Letters #127-129: Warren Buffett, Bill Gates, and Chuck Feeney (2014/2015/2011)
CEO of Berkshire Hathaway, Founder & CEO of Microsoft, and Founder of DFS & General Atlantic | Warren and Bill tributes to Chuck + Chuck's Giving Pledge letter
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Earlier this week, Chuck Feeney passed away. He was a hero to many for building up, and then giving away, a massive fortune (~$8bn). And he did so anonymously, until he was essentially forced to out himself after the sale of his company to LVMH. He was admired by many, include Laurene Powell Jobs, John Arnold, and Sandy Weil, but particularly by Warren Buffett and Bill Gates whom he inspired to create The Giving Pledge.
Today’s letter is a first — three letters in one! But when you’re the hero of both one of the greatest investors of all time and one of the greatest entrepreneurs of all time, you deserve it.
Today’s letters are 1) a transcript of Warren Buffett’s tribute speech to Chuck Feeney for his Forbes 400 Lifetime Achievement award, 2) the text of Bill Gate’s introduction to the book Laying Foundations for Change: Capital Investments of The Atlantic Philanthropies, a book commissioned by The Atlantic Philanthropies to share the impact they’ve been able to create, and 3) Chuck Feeney’s letter for The Giving Pledge, the charitable campaign started by Warren Buffett and Bill Gates who had been inspired by Chuck in the first place. In fact, in 2012, Bill Gates sent Forbes a tip, saying something along the lines of: “You guys should take a look at Chuck Feeney; he’s been a huge influence on how Warren and I think about philanthropy.”
Warren Buffett is the CEO of Berkshire Hathaway and widely considered to be the greatest investor ever and Bill Gates is the founder and former CEO of Microsoft and one of the most impactful entrepreneurs ever.
Chuck Feeney was both of their heroes. He built up a fortune through his founding of the company Duty Free Shoppers Group (DFS Group), which started with Chuck and his college classmate, Robert Miller, selling duty-free liquor to American servicemen in Asia which later expanded to cars and tobacco. They started in Hong Kong, expanded to Europe, then the other continents. By the mid-1990s, DFS was distributing profits of up to $300 million a year to Feeney, Miller, and two smaller partners, and by the end of the decade, it had been acquired by LVMH and Bernard Arnault for $2.47bn in cash (for 59% of the company - a valuation of $4bn).
But unbeknownst to anyone, in the 1980s, Chuck had quietly spun up The Atlantic Philanthropies and transferred his entire stake to the entity (at the time, he owned 38.75%, which was worth ~$500mn). He had also founded General Atlantic to fund the Philanthropy’s growth, preserving and growing its capital base.
Everything was so secretive that even Chuck’s partners didn’t know he no longer personally owned any part of DFS. Additionally, when Atlantic gave away money, they required recipients not disclose the source of their donations. The Philanthropy also had an investment arm, General Atlantic, which invested in companies like Facebook, Priceline, E-Trade, Alibaba, and Legent. Today, it’s a standalone growth equity firm.
All in all, Chuck made, and gave away, ~$8bn. In 2020, it was revealed that he had successfully given away 99%+ of his net worth, and dissolved the Atlantic Philanthropies, leaving <$2mn for himself as he lived in an apartment in San Francisco.
Related Resources
Berkshire Hathaway
LVMH
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Warren’s Letter
I'd like to thank Steve Forbes for putting on a marvelous day for us here, and last evening as well. Forbes has really taken the ball with this and gone with it. It's wonderful what you've done, Steve, and I tell you, when Steve calls you and says, Warren, I'd like you to come back and present the award to Chuck, a) I was delighted, but I don't know whether you know how powerful Steve is. I mean, when Steve... you jump when he says something like that.
There was that occasion back in the 1990s, if you remember, when, during the Clinton administration, when Betty Currie came into President Clinton in tears, and she was normally quite composed. The President said, Betty, what's wrong? I mean, I've never seen you like this. She said, Mr. President, I've done something terrible.
The President said, No, it can't be that bad, Betty, just tell me what it is. She said, Well, some months ago, I scheduled two people to be here at the same time. I forgot about it. And now they're both sitting outside.
Clinton said, Oh, worse things than that have happened in the oval office. He said, Who are they? And