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Photo courtesy: Susie Buffett

The World's Greatest Philanthropists

Four hearts and a beautiful mind
Warren and Susan Buffett brought up their children with a commitment to share their fortune with the less fortunate

N Mahalakshmi

From L-R: Howard Graham Buffett, Susan Thompson Buffett, Warren Buffett, Susie Buffett and Peter Buffett

If you happen to speak with him without knowing who he is and where he comes from, you could easily mistake him for someone close to the Dalai Lama. You would think he is someone who has probably spent much of his life as a hermit in the Himalayas, where it did not matter how much money you have and you live on fruits and vegetables grown in your backyard. The kind of place where you are neither fearful of anything nor threatened by anyone.

That’s the kind of place he speaks of: a beautiful, fair world. Not the world we live in — obsessed with money and material pursuits; where economic progress trumps human progress every time; where wi-fi on every street corner takes precedence over feeding the homeless and hungry who wander those very streets; where fear — of being left behind, of being attacked, of losing out — rules hearts and suspicion stalks minds. That’s the impression you get when you speak with Peter Buffett, the youngest son of Warren Buffett.

Peter’s op-ed piece in The New York Times in July 2013 created quite a stir, to put it mildly. Actually, it enraged people in the development sector — and the world of business. Essentially, he wrote that the rise in philanthropy is nothing but “conscience-laundering”; economic progress is not real progress; and traditional philanthropies are engaging in “philanthropic colonialism”. 

His bigger grouse: the obsession and chase for more money is spiralling out of control; and the fundamental motive of how we can make money out of something drives us to the lowest common denominator instead of the highest and best purpose. “Money is creating misery for so many people — it does not have to be that way if the distribution mechanism were right. We often say at our foundation, let’s put money out of its misery,” he says now. Peter does not claim to know the answers, but he seeks a better system. “I don’t have to be an expert tailor to say the emperor has no clothes.”

An Emmy Award-winning musician, Peter and his wife Jennifer manage the $1 billion his father, Warren Buffett, has entrusted him with to pursue his philanthropic endeavours. His NoVo Foundation works globally on women’s issues, including sex trafficking. And the fair world that Peter talks about is not the result of proximity to the Dalai Lama but his mother, Susan, and to one of the most successful financial investors and the richest men in the world, Warren. “We grew up in the middle of the civil rights era. As a kid, the place where I saw my parents meet most passionately was in that area of humanity and fairness. Both my parents were very strongly charged up about equal rights, fairness and all of humanity having a voice,” says Peter. “You can feel good in a room or you can feel tense. The feeling I got at home was solidarity around fairness and justice. It was an unspoken feeling.”

It’s not just Peter. His older siblings, Susie and Howard, harbour similar feelings. Howard would like corporations to take their social responsibility seriously — we have a responsibility towards future generations and companies need to weave that into their strategy. “American Indians used to have what they called the seventh generation decision-making, where they would sit down and calculate the cost benefits for seven generations, or what impact the decision will have far down the road, 80 years from now. Imagine how policies would be if we thought like that,” he says. 

Susie calls for fellow citizens to be more responsible and sensitive to local community needs, asking them to start their giving early, however small it may be. In doing that, she’s drawing inspiration from her parents. Warren and Susan had a scholarship fund that initially gave out just three scholarships a year, but eventually awarded 3,000.

An early start

When Warren was still in his 20s, he and Susan decided they would give away their wealth to charity once their needs were met. In 1964, they founded the Buffett Foundation (renamed Susan Thompson Buffett Foundation after her death in 2004) to support abortion and birth control pills. The foundation is now run by Allen Greenberg, Susie’s ex-husband. Warren had always believed his wife would outlive him and would run the foundation. Two years after she died, he decided to give away the bulk of his wealth to the Bill & Melinda Gates Foundation, with a relatively small portion to each of his three children and the Susan Thompson Buffett Foundation.

When he made the announcement, Warren’s fortune was estimated at $44 billion; of this he decided to bequeath 83% to the Gates’ foundation and $1 billion each to his children. “At Christmas time in 1999, our parents told us they were setting up a foundation for all three of us. At that time, it was $30 million. That was a big deal for us. In 2006, when my dad said he was going to put in an additional billion into the foundation and again when he said a year ago that he was going to double the amount to the foundation, those were big moments,” says Howard.

His children have no qualms about the bulk of the money going away to the Gates Foundation, nor that they have not been left vast sums in their father’s will. Indeed, when the three were told about the $1 billion infusion into each of their foundations, they were thinking less about what they could have got and more about what they would do with what they had been given.

