On June 21, 2022, Warren Buffett announced he was donating $4 billion in Berkshire Hathaway stock to the Bill & Melinda Gates Foundation and four family charities — his son’s Howard G. Buffett Foundation, son Peter’s NoVo Foundation, daughter Susie’s Sherwood Foundation, and the Susan Thompson Buffett Foundation. STBF is named for his first wife, who passed away in 2004, and is the No. 1 provider of private funding in the U.S. to protect abortion rights.
The philanthrosphere greeted the news with something of a yawn. After all, Buffett had been methodically donating stock to the same five recipients since 2006. He also stuck to the script by providing a bulk of the donated shares — roughly 63% — to the Gates Foundation. The real twist came on June 22 when a Wall Street Journal piece floated the possibility that the bulk of Buffett’s remaining fortune would not go to the Gates Foundation as originally intended, but instead to the STBF, which would allow it to dramatically expand its formidable footprint in the reproductive health space. The article, which came about a month after Politico leaked Justice Samuel Alito’s draft opinion of the Supreme Court’s intention to overturn Roe v. Wade, sent nonprofits scrambling and commentators into full-blown speculation mode.
While Buffett did indeed go on to move hundreds of millions in additional cash to the family-run foundations in the following months, amid the immediate aftermath of the court’s Dobbs decision, another $3.5 billion infusion to the Gates Foundation signaled that the donor wasn’t turning his back on his preferred beneficiary anytime soon. And yet, a combination of factors — the Journal article, the heightened urgency around abortion rights, and changes underway at Gates — have stirred up lingering uncertainty about the future of Buffett philanthropy.
However it plays out, a key figure in how the fortune will be spent is Susie Buffett, who serves as the STBF’s board chair and runs her own Sherwood Foundation, which already moves roughly a quarter-billion dollars out the door annually. An uptick in funding for either vehicle could significantly elevate the role of Buffett’s notoriously publicity-shy oldest child. (IP reached out for comment, but did not hear back.) Regardless of whether or not Warren Buffett ultimately changes course, I figured it was a good time to dive into Susie’s backstory and take a closer look, in particular, at her own Omaha-based charitable vehicle, perhaps a lesser-known Buffett family philanthropy.
“There is no need for you to build large reserves”
Born in Omaha in 1953, Susan Alice Buffett attended the University of Nebraska-Lincoln with a degree in education and majored in social ecology at the University of California, Irvine. She worked as a teacher in inner-city schools in Omaha and started getting involved in the family’s charitable activities in the 1980s. Susie also chairs the Buffett Early Childhood Fund and sits on the boards of a variety of national and local nonprofits. Her father began funding his children’s foundations in 1999.
Susie’s was originally called the Susan A. Buffett Foundation (SAB) before changing its name to the Sherwood Foundation. Latest filings show seven paid employees at Sherwood — Susie and six directors responsible for areas like finance, research and education. From what I could gather, Susie appears to take a hands-on role as chair at the foundation.
Sherwood is not to be confused with the Susan Thompson Buffett Foundation, run by Susie’s former husband, lawyer Allen Greenberg. Latest tax filings show Greenberg as president, Susie Buffett as board chair, and several family members including Peter Buffett sitting on the board. While fairly opaque in its operations and seeking to maintain a role as an anonymous donor, it is well known that STBF is a top funder of abortion rights in the United States. Susie, no doubt, is an integral player here.
Those who follow Buffett know that Wall Street treats the “Oracle of Omaha’s” annual letters to shareholders as holy scripture. It turns out we can also learn a lot by scrutinizing the letters he penned to his children and the Gateses when he pledged Berkshire-Hathaway stock to their foundations. In an open letter to Susie dated June 26, 2006, Buffett imparted “a couple of thoughts (but not directives),” such as “focus the new funds and your energy on a relatively few activities in which SAB can make an important difference.” “Conversely,” he wrote, “avoid making small contributions to the multitude of worthwhile activities that have many possible funders and that would likely proceed without your help.”
Warren also described the mechanics of a pay-as-you-go model that undergirds many private foundations led by living mega donors. “SAB does not necessarily need to spend each annual inflow in the year in which it is received,” he wrote. “You can build up resources while you gain experience and develop longrange goals. But, since you will be receiving gifts annually, there is no need for you to build large reserves.”
In 2021, Susie, who is a Berkshire Hathaway shareholder, joined the company’s board, where she now serves alongside Howard, whom insiders expect will succeed his father as chair. Susie has two children and has yet to sign the Giving Pledge.
A refreshingly (mostly) “open door” living donor foundation
The Sherwood Foundation’s mission is to promote “equity through social justice initiatives enhancing the quality of life in Nebraska.” It supports nonprofits that “predominantly benefit those that are serving Nebraska” and address one of four categories — Urban Community Partnerships, Omaha Public Schools, Early Childhood Education and Greater Nebraska Initiatives, which focuses on issues like child welfare, immigrant inclusion and housing.
The Sherwood Foundation provides operating (flexible funding), program and capital grants, and accepts applications on its website, albeit with a few caveats, such as the requirement that “grantees must be an active and dues-paying member of the Nonprofit Association of the Midlands.”
