By Todd Cohen
In becoming the world’s second-richest individual after Bill Gates, Warren Buffett counted on investors trusting his expertise in managing money.
Now, he is giving most of his fortune to the Bill & Melinda Gates Foundation because he trusts its expertise in giving money away.
Buffett’s $31 billion gift, the largest ever, will more than double the assets of what already is by far the world’s biggest foundation.
The gift should show donors of any means that charity is about impact, not ego.
Instead of creating a foundation bearing his name, or transmitting “dynastic wealth” to his children, Buffett simply wanted his money to make a difference.
Sadly, ego and influence drive much of American philanthropy.
Dominating the charitable marketplace are foundations and donors addicted to the power their wealth gives them, and deluded with the idea that wealth plus power equal wisdom.
Charities can help donors think differently.
Whether they deliver services or make grants, a critical challenge for charities is to show they can use donors’ dollars to effectively address urgent social problems and their causes.
By improving their services, operations, accountability, collaboration and policy work, and emphasizing their impact, charities can help donors see their true value.
Todd Cohen is the Editor and Publisher of the Philanthropy Journal.