Recently, Forbes held its 4th Annual Forbes 400 Summit on Philanthropy in New York. This summit gathers some of the most powerful and wealthy people in the world today. These industry heavyweights assemble in order to have critical conversations regarding how to best utilize their resources to combat some of today’s most pressing issues. This event includes ceremonial recognition for those that have proven themselves to be innovative and committed to philanthropic causes.Business magnateWarren Buffett shared his unique perspective on philanthropy both with Forbes Magazine editor Randall Lane and during his speech this year.
Mr. Buffett presented the Lifetime Achievement Award in Philanthropy to Bill and Melinda Gates for their continued dedication to improving the lives of others. In discussing the tireless efforts of the recipients, Mr. Buffett also shared some of his own thoughts on how to approach philanthropy with the audience. Although Buffett felt comfortable drawing certain parallels between leading a company and overseeing a not-for-profit or a charity organization, he also addressed the significant differences.
His points highlighted the dangers of always applying a corporate mindset to a philanthropic cause.
The first point that Buffett made, was the importance of delegation and hiring. He talked about how in business he has a manager responsible for a $4 billion dollar business to whom he rarely speaks. However, Buffett trusts him to do the job and subsequently provides that manager with the space necessary to do it. That’s not to say that Buffett is completely disconnected from that business. He discussed the delicate balance of being able to delegate while still staying informed. To delegate well, Buffett identified what tasks are non-essential for him to perform personally and figuring out who is not only capable, but determining who he trusts will do the job. If any of those aspects are missing from this person, it’s likely that the delegation would be short-lived.
The way that Buffett’s vision for philanthropy truly differs from his thoughts on business has to do with the projected timeline. Buffett states that he has no way of knowing what issues will be most pressing in the future. However, he can clearly evaluate what societal ills exist now. With that in mind, he is much more focused on the present when it comes to giving. Leading by example, Buffett donates a significant portion of his wealth to philanthropic causes encouraging short-term spending. When making business decisions, Buffett considers the future health of his business even after he is no longer there to oversee it. Buffett suggests that while planning is a key component in contributing sizable donations to philanthropic causes, there is a sense of immediacy that’s absent in the case of strategizing on behalf of an enduring company. And finally, Buffett suggest that other potential philanthropists reconsider or even abandon their current metrics for success. He suggests that being so focused on numbers won’t accurately reflect the “rate of success” of a charity. Instead, he acknowledges that some causes may need time to establish quantifiable “success”, if it ever happens at all.
The big takeaway from the most generous man today, is that while not-for-profit organizations should take hints from their for-profit counterparts on the executive side, philanthropy is a whole other beast.