BUFFETT'S BILLIONS AND CHARITY

Many have just completed their year-end charitable giving. Warren Buffett, America’s richest man, did much of his charitable giving earlier this year. $2 billion went to the Bill and Melinda Gates foundation. Millions more went to foundations run by his three sons. Warren Buffett has announced eventually he intends to give most of his fortune to charity. It’s a laudable gesture.

But not so fast, says his son Peter, in a New York Times opinion column (July 27, 2013). Charities often perpetuate the culture of dependency and what Peter Buffett calls the ”perpetual poverty machine.” Charities are big business with $314 billion given in 2012 employing 9.4 million people.

In my opinion, what is needed is imaginative ways for charities to enhance business growth and employment opportunities. Micro-loans to would-be entrepreneurs have proved effective. Stimulus loans to projects for greater employment could be helpful. As some have said, “what we need is not a hand-out, but a helping hand.”

Peter Buffett says for the very rich charitable giving often is “conscience laundering” – “feeling better about accumulating more than any one person could possibly need…by sprinkling a little around”….so as to sleep better at night.

In the meantime, the terrible gap between the very rich and the very poor increases and the middle class diminishes more and more. What is needed is “risk capital” for new ventures that would increase employment and satisfactory work for independent living.

Warren Buffett’s generosity is certainly laudable, but Peter Buffett’s insights are definitely sobering.