“If my father had asked, ‘should I give that $1 billion to you or to your foundation’, I would have said to the foundation. What would you do with a billion dollars if you were not to give it away?” Howard asks. “We are hugely fortunate. It would be wrong for us not to try and make things better for a lot of other people,” adds Susie.

Besides, inheriting their father’s will was never on the agenda. The Buffett children have never been given anything gratuitously. As a young man, when Howard wanted to buy a farm, his father agreed to lend him the money, but with a set of strings attached.

“You have to give me the cash flow and I have to make at least 5%,” Howard recalls Warren saying. “That was tough. I got thrown out talking to some farmers about it. It took me two years to buy. But that was a real learning for me — if you stick with something long enough, you will probably get it. Also, if you get emotionally attached to something, you lose all your negotiating power,” says Howard. Susie had it even tougher. When she wanted to renovate the kitchen, she was simply told to go to a bank, borrow the money and get it done like anyone else would do. 

But then, they weren’t brought up like typical rich kids. Lots of love, care, understanding and encouragement, yes, but wallets stuffed with wads of cash and fast cars, no. Like other children in their neighbourhood in Omaha, and their mother and grandfather before them, the three Buffett children went to the local public school (Susie’s children, too, attended the same school) and studied English from the same teacher who taught their mother. Their grandparents lived close by; they had friends in the neighbourhood and a home with room for everyone — literally and figuratively — but it was nothing fancy.

It was an upbringing like the American TV shows of the 1950s and 1960s. Mom was a homemaker, Dad would come home every day at 5.30 pm, enter through the garage shouting, “I’m home”, and they’d sit down to dinner together. “It was only when I was much older, and heard stories of others’ home life, that I realised that this was probably the most valuable thing my parents could have given us. My childhood memories are of being loved and cared for,” says Peter. Speaking of his work against human trafficking, he adds, “When I sit down with a young girl who has no feeling of safety, it resonates so deeply in me that this is wrong, this is bad.”

There was also no pressure from the parents regarding the career choices the younger Buffetts made — they were encouraged to pursue what they wanted and if they were good at something, there were no rules. “If a child is presented with a whole bunch of rules, you want to test or break them. You want to see if it is true that you will be punished. But if you aren’t presented with rules, you feel compelled to live up to the expectations that you can do it, you can figure it out. It was a complete reversal of what most parents think,” says Peter. None of the three were academically inclined but they each found their passion and mustered the courage to pursue those passions and make a living independent of their father’s money.

Howard and Peter recall the umpteen instances when Warren and Susan encouraged what they did. “What I always remember about my parents, especially my dad, was their enthusiasm in showing up for something I did,” says Peter. Whether it was talent shows in junior high or Peter’s concerts later on, Warren ensured he made it to the show. Peter recalls being told that when he was performing an American Indian show in Washington, Warren was delayed in traffic: Buffett senior simply got out of the car and jogged to the venue. “It always felt like it mattered to him to be there. My friends who have been in the audience tell me he is fully attentive, connected and excited. But that is not to say that he gets [the music],” laughs Peter. “I know that and it’s okay. He will be there because he is a proud parent and wants to show his support.”

Through their growing years, even as Warren was making his mark pursuing his passion, it wasn’t finance and investing the kids were picking up from their father. “At the dinner table, I would never be thinking about how do I become an investment genius or how do I make loads of money like my dad, but how do I say something so funny, so quickly,” says Peter, adding that his wife and the staff at NoVo Foundation will vouch for his one-liners. 

Howard, too, takes the fun part seriously. “One of my best learning from my dad is to see the funny side of things,” he says. Asked about Warren’s remarkable clarity of thought on just about any subject, from investing to philanthropy, he quips, “He needs more clarity on his will,” before bursting into loud, infectious laughter sitting in the 10x10 work space at his farm in Tekamah, Nebraska. Howard is unaffected by money or comfort: he asks his son, Howard Warren Buffett, to pick up an egg wrap from a nearby restaurant on his way to the farm, as he wants to spend the day planting corn. 

Howard currently lives and works on another farm in Decatur, Illinois, where he farms when he is not in Africa. He is a keen wildlife photographer — he grimaces at my Nikon D700: “Does that work,” he asks, mischievously — but has spent more time in the poorest and conflict-stricken countries in Africa than on safaris. His time at present is divided between farming and active philanthropy but some time in the future, Howard knows that he will have to shift focus: he is set to succeed Warren as the non-executive chairman at Berkshire Hathaway. 

