The ovarian lottery

When my mother, Susan Thompson Buffett, did the first, last, and only television interview of her entire life with PBS’s Charlie Rose in 2004, she had recently recovered from oral cancer. Some who saw the interview noticed her slight speech impediment and thought that perhaps she had suffered a stroke, but that was not it. She had made great strides in learning to speak again after her surgeries, but it was still a struggle.

Fortunately, it did not undermine her sharp but never unkind sense of humour. She was talking about my father and some of the dynamics of their relationship, and she said with her mischievous smile: “I thought I’d marry somebody like a minister or doctor — somebody who would do some valuable service for human beings.Marrying somebody who makes piles of money is sort of the antithesis of what I thought I’d do. But I know what he is. There is no finer human being than who he is… so I overlooked the money.” My mother passed away later that year from a cerebral hemorrhage. She and my father were visiting friends in Wyoming. They were together when she died. Our friend the great rockstar Bono of U2 sang at her funeral. And for a woman who “overlooked the money,” Forbes magazine listed her as the 153rd richest person in the world in 2004. Her Berkshire Hathaway stock stake was worth around $3 billion. 

Our family’s involvement with philanthropy has been a great source of curiosity to reporters and others for a long time. My dad said famously that he would never consider giving his children the bulk of money, and people would sometimes talk about this statement as if this hinted at a rift between us. That was never the case. He had seen children of other successful executives develop an attitude of entitlement that he did not want in his children. He is practical. Just as when he made me present a plan that would yield him a profit on the farmland he offered to purchase, he always wants the numbers to add up.

My mother, meanwhile, had a lifelong interest in empowering people and especially in helping all children reach their potential. She loved hosting exchange students from exotic places, but she also worked with low-income children in Omaha. She was appalled and offended by any kind of discrimination. She had a bumper sticker on her car that read “Nice people come in all colours”. To her shock, someone scratched out “all colours” and wrote “white” over it.

In large part due to my mother’s interest and inspiration, my brother and sister and I began our first efforts in philanthropy in the late 1980s. My parents brought us together, and my dad said he was starting a family foundation. Each of us would get to determine where $100,000 a year should be donated. It was aimed primarily at giving opportunities locally: everything from the Nebraska Game and Parks Commission to the Big Brothers Big Sisters of America to the Chicago Awareness Head Start Programme. I dubbed it the Sherwood Foundation, as an allusion to Robin Hood and his merry men distributing the money they took from the rich.

I think each of us ended up appreciating the low-key introduction, which was enough money to help these organizations without tempting us to get ahead of our own ability to analyse and make sound philanthropic investments. Soon we each wanted to do more. In 1999, my parents decided that it was time for us to start working with larger amounts of money to have an impact in the philanthropic areas we chose. Soon after, Susie, Peter, and I each received roughly $26.5 million to launch our individual foundations. It was during this period that I made some initial forays into wildlife conservation, and not long after that we purchased a large fenced parcel of land in the Limpopo region of South Africa to set up a cheetah habitat and research centre called Jubatus.

Around this period I had my epiphany about how I was never going to make a significant difference in wildlife conservation if I wasn’t willing to make a difference in lives of people who were starving. My mother and I travelled in Africa together in 2002, and she and I talked frequently about philanthropy. I think she was happy with the impact that my travels and photography were having on my larger sense of responsibility to contribute to
the world. 

A cancer diagnosis came as a shock in 2003, and we rallied around her. As she said to Charlie Rose, she was putting a little more heat on my dad to free up more of his wealth for philanthropic causes. My mother had her own shares of Berkshire Hathaway, and in January 2004 she made her second gift to all three of our foundations: this time, shares valued at $51.4 million. I can’t imagine a more loving gesture. My mother had seemed to make a good recovery from the cancer, and so her sudden death in 2004 rocked us all. We all knew the world had lost a real force. But she had found yet another way to inspire us to do good in the world. She made provisions in her will for our foundations, and her estate gifted $51.6 million each to Susie’s, Peter’s, and my foundations in 2005.

