Grace: Peter Buffett thinks charitable giving can do better - Omaha.com
Published Monday, August 5, 2013 at 12:30 am / Updated at 3:20 pm
Grace: Peter Buffett thinks charitable giving can do better

Here's what happens when your last name is Buffett and you criticize charitable giving by the super-rich on the op-ed pages of the New York Times.

Your Twitter feed, which you never really cared about before, explodes. An avalanche of email hits. The blogosphere reacts with people praising you for exposing the unintended consequences of the wealthy giving to causes they may not understand and with people criticizing you for making it sound like giving to charity is pointless and self-serving.

“I wanted to start a conversation,” Peter Buffett explains to me a few days after the Times published his essay, titled “The Charitable-Industrial Complex.”

Did he ever.

The 55-year-old winner of a regional Emmy Award and resident of upstate New York is the youngest of Warren Buffett's three children. Like siblings Howard of Decatur, Ill., and Susie of Omaha, Peter uses a nonprofit foundation to funnel tens of millions of dollars from his father each year to worthy causes.

The Howard G. Buffett Foundation focuses on improving agricultural techniques in poor countries and conflict mitigation in war-torn places in Africa. Susie Buffett's Sherwood Foundation keeps most of the money local and geared to early childhood education and other supports for low-income Omahans. Peter Buffett's NoVo foundation prioritizes projects that help girls and women by promoting anti-violence and education efforts around the globe.

The Buffett children long have been involved in charitable giving, following the example of their 83-year-old father, who, after he dies, will have given 99 percent of his Berkshire Hathaway earnings to charity. Mainly Warren Buffett will have done this through the Gates Foundation, which has agreed to spend it within 50 years of Bill and Melinda Gates' deaths. Warren Buffett has also donated generously to the foundations of Buffett's three children and late wife, Susan.

Peter Buffett

Buffett began making major donations to the foundations in 2006 — averaging about $64 million a year to each of his children's nonprofits. Last year he doubled the number of Berkshire shares donated to these foundations, which meant $140 million to each of his children's foundations this year.

With nearly double the funds to give away, Peter Buffett took a hard look at NoVo's work and asked his wife, Jennifer, who runs it, whether they were taking the right approach to philanthropy.

The philanthropy milieu they were exposed to — tireless workers in the trenches, a bureaucracy of competing nonprofits and the corporatization of charity — raised questions for him.

Was charity really helping alleviate human suffering? Or could it have the unintended consequence of deepening turmoil?

Could charitable dollars be holding back the poor who might otherwise rise against oppressive governments and other systems?

Was this even the right strategy as income imbalance continues? A left hand contributing to problems that the right hand tries to solve by dribbling out crumbs?

Here Buffett stands in the middle, with hundreds of millions to give away. Suddenly, everyone is his friend.

“I joke about the fact that, gee, with a billion dollars, you're better looking, you're funnier, you're invited everywhere,” Peter says. “My dad wasn't really off the business pages until the last decade, at most. People didn't really know who he was. People really did think I was related to Jimmy Buffett.”

But he's been feeling the weight of that gift. His father, the “Oracle of Omaha,” didn't give his children much charity investment advice.

“My dad in particular has this wonderful way of saying 'I trust you. Do what you want,' ” Peter says. “It makes you want to be more careful. When someone gives you freedom — 'Oh, my God! I've got to really pay attention.' ”

So Peter Buffett did pay attention. He dived into philanthropy, trying to learn as much as he could about the best way to help women and girls in poor countries.

And after seven years, he saw what he calls a “charitable-­industrial complex” whose effectiveness he doubts.

In his op-ed, published July 26, Buffett said:

» There exists a “philanthropic colonialism” that tries to fix problems “with little regard for culture, geography or social norms.”

» In the past decade, nonprofits have grown faster than business and government sectors, creating a philanthropy economy that's not exactly putting itself out of business.

» The very system that contributes to poverty and suffering tries to alleviate it with what Buffett terms “conscience laundering.”

“But this just keeps the existing structure of inequality in place,” he wrote. “The rich sleep better at night while others get just enough to keep the pot from boiling over.”

Buffett wrote that he and Jennifer don't have the answers but are willing to listen. He called for a new charitable “operating system.”

Buffett said he's heard mostly praise. Critics say Buffett too quickly writes off the good being done through philanthropy. They say that while charities do need to be accountable to donors, some have a good track record of helping the people they intended to help.

“There are thousands of worthy charities that don't need reinvention, don't need a new model, don't need an entirely new mindset,” Forbes.com contributor Tom Watson wrote. “What they need is more capital, to serve more people, with the successful models they have.”

I called Peter Buffett to ask if I should stop sending my piddling checks to Teach for America and other causes I try to support. He said no — that the intent of his essay wasn't to stop charitable giving.

“I'm never going to say there shouldn't be a bed in a domestic shelter,” he said, “or an amount of food NOT going to feed the hungry.”

His own journey, from a raised-in-Dundee-attended-public-schools childhood to now being steward to some $100 million a year, has presented a number of learning experiences.

For instance, a Clinton Global Initiatives symposium in 2005 made him aware of the importance of helping girls in war-torn countries. He then began helping a girls sewing program in Liberia. But after visiting, he realized Liberia didn't need girls who were trained as tailors.

“What Liberia needs is electricians and plumbers. We shifted focus,” he said. “You can't assume anything.”

That trip to Liberia and another trip to Bangladesh were eye-opening.

“You won't know if you don't go,” he said. “That was my little rallying cry.”

He thought of the inanity of funding rural teachers when there were no roads for teachers to travel on.

“You start to see the problems behind the problems behind the problems,” he said. “We thought we would learn about the things we were doing. Then we learned why the things we were doing (weren't working).”

He and Jennifer are still learning. But the latest conference was so frustrating, Buffett said, he returned to New York and wrote a song. That wasn't enough, so he wrote the op-ed.

He does believe a lot of good people are trying hard: “I think everyone is doing their best.”

But take Haiti, which still has not recovered from the devastating 2010 earthquake. This despite billions of dollars donated. This despite the attention of three American presidents and the world.

“All you have to do is look around,” Buffett said, “and know our best … needs to be better.”

Contact the writer: Erin Grace

erin.grace@owh.com    |   402-444-1136    |  

Erin is a columnist who tries to find interesting stories and get them into the paper. She's drawn to the idea that everyday life offers something extraordinary.

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