We Are Celebrating the Wrong Things

Recently, Inside Philanthropy published an insightful article examining how early investors in Warren Buffett's Berkshire Hathaway are creating a wave of billion-dollar philanthropies as they and their heirs pass away. The rise of this philanthropic legacy is often met with headlines of celebration, but for us, it sparks a deep, contemplative sigh and compels us to wish for three fundamental shifts in what we celebrate. 

First, that we cease to celebrate wealth accumulation in foundations, second that we no longer idolize the people who retain control of these assets and, most importantly, instead of celebrating the interest gained on money invested in extractive practices, imagine the potential impact if those funds had been directed toward making positive change decades ago. We could be recognizing the widespread ripple effects of that initial impact, rather than the profit derived from extraction at the expense of people and the planet.

First, why do we celebrate massive amounts of money in foundations? 

Don't we want that money out in communities? Isn’t that the purpose of the significant charitable tax deductions that motivate many wealth holders to create a foundation in the first place? The sheer size of these endowments—often in the billions—is touted as a triumph of generosity. Yet, these vast sums, by design, sit on the sidelines. They are invested for perpetuity, mandated only to distribute a minimal 5% each year (unless they are given to DAFs which require nothing in exchange for the tax benefit). This model keeps massive pools of capital out of immediate circulation, delaying urgent community investment. 

We must challenge the glorification of capital preservation over immediate, transformative action. The current crises of climate, inequality, and systemic injustice require resources now, not in fifty years. The true measure of a philanthropic legacy should be the speed and depth of its community impact, not the size of its permanent vault. 

Stop and think about the last sentence. How often do we focus on the foundations because of their endowment rather than what they have distributed in any given year? We would love to see a list of the foundations that gave away the highest percentage of their endowment not the ones that grew their pile of money the most.

Many people on The Giving Pledge list are household names lauded for their generosity. But, as of 2025, of the 256 individuals, couples, or families that have signed The Giving Pledge only 9 have fulfilled it by giving away at least half their wealth. Of the $206 billion given by original pledgers, an estimated $164 billion (80 percent) went to private foundations, with another $5 billion likely going to donor-advised funds.

Foundations like Stupski Foundation are fairly well known among admirers in the philanthropy world, but I would be surprised to see them listed on the “most generous” lists that Forbes puts together or if many outside of philanthropy has ever heard of them. Stupski Foundation has given away over $370 million to date to community (not to another foundation or DAF) and will have given away the rest of their assets by 2029. We think that is something more worthy of recognition.

Second, should we put people on a pedestal for simply controlling a large amount of money? 

This concentration of power is destabilizing to our society. Foundations are inherently powerful, unelected institutions that allow a few individuals, unaccountable to the public, to direct significant social capital and shape policy, research, and local initiatives according to their personal vision.

While I won't name names, consider those in foundations who exhibit a degree of self-importance and power-hunger. These individuals speak with perceived authority, often lacking the genuine wisdom that originates from the communities they claim to serve. You know the type: those who draw a line of grant-seeking hopefuls at conferences. They boast about a "rigorous" grantmaking process, yet often distribute smaller, arbitrarily reasoned amounts. They condescendingly critique others in philanthropy, claiming their own approach is "better," but still adhere to the minimum 5% payout. Moreover, the bureaucratic hurdles they impose on non-profits are often pointless.

Yes, good intentions may be present, yet the unchecked influence that comes with controlling billions or millions and millions of dollars is fundamentally destabilizing to a democratic society. It shifts decision-making authority away from collective governance and into the hands of an elite few. 

The narrative of "giving back" masks the reality of "retaining control," and we must be wary of elevating wealth controllers to the status of moral leaders. 

In an article last year, Charlie Munger (Warren Buffett’s right hand man) was praised for being a “role model for philanthropy with strings”. It goes on to say how tightly he controlled not only who got the money but what they did with it and when. When he gave money for buildings to be built, for example, the money came with exact blueprints for how the buildings were to be built including eliminating bedroom windows in student housing because he preferred LED lighting. 