Not that he’s concerned. “I don’t do anything differently in my life because of some future thing that could happen. It would be a mistake to do that. My dad doesn’t treat it that way either. Between now and then, all I need is to ensure that if I spent a little less time on my foundation, I have the process and the people in place that do what needs to be done.” Howard has no background in finance but, at that level, Warren was looking for someone who would preserve the culture and ethos at Berkshire. And that’s something Howard has in his genes. 

Howard attributes a lot to his mother, referring to her as his “best friend”. Sister Susie, the eldest of the three siblings, doesn’t find that odd. “Howard did have a very special relationship with her. But ask anyone here in Omaha, not just my family, and they will say Susan was their best friend too,” she says. That was because Susan could genuinely relate to people from all walks of life and believed, “you can’t deal with real people and stay judgmental”.

Like all little girls, Susie grew up admiring her mother and watching her diverse group of friends from all over the community as she kept herself busy in helping the less privileged. She recalls seeing her mother sort through scholarship applications on the kitchen table.

“I was probably less than 10 years old and I don’t think we talked about giving as much as we watched it happen. My mother was really involved in the community. My dad didn’t have that much money then, so it was more about giving her time and energy,” Susie remembers. 

And the community appreciated Susan Buffett’s efforts. “There was a playground being built by Girls Incorporated here in Omaha, which is one of the non-profits I support and my dad is quite supporting of them too.

The day she died, a few hours after the word got out, the ladies out there started bringing food — featherbones and mac and cheese — over to the workers, telling them to bring it to my family. My mother had been so respected and loved in the community that it was a real loss for the people,” says Susie. Being the only one of the siblings still based out of Omaha, she feels strongly about doing good for the local communities in the city that her mother was so attached to.

That’s not to say she — or her brothers, for that matter — is reaching for low-hanging fruit. Warren gave all four recipients of his wealth — his children and Bill Gates — the same advice: don’t go for the easy targets, take on the really tough tasks, take risks and expect to make mistakes. Gates has already embarked on a tough road, choosing to eradicate multiple diseases; now he is taking on even more challenging projects, such as sanitation.

The Buffett siblings, too, have chosen the paths less taken. Howard works on improving livelihoods in the toughest regions across Africa and the Americas; Peter looks at women’s issues and sex trafficking; and Susie, apart from helping local communities in Omaha, is involved with early education in the US.

Funding communities

One of the first things visitors to the Sherwood Foundation office in Omaha see is a small sign bearing a quote from Thomas Edison: ‘There are no rules here. We are trying to accomplish something’. If you wanted evidence that a Buffett is at work here, well, you got it in those two simple sentences. The walls are covered with colourful work: Howard’s beautiful, sometimes heartbreaking, photographs from around the world, as well as several examples of the more amusing thank-you notes from public school children who have benefited from enrichment opportunities provided by the foundation. If you are lucky, you may be greeted by Duncan, Allen Greenberg’s fluffy white Bichon Frise, who is a frequent visitor to the office and has been known to gobble up an unguarded lunch or two.

Greenberg, Susie’s ex-husband, and she are housed in the same office. He runs the Susan Thompson Buffett Foundation, which deals with women’s health issues around the world and is the largest of the Buffett charitable entity with assets of some $4 billion.

Susie is the chairman of this foundation as well as two others: the Sherwood Foundation, her Nebraska-oriented charity devoted to public education and poverty alleviation, which hands out $50 million a year; and the Buffett Early Childhood Fund, focused on early childhood education for low-income families, which Sherwood funds directly. Susie is counted among the most powerful philanthropists in the US, also serving on several national non-profit boards, including Girls Incorporated and the Bono-led, Africa-focused foundation, One.

Sherwood Foundation, which she runs, focuses on four key areas — urban community partnerships where the foundation gives grants to organisations that work on family stability and child well-being; strengthening public schools in Omaha; rural community partnerships, where the idea is to build local capacities to address issues in rural areas outside the Omaha and Lincoln metro areas; and early childhood education through the Buffett Early Childhood Fund (which is run by Jessie Rasmussen). 

Early education is a subject very close to Susie’s heart. It’s the most under-invested area in education and she wants to correct that. “Education is the way we, as a nation, attempt to level the playing field for children and families. But here is the problem: too many children arrive at kindergarten already behind. What’s worse, far too many children keep falling further behind — and never catch up.”

