One of the highlights of the business calendar is Warren Buffett’s annual letter to shareholders of his company, Berkshire Hathaway. This is always beautifully written, full of the great investor’s wisdom and wit. There are usually some funny quotes from unlikely sources, as well as a few examples of how the world is going wrong and why he thinks his investments are likely to pay off. A recent favourite was his comment, as things started to go wrong in the economy, that “it is only when the tide goes out that you find out who was swimming naked”. As it turned out, swimming trunks were the exception to the skinny-dipping rule.
Buffett has long been urging his old friend and partner in giving, Bill Gates, to write a similar annual letter – and as Matthew reported in today’s Economist, the First Epistle of St Bill will be published imminently. (A video of the conversation between Matthew and Gates can be viewed here.)
In this first letter, Gates plays it relatively safe, saying there will be no jokes or quotes “from Mae West”, and he focuses largely on the work of his own foundation. Hopefully in future years, he will range more broadly and channel some of the spirit of Andrew Carnegie, a tycoon-philanthropist who never minced his words.
The highlights of this first letter include the fact that the Bill & Melinda Gates Foundation is increasing its giving this year – despite an economic downturn that Gates thinks may last for several years – from $3.3 billion last year to $3.8 billion in 2009. This will represent 7% of the foundation’s assets (which shrank by around 20% last year due to the financial crisis), which will hopefully inspire other foundation’s to consider going above the statutory minimum in America of 5% a year, rather than cut back their giving at a time when it may be needed more than ever.
Equally impressive is his belief that real progress is being made – and will continue to be made – on improving the health of the poor and raising the quality of America’s schools. Equally, he is clear that his goals are challenging, and mistakes will be made – and one of the main reasons for writing the letter is to engage as wide a community as possible in helping the foundation to get it right.
Hopefully, the letter will catch on like Buffett’s. If so, perhaps Gates will also consider hosting an annual conference similar to Buffett’s company annual meeting, generally an upbeat affair that has been nicknamed “Woodstock for Capitalists”. Bring on Woodstock for Philanthrocapitalists!