We believe that when a tax subsidy is granted for sharing assets with the broader society, this constitutes a commitment beyond mere personal spending—it becomes philanthropy. While individuals are free to spend their money as they wish, a tax benefit implies a duty to truly serve the public good. Therefore, grantors should partner with the organizations they intend to support, trusting them to determine the most effective use of the funds. It should be in service of people and the planet instead of the donor’s reputation. 

Third, what would the impact be if this money had been put out into the community at the outset rather than given to investors?

The foundations we are celebrating were seeded by fortunes derived from a system that prioritized investor returns. Once they “donate” that capital into a foundation, 95% of it is reinvested back into the same system that prioritizes investor returns. A system that we believe has damaging and even violent results.

Imagine the world we could be building if that same capital—the very billions that became the endowments—had been channeled into community development, livable wages, public infrastructure, and direct wealth redistribution at the time of its creation. The compounding effect of immediate, equitable investment would have addressed poverty and systemic issues from the root, empowering communities to build their own resilience, rather than waiting for philanthropic structures to eventually allocate a small fraction of the gains at the whims of a few in control.

Finally, we lionize false saints. 

Consider a few of these facts on how the money was made.

• Berkshire Hathaway was a major shareholder in Wells Fargo, which faced fines in 2016 for employees opening millions of fraudulent accounts to meet sales targets. While Berkshire eventually sold most of its stake, Buffett was criticized for his initial silence.
• At Salomon Brothers, an investment banking firm in which Berkshire held a 12% interest, a rogue trader violated U.S. Treasury rules in 1990. Buffett temporarily took over management and intervened with the U.S. Treasury to prevent a ban on the firm from bidding on government bond auctions.
• General Reinsurance, a Berkshire subsidiary, was charged in 2006 for cooperating on a "finite reinsurance" transaction with AIG that allegedly served as an accounting gimmick. General Re paid fines and settled the charges. 
• Clayton Homes and its lending arm, Vanderbilt Mortgage, Berkshire subsidiaries involved in manufactured housing, have faced allegations of pushing predatory loans on minority and low-income borrowers.
• An early investment by Berkshire Hathaway in Chinese electric vehicle maker BYD faced criticism for alleged design theft.
• Berkshire's significant investments in oil and gas companies like Chevron and ConocoPhillips have drawn criticism from ESG investors due to concerns about climate change and environmental impact. 
• In the 1970s, the SEC investigated Berkshire's acquisition of Wesco Financial via Blue Chip Stamps, resulting in a consent decree and a payout to Wesco shareholders.
• Berkshire ended a program allowing shareholders to designate corporate charitable contributions after some directed funds to pro-choice organizations, leading to negative public relations and boycotts from conservative groups against certain Berkshire businesses. 

So with an article that focused on “all of the good that they did with Berkshire Hathaway” how can we ignore the years of harmful practices that created that wealth? Sit with that for a minute. Societally Buffet and by extension Munger are praised as philanthropists but much of their wealth was stolen from the very people that they now get praise for helping.

Seriously. Stop for a moment and think about it. 

Let’s redefine legacy. 

Ultimately, this trend invites us to redefine what truly constitutes a "legacy." Is it the establishment of multi-billion dollar, long-lasting institutions that retain power and capital? Or is it the radical, immediate redistribution of wealth that empowers people, dismantles systemic barriers, and invests fully and fearlessly in a more equitable world? We believe the answer is clear.

As the author of the Inside Philanthropy article, Michael Kavate said, “Even better would be a system under which (investments are less extractive) is not voluntary, but mandatory. There would, in that case, be less need for philanthropy. You can see that in some northern European countries, even if some real problems persist. By contrast, this story aimed to alert those nonprofits stuck in this place and this moment to the existence of a massive new fund. I'd rather that wasn't the system, but here we are.” 

Here we are, indeed.