealth over time, and invited others among the wealthy to donate 50% or more of their wealth to charity.

Public positions

Buffett's speeches are known for mixing business discussions with humor. Each year, Buffett presides over Berkshire Hathaway's annual shareholder meeting in the Qwest Center in Omaha, Nebraska, an event drawing over 20,000 visitors from both United States and abroad, giving it the nickname "Woodstock of Capitalism". Berkshire's annual reports and letters to shareholders, prepared by Buffett, frequently receive coverage by the financial media. Buffett's writings are known for containing quotations from sources as ranging between the Bible and Mae West, as well as advice in a Midwestern folk style, and numerous jokes.

Tobacco

During the RJR Nabisco, Inc. hostile takeover fight in 1987, Buffett was quoted as telling John Gutfreund:

Speaking at Berkshire Hathaway Inc.'s 1994 annual meeting, Buffett said investments in tobacco are:

Coal

In 2007, Buffett's PacifiCorp, a subsidiary of his MidAmerican Energy Company, canceled six proposed coal-fired power plants. These included Utah's Intermountain Power Project Unit 3, Jim Bridger Unit 5, and four proposed plants previously included in PacifiCorp's Integrated Resource Plan. The cancellations came in the wake of pressure from regulators and citizen groups, including a petition drive organized by Salt Lake City commercial real estate broker Alexander Lofft and directed at Buffett personally. The 1,600 petitioners, who described themselves in a letter to Buffett as "a collection of citizens, business owners and managers, service professionals, public servants, and organization representatives ... your friends and new customers here in Utah," explained that, in their view, any further expansion of coal generation in Utah would "compromise our health, obscure our viewsheds, shrink and contaminate our watersheds, and thin out our most beloved snow pack," concluding that "our attractiveness as a place to live and work is also threatened, and so is our economic competitiveness as a major metro area and a state, compromising our recent gains in income and property values".

Klamath river

American Indian tribes and salmon fishermen sought to win support from Warren Buffett for a proposal to remove four hydroelectric dams from the Klamath River. He had David Sokol respond that the FERC would decide the question.

Trade deficit

Buffett views the United States' expanding trade deficit as a trend that will devalue the US dollar and US assets. He believes that the US dollar will lose value in the long run, as a result of putting a larger portion of ownership of US assets in the hands of foreigners. In his letter to shareholders in March 2005, Warren Buffett predicted that in another ten years’ time the net ownership of the U.S. by outsiders would amount to $11 trillion.

Americans ... would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an ‘ownership society’ will not find happiness in – and I’ll use hyperbole here for emphasis – a 'sharecropping society’.

Author Ann Pettifor has adopted the image in her writings and has stated: "He is right. And so the thing we must fear most now, is not just the collapse of banks and investment funds, or of the international financial architecture, but of a 'sharecropper society, angry at its downfall".

Dollar and gold

The trade deficit induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to acquire companies which derive a substantial portion of their revenues from outside the United States. Buffett emphasized the non-productive aspect of a gold standard for the USD in 1998 at Harvard:

It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

In 1977 Buffett was also quoted as saying about stocks, gold, farmland, and inflation:

Stocks are probably still the best of all the poor alternatives in an era of inflation – at least they are if you buy in at appropriate prices.

Taxes

Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes (due to their being from dividends & capital gains), while his employees paid 33% of theirs, despite making much less money. “How can this be fair?” Buffet asked, regarding how little he pays in taxes compared to his employees. “How can this be right?” He also added:

: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics". In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy. Some critics have argued that Buffett (through Berkshire Hathaway) has a personal interest in the continuation of the estate tax, since Berkshire Hathaway has benefited from the estate tax in past business dealings and had developed and marketed insurance policies to protect policy holders against future estate tax payments. Buffett believes government should not be in the business of gambling, or legalizing casinos, calling it a tax on ignorance.

Expensing of stock options

He has been a strong proponent of stock option expensing on the Income Statement. At the 2004 annual meeting, he lambasted a bill before the United States Congress that would consider only some company-issued stock options compensation as an expense, likening the bill to one that was almost passed by the Indiana House of Representatives to change the value of Pi from 3.14159 to 3.2 through legislative fiat.

When a company gives something of value to its employees in return for their services, it is clearly a compensation expense. And if expenses don't belong in the earnings statement, where in the world do they belong?

Investing in China

Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary on Berkshire Hathaway's website stating why he would not divest from the company despite calls from some activists to do so, due to its connection with the Sudanese civil war that caused Harvard to divest from the company in 2005. He did, however, sell this stake soon afterwards, sparing him the billions of dollars he would have lost had he held on to the company in the midst of the steep drop in oil prices beginning in the summer of 2008.

In October 2008, Buffett invested in new energy automobile business by paying $230 million for 10% of BYD Company (), which runs a subsidiary of electric automobile manufacturer BYD Auto. In less than one year, the investment has reaped him over 500% return of profit.

Books about Buffett

Numerous books have been written about Warren Buffett and his investment strategies. In October 2008, ''USA Today'' reported that there were at least 47 books in print with Buffett's name in the title. The article quoted the CEO of Borders Books, George Jones, as saying that the only other living persons named in as many book titles were U.S. presidents, major world political figures, and the Dalai Lama. Buffett said that his own personal favorite is a collection of his essays called ''The Essays of Warren Buffett'', which he described as "a coherent rearrangement of ideas from my annual report letters" as edited by Larry Cunningham.

Some best-selling, or otherwise notable, books about Buffett:

Roger Lowenstein, ''Buffett, Making of an American Capitalist''

Robert Hagstrom, ''The Warren Buffett Way''. Alice Schroeder, ''The Snowball: Warren Buffett and the Business of Life''. (Written with Buffett's cooperation.) Mary Buffett and David Clark, ''Buffettology'' and four subsequent books. (Combined sales of more than 1.5 million copies.) Janet Lowe, ''Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor''. John Train, ''The Midas Touch: The Strategies That Have Made Warren Buffett 'America's Preeminent Investor'.'' Andrew Kilpatrick, ''Of Permanent Value: The Story of Warren Buffett''. (The longest of the books about Buffett, with 330 chapters, 1,874 pages and 1,400 photos, weighing 10.2 pounds.) John P. Reese, "The Guru Investor: How to Beat the Market Using History's Best Investment Strategies". (Includes step-by-step stock-picking method based on Buffett's approach) Janet M. Tavakoli, ''Dear Mr. Buffett: what an investor learns 1,269 miles from Wall Street'', John Wiley and Sons, 2008, ISBN 9780470406786

Bibliography

''The Essays of Warren Buffett : Lessons for Corporate America'', Warren Buffett and Lawrence A. Cunningham, The Cunningham Group; revised edition (April 11, 2001), ISBN 978-0966446111

''The Essays of Warren Buffett: Lessons for Corporate America, Second Edition'', Warren E. Buffett and Lawrence A. Cunningham, The Cunningham Group; 2nd edition (April 14, 2008), ISBN 978-0966446128

See also

Forbes list of billionaires

References

External links

Berkshire Hathaway official website

Latest Holdings In Berkshire Hathaway Portfolio, Dynamically Updated

Buffett Partnership Letters

Berkshire Hathaway SEC 13F Filings

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