She says the achievement gap is actually an “opportunity gap” rooted in the very early years. “Investing in the early years — beginning at birth and even before, and focusing first on those children and families who face the greatest risks — is a responsible way to shift the odds. So, more children will grow up eager to learn, ready for school and inspired with hope,” she adds. 

If children come into kindergarten prepared, they have a better chance of succeeding. As of now, some 700,000 children are born into poverty in the US every year and from birth to age five, they don’t have the opportunity to learn. “So if we could get those kids ready with a high-quality programme before they enter school, obviously it changes their life but it also changes the school system because you have a whole bunch of kids who are ready to learn and that paints a different picture in the long term.

That, to me, is probably the single most exciting thing.” Apart from working with school districts in Omaha, the Sherwood Foundation also works on foster care, juvenile justice and teen pregnancy issues. It funds several players and programmes that work in this field, including Educare initiative, which runs a network of preschool programmes for low-income children; Save the Children, which engages in home visits; the federal Early Head Start Program; and Nebraska’s Sixpence Early Learning Fund. 

Harvesting change

Howard works across Africa and the Americas on three main areas — food security; water security, and conflict mitigation and post-conflict development. His approach is not to simply run individual programmes but provide catalytic capital that seeds sustainable, transformational change. “Foundations have to provide risk capital and be catalytic because, at the end of the day, it is either going to be the private sector or the government that has to take it over. Even in what we are working on — water, food, conflict — there is huge public investment involved. The problems are way beyond our ability to solve. But they are not beyond our ability to influence from time to time in certain places. That remains our focus,” he says. 

Being a farmer himself, his foundation’s food security initiatives focus on agricultural resource development for small farmers. Howard G Buffett Foundation supports a range of interventions, from research on improved inputs and practices to advocacy, to promote the best ideas that will have the broadest impact on the most vulnerable and under-resourced communities. In water security, the focus is on resource management chiefly to support agriculture. And then there is conflict mitigation.

“Conflict and hunger are inextricably linked: conflict breeds hunger and hunger fuels conflict. We, therefore, invest in conflict and post-conflict countries to bring an end to conflict; to improve the conditions that fuel conflict; or to develop communities that have been devastated by it,” reads the foundation website. 

Giving voice

In end-April, at the joint conference of the National People’s Action Network and the National Domestic Workers Alliance, Peter was addressing a big audience consisting of domestic workers, health care workers and migrant workers, all of whom looked very different from him. And he said, “I believe we are witnessing the death spiral of white male privilege.”

Because that statement didn’t come from a person like them, it had a huge effect on the audience that was cheering him. “It is amazing what happens when they hear something like that — they feel really emboldened,” says Peter now. At NoVo Foundation, he strives passionately to raise the voices of disenfranchised people, whether it is adolescent girls or marginalised workers. “There are millions of people who have not had a voice in their own life, their own possibilities. We want to create conditions for a more balanced world.” 

When he listens to someone’s story, whether it is a young girl sold into slavery or an older worker who does backbreaking labour in the fields, he is overwhelmed, Peter concedes. “On one of my visits to India, I was talking to a young girl from Kolkata who had been trafficked and then taken out of the Sonagachi district there. There is no better instance of understanding the resilience of the human spirit. She was probably 15 years old. She told me her story and any of us would relate to it as a terrible, horrific circumstance. But her eyes were lit up. ‘I have a future now,’ she said. ‘I am excited about the possibilities’.” NoVo Foundation works on creating those possibilities through its various programmes and partners.

The new legacy

While Susie, Howard and Peter, with their large monies, and Brand Buffett have the collective ability to influence how philanthropists can effectively solve the world’s toughest problems, they are also voicing their disenchantment with the prevailing system. Traditional foundations are bogged down by bureaucracies and the process of grant-making, where evaluations take precedence over actually ensuring you find ways to crack the problem, not camouflage it. Not surprisingly, they have failed to address pressing issues, says Howard.

“Otherwise, we would not have a billion people hungry still.” At the heart of the problem is that traditional foundations’ approach is one of thrusting western ideologies and what works in the west on countries across the globe. “Traditional projects are driven by western thinking. You bring in outside resources, outside thinking and outside people and try things that don’t work for them. They don’t have the same resources, the same infrastructure: even the culture is different. Our western thinking is at such conflict with cultures around the world that it does not help address problems.” 

