Philanthropy Buffett's way a good investment
The world's second-richest person, Warren Buffett, has set a benchmark for philanthropy by deciding to give most of his wealth to the charitable foundation set up by his even wealthier friend, Bill Gates. Few gestures could be as selfless, and Hong Kong's 74,000 US dollar millionaires should consider following Mr Buffett's approach when they feel they are ready to help the communities that made them wealthy.
Mr Buffett is an unusual businessman; he has always had a disciplined low-risk approach to investment and insisted that the companies he deals with have the highest integrity. He has bucked the trend of the corporate world by earning a modest US$100,000 a year as chairman of his company, Berkshire Hathaway.
Despite having a fortune estimated at US$44 billion, he has maintained an unpretentious lifestyle, dressing in off-the-peg suits and living in the same house in the quiet mid-western US city of Omaha that he bought in 1958 for US$31,500. Unlike some of Hong Kong's flamboyant wealthy citizens, he does not have seven-figure entertainment expenses, attend high-society gala balls or get whisked from meeting to meeting in a chauffeur-driven limousine.
Instead, Mr Buffett lives in the same manner he makes his investments - wisely. There should perhaps be little surprise, then, that when it comes to making a philanthropic gesture, he has also thought carefully about where to put his money.
There again, he has bucked trends. Rather than setting up his own charitable foundation and building schools or hospitals adorned with his name, he has turned to the Bill and Melinda Gates Foundation. The charity established by the Microsoft Corporation co-founder and chairman and his wife in 2000 had, Mr Buffett reasoned, a proven global track record in helping to eradicate diseases and alleviate poverty. Setting up yet another foundation when there was one already doing work he agreed with would be wasteful, was his logic.
Like Mr Gates, he also determined that most of his fortune should go to charity rather than his children: getting money without having to do anything for it would do them more harm than good.
Chinese have a strong philanthropic tradition. In Hong Kong, the Po Leung Kuk and Tung Wah Group of Hospitals have for decades been running schools and hospitals. Generations of our wealthiest citizens have had no qualms about putting back into our city money that they reaped from it. The fruits of their generosity is everywhere - in the names of university buildings, hospitals, clinics, schools and sporting grounds, among the thousands of charitable ventures.
In every corner of the city there are such memorials to one of our biggest benefactors, Sir Siu-kin Tang, who died in 1988. His philosophy was simple: 'Make money in Hong Kong, give money in Hong Kong.' The same guideline has for years been followed by our wealthiest resident, Li Ka-shing, who last year donated $1 billion to the University of Hong Kong's medical faculty. Movie mogul Sir Run Run Shaw has similarly given away billions of dollars and in 2002 established the Shaw Prize for Scientists, an international award for the fields of astronomy, mathematics and life and medical science.
But our wealthy citizens also have a habit of putting their wealth towards less worthy causes; too often it is frittered away on glitz and glamour. Nonetheless, the right culture for giving exists here and there is no reason to doubt that the wealthiest will continue to help.
There is, however, a lesson to be learned from Bill and Melinda Gates. They have brought to seemingly intractable problems of poverty the same hard-headed, corporate approach they brought to business. That has meant a real focus on accountability, efficiency and bottom-line results.
These are attributes which Hong Kong's wealthy philanthropists would do well to follow when considering how best to contribute to a better society.