My father was devastated by my mother’s death — she was his best friend and partner in life. As many accounts have noted, he was so distraught that he could not bring himself to attend her funeral. We all felt a little more alone, but my father felt it deeply. I think he had always enjoyed the thought of being able to give my mother significant funds to make a difference in the world. He always thought she would outlive him. What would happen now?

Well, I think he sat down and looked at the numbers. Giving away money is a complicated business, as I appreciate more and more all the time. I have met so many decent, optimistic, generous people who want to make a difference, but they become disillusioned with the difficulty of finding the right fit for their philanthropic interests. Almost by definition, the causes that need the support most often do not have the infrastructure, management talent, or strategic plan needed to deploy large amounts of capital efficiently. It’s tempting to pick projects that are straightforward and “doable”. There is nothing diabolical about that. The problem is that those kinds of projects are one-offs. The gains may not be sustainable, and the impact tends to be local or limited. Meanwhile, there are some global organizations that do good work, but they have grown to a size that limits their ability to innovate, and administrative costs and approaches seem to produce fewer and fewer returns. 

I think my father looked around at the philanthropic sector and, without my mother to take the lead, understood that he needed an organisational structure capable of handling a gift at this scale. That shrank the universe, and he realized that the existing foundation with the broadest and most robust structure for handling a large gift was the Bill and Melinda Gates Foundation. At this point, in 2006, it was already managing $29 billion and employed more than two hundred people. The foundation was going after global challenges where it hoped to have a broad impact. That mission appealed
to him. 

However, he also liked what Peter, Susie, and I were doing, and he decided on a generous course of philanthropic investing with us as well: his commitment to Gates was worth about $31 billion at the time. As with the Gates commitment, his gifts to us were based on the conditions that we would personally be alive and active in our foundations and that we followed certain legal requirements such that his gifts were charitable. He pledged the equivalent of more than $1 billion to each of our foundations to be distributed over many years. This decision was a dramatic change in the scope and resources available to us, and it has fuelled our exciting journey. As a gift to the three of us on his eighty-second birthday in August 2012, he announced he was going to double his commitment. To me, perhaps the most inspirational element of this experience has been my dad’s expressed wish that we tackle the hardest problems. Unlike many NGOs, we are not dependent on demonstrating “success” to our benefactors during fundraising drives. We can jump into difficult situations and help people who have no other options and no other resource. We also have the luxury to learn from our mistakes and recalibrate. 

As he mentioned in the foreword, my dad has a concept he calls the “ovarian lottery”: the notion that the degree to which you are likely to prosper is determined by the circumstances of your birth. He has described this concept in different ways at different times. He sometimes says, for example, that if you have the choice to be born in Bangladesh and pay no taxes or be born in the United States and pay some taxes, what percentage of your income would you be willing to part with to be born here? He believes that the opportunities available to the person with intelligence, drive, and spirit in the United States are different from what a person with the same profile born into a Chad refugee camp or some remote village in El Salvador, could possibly hope to leverage.

Until fairly late in his life, he left it to my mother to figure out how to have that impact. My mother worked on a lot of community projects when we were young, but in later years, she focused on just a few larger areas. She was a passionate supporter of civil rights, and she advocated for family planning and reproductive rights for women globally. She wanted to work to raise the standard of living for people who found themselves in difficult, often extreme situations. It was about basic freedoms and fairness. 

If you knew my mother, and even if you just watched the Charlie Rose segment, I think you can imagine why my father never worried about what would happen to the bulk of his fortune. As she said, making money has always been a part of the “scorecard” of my father’s life, but he’s pretty indifferent to spending it. He just isn’t interested in the luxury items and displays of wealth that some in his position embrace. He loves the competitive aspect of investing — the idea that he can read the same material as anyone else and figure out a strategy that creates an outstanding return, when many others lack patience and discipline to consider how a market is likely to develop in the short, medium, and long-term. But he knew that my mother had a beautiful, giving spirit and that she was smart and unselfish. He trusted her completely to do good things for the world with his fortune. 

I’m driven to honour my mother’s legacy as well, and it’s one reason why I’m working so hard on my thirty remaining chances. I think of her every day, and I am grateful that she launched us all on such an amazing and important course.