Worse still, foundations go with preconceived ideas based on preconceived notions far removed from reality. “People go on safaris to South Africa and come back telling you they have solutions for the water problems in Africa. It’s not so simple.” In the end, it’s about being there, seeing for yourself, being closely engaged and then coming up with the best solutions. “Howard is over there digging dirt with the people from the village and listening to them. That is unusual,” says Susie. 

Peter could not agree more. He gives his experience in Liberia as an example. Usually, foundations either work in conflict areas during the conflict with disaster relief programmes etc., or step in after there is some stabilisation. NoVo wanted to move in a little before peace was established and create livelihoods for young girls. Job training such as tailoring and sewing were thought of, which sounded great.

But when Peter and Jennifer went to Liberia, they found that both the government and private contractors needed people who could do plumbing, drywall, electrical work and things connected to the rebuilding of the neighbourhoods and the communities. That made NoVo realise what the girls needed to learn was plumbing and electrical work, not tailoring. It sounds very simple but often foundations make fundamental mistakes based on limited knowledge. “You make assumptions based on your own experiences. That’s wrong. It does not work,” says Peter, adding that his career in music has taught him an invaluable lesson that helps with his philanthropic work.

When he started off as a composer, clients would drop in in the morning and say they wanted the commercial written by afternoon. Peter says he wouldn’t have a clue but would draw on something to come up with a solution. “Creativity, when faced with the unknown but being confident that an answer would come, has been part of my life for so long that when I get into the world of philanthropy and people say, ‘I don’t know’, that’s okay. Let’s figure it out together,” he says. “There is always a solution there that we can’t see yet.” 

The process to get to that solution is very different from how you approach business, which is through quarterly evaluations, cost-benefit analysis and precise return ratios. In the end, it’s all about loving what you do, not about extending esoteric business concepts to philanthropy, which is what it is becoming with so many “professionals” entering the fray. “My dad and I do exactly the same thing — we do what we love,” says Peter, who insists that his musical genes are not just from his mother, who was a professional singer, but also from Warren, who used to constantly sing and whistle around the house.

The second problem with philanthropy today — and actually, the bigger one — is the power dynamic between those signing the grants and the grantees, something Peter calls “philanthropic colonialism”. Rather than building partnerships based on honesty and trust — the classic Buffett model — there is a tendency, says Peter, to push things under the carpet for fear of losing future grants. 

“I once asked my doctor a question about some pill and he said, ‘Tell me what you want the study to say and I will find a study that says it.’ I think that happens too much in general in philanthropy. It’s damaging,” says Susie. “What I see is overarching intent and missing that intent,” adds Peter. That’s because what’s not working is exactly what you need to know, so you can figure out how to change it. “My dad always told us that if you are not making mistakes, you are not doing anything. It is interesting to get that point across to the grantees and the staff. That is one of the most exciting things about working here. Nobody is afraid that if the thing doesn’t work, they are going to get into trouble,” he adds. Susie and Peter have “nothing to add”, in true Charlie Munger style.

To get to that point of no fear, grantees need to know that they are in it together with the folks with the fat wallets. That calls for altering the power dynamic between the givers and the recipients. “The guiding principle at our foundation is to try our best to dissolve the power dynamic that happens when you have money,” says Peter. “For me, it is not much different from what my dad has done in all the companies he has bought. In Berkshire, you look at every one of those people running the businesses and it is because he believes in them. He believes in the people who build it and want to sell it. It is always about people. Susie has nothing to add,” says Howard.

“Forget my dad’s money”

In the end, what Susie, Howard and Peter are driving home is the true legacy they inherited from their parents. “Integrity and honesty was the foundation of our growing up. We were extremely lucky to have those people as parents. Forget my dad’s money. That has nothing to do with any of it. They are just two extraordinary people,” says Susie.

And then, there is empathy. You either have it or you don’t. “When we were working with the native Americans, we were so sensitive to exploitation, domination and control and how one culture can completely subsume and potentially try to obliterate another’s way of life. With that kind of sensitivity, you sort of start to see it everywhere. It is very hard to remove yourself. You can’t unsee that,” says a clearly-distressed Peter.

Peter still yearns for a better world, a blissful world. As a musician, he’s no stranger to bliss — that moment when there are no boundaries, when you feel at one with the universe. “I get that through music. I can also experience that feeling while sitting by the creek that is bordering my farm, while playing a piece of music where suddenly the boundaries dissolve. You feel that the earth is — to use a musical term — in harmony, and you are in harmony with everything around you in that moment.” He would wish that the young girl from Kolkata — and everyone else who doesn’t have a voice in this world — could experience it along with him. 

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