This almost-open-door policy is rare among foundations controlled by living donors. In May, my colleague Sue-Lynn Moses and I took a deep dive into Candid data pertaining to these kinds of giving vehicles. Buffett’s four affiliated foundations were among the top 10 foundations that disbursed the most funding between 2017-2019, with the Sherwood Foundation clocking in at No. 10 with $568 million. It is the only foundation that solicits applications on its site.
On the other hand, like most of those funders, the Sherwood Foundation does not have a grants database, so I decided to comb through its 990s to get a handle on where the money has flowed.
It awarded approximately 500 grants in 2020 and 650 in 2021, and a closer look at its grantee list suggests that it could have been cribbed from an appropriator’s desk in the state capitol. The foundation awarded tens of millions of dollars to public schools, colleges, neighborhood revitalization projects, and early childhood, afterschool and college readiness programs. Roughly 60% of all grants in 2020 and 2021 were earmarked as operating grants.
Big grants in 2021 flowed to the University of Nebraska Foundation ($25 million), the Women’s Fund of Omaha ($6 million) and the Omaha Community Foundation ($5 million). In what was a geographic outlier, San Francisco’s Common Sense Media received a $5 million program grant for its Child Tax Credit Project.
The “pay-as-you-go” model in action
The foundation’s incoming contributions, which came in the form of Warren’s Berkshire Hathaway stock, totaled $192 million, $155 million and $223 million in 2019, 2020 and 2021, respectively. Meanwhile, disbursements for charitable expenses increased 23% between 2019 and 2021, from $237 million to $293 million.
All the while, the foundation’s fair market value of all assets at the end of the year decreased 41%, from $341 million in 2019 to $200 million in 2021. In short, the board took Warren’s advice in his 2006 letter to heart — since it would be receiving annual contributions, they opted against building what he called “large reserves.”
It’s at this point that I’m obligated to mention that Peter Buffett’s NoVo Foundation, which had been a critical funder of organizations supporting women and girls, backed out of multi-year funding and laid off staff members in 2020, at least in part due to its pay-as-you-go model. In a May 2020 Medium post, Peter wrote, “because NoVo’s resources are not coming out of a corpus but instead a pledge of stock, what we’re able to accomplish in any given year is based entirely on market fluctuations.”
Looking back on the NoVo saga, which resulted in Peter and his wife Jennifer redirecting their attention on community projects in Kingston, New York, where they live, my colleague Philip Rojc called it “the main hiccup in an otherwise uniform narrative of expanding Buffett family giving.” It also serves as a cautionary tale for organizations disproportionately reliant on funders adhering to the pay-as-you-go model.
“Reasonable expectations” (and speculations)
Two factors make me doubtful we’ll see another NoVo-like meltdown in Buffett’s inner charitable circle anytime soon. The first is Berkshire Hathaway’s share price, which has a tendency to keep going up.
Buffett’s spend-down plan stipulates that the number of contributed shares will decrease by 5% annually, but as he explained in his 2006 letter to Bill and Melinda Gates, “you can reasonably expect the value of Berkshire shares to increase, in an irregular manner, by an amount that more than compensates for the decline in the number of shares that will be distributed.”
The math corroborates his assertion. In 2021, Buffett donated 810,756 shares totaling $232 million to the Sherwood Foundation. Last month, he donated “only” 733,333 shares, but thanks to an increase in Berkshire Hathaway’s share price, the donation totaled $248 million — an 11% increase over 2021.
The second factor, of course, is if Buffett — who, even after this month’s mega donation, still owns $112.5 billion (!) in Berkshire-Hathaway shares — ultimately increases funding to the STBF, which disbursed $505 million for the fiscal year ending December 201, and perhaps even his other family foundations.
When attempting to read the tea leaves, it’s important to remember that Warren’s original plan was to entrust his wife Susan to give away all his money, but she died in 2004. Warren allegedly didn’t believe his kids could handle so much money, so he turned to Gates, whose philanthropic star was on the rise. That was in 2006.
Things look a lot different now. Buffett has gone on the record saying he’s “delighted” with how his delegated giving strategy has played out. As for the intended primary recipient of his largesse, in May, a conservative advocacy group made a quixotic call to have Buffett removed as Berkshire Hathaway chair, claiming his ties with Gates and his “woke” foundation put investors at risk. While the revolt didn’t stop Buffett from donating $4 billion in stock to the foundation the following month, it underscored the risk of hitching one’s charitable wagon to a donor that turns out to be quasi-toxic. It’s completely plausible to think that a 92-year-old Buffett would consider these optics as it pertains to his life’s work.
The most obvious variable in his calculus moving forward is reproductive rights at a time when most abortions are banned in 14 states. “While Mr. Buffett hasn’t revealed publicly how his estate will be divided,” last year’s Journal piece read, “the amount left to the Buffett family foundation [STBF] could be as high as $70 billion to $100 billion.”
All of which brings me back to the chair of the STBF and Sherwood Foundation. In 2018, Susie gave a rare interview with Penta’s Ellis Henican, who described her as “about as low-key as a major philanthropist can be.” When Henican asked Susie about her father’s decision to give most of his fortune to the Gates Foundation, she said, “It wasn’t a surprise. He told us in advance. And to be honest, I don’t think I’d want the burden of giving that much away.”
What if her father’s post-Roe stock donation, a rare occurrence in which funds went mostly to STBF and not to Gates, was a harbinger of things to come? If the answer is yes, then Susie’s burden may greatly increase.
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