Two billionaires team up to save the world.

A summary of what's in the major U.S. newspapers.
June 26 2006 6:22 AM

Big Buffett Helpings

The Los Angeles Times and USA Today lead with billionaire investor Warren Buffett's decision to donate most of his immense fortune to charity, with the largest portion of the money, by far, going to a charitable foundation established by his friend Bill Gates. The gift, stock currently valued at around $30 billion, will double the size of Gates' foundation, which was already the best-endowed private charity in the world. The Wall Street Journaltops its world-wide newsbox with the Iraqi prime minister's long-awaited announcement of an amnesty for insurgents who renounce violence. The New York Times off-leads Buffett's boon but gives the top spot to a militant attack on Israeli troops along the border with Gaza, "an ominous development" that could be a harbinger of a serious increase in violence. The Washington Post leads with a story on Afghan President Hamid Karzai's declining popularity.

Buffett disclosed his plan in an interview with Fortune reporter Carol Loomis, who is apparently a longtime friend and an investor in his company. (Which in itself seems like a story.) The gift will take the form of yearly grants of stock in his holding company, Berkshire Hathaway, which in total are now worth around $37.4 billion. About $6 billion will go to various foundations associated with Buffett's children and his late wife. The rest will go to the Bill and Melinda Gates Foundation, which focuses on issues of education and public health, giving it an endowment of around $60 billion. The value of the gifts could increase if the value of Buffett's stock goes up, as it tends to.

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How much money is $60 billion? "By comparison," the WSJ writes, "the United Nations and its agencies spend about $12 billion per year." The next-largest charitable foundation, the Ford Foundation, has an endowment less than one-fifth the size. The donation rivals any in history. Andrew Carnegie, one of America's greatest philanthropists, gave away around $7.6 billion in inflation-adjusted dollars, according to the WP.

In addition, according to the Fortune article—and this a detail none of the papers pick up on, so far as TP can see—Buffett's agreement with Gates specifies that after two years, during which the foundation will "resize its operations," it will then be required to "to annually spend the dollar amount of his contributions as well as those it is already making from its existing assets." As TP understands it, that means if Buffett gives the foundation $1.5 billion (as he will this year), it will have to dole out $1.5 billion. That is roughly the amount UNICEF spent in 2004.

In other words: Grant writers, start your engines. While the donation was generally applauded in the world of public health, where the Gates Foundation is a huge player, there is some worry about concentrating so much spending power in one organization. No one mentions—as a recent Financial Times profile of Gates did (registration required, but it's posted various other places online)—that there are some concerns about whether the foundation is distributing its already enormous resources wisely. There is a lot of touching detail about the relationship between Buffett, 75, and Gates, 50. The NYT says the two "have become extremely close business associates and confidants since they met in 1991," traveling together, advising one another, and "regularly playing online bridge games."

In addition to the WSJ, the LAT also gives prominent play to the amnesty proposal for Iraqi insurgents. Everyone else stuffs the story. The plan is "deliberately vague," the paper says, and it seems destined to disappoint both the militants it is aimed at, who see it as insufficient, and members of the U.S. Congress, who immediately attacked it as too forgiving.

Descriptions of attack in Israel sound like something out of an action movie: The militants dug a tunnel about 300 yards into Israeli territory over the course of "many weeks, if not months" and then mounted a well-planned series of attacks on soldiers, killing two. Then they fled back to Gaza, taking a wounded soldier with them as a hostage. The attack came in apparent response to a series of Israeli strikes against targets in Gaza, some of which have killed innocent civilians. Hamas played a role in the attack, though it is unclear whether leaders of the group's political wing, which controls the Palestinian Authority's parliament, were in the loop.

The WP's lead story suggests that Karzai is rapidly losing his grip on Afghanistan. Since he won a landslide election victory in 2004, "public confidence in his leadership has soured with reports of highway police robbing travelers, government jobs sold to the highest bidder, drug traffic booming and aid money vanishing." The Taliban insurgency seems to be gaining momentum. All interesting developments, widely reported elsewhere. A criticism: Much of the criticism of Karzai in the story seems to be coming from that hoary foreign correspondent's staple, the anonymous diplomat. The story quotes representatives of "several European governments": a "European official," a "Western diplomat," and "one foreign military official in Kabul."  Which European governments? What are their motives? It's impossible to know. The reporter's encounters with actual Afghans seem to be limited to a single visit to a Kabul tailor shop.

The NYT has a wonderful feature about the immigration debate, focusing on a battle between a self-anointed anti-immigration crusader on Long Island and his neighbors across the street, who were renting an illegal basement apartment to a Mexican family. What sets this story apart is the depth of the reporting—the writer, Nina Bernstein, clearly took some time to get to know these people—and the writing, which manages to make all the characters understandable, if not necessarily sympathetic. Read it.

The WSJ has an interesting piece highlighting the rise of Vietnam's reformist finance minister, who is likely to be the country's next prime minister. Nguyen Tan Dung, a business-friendly type, would likely speed the country's drift away from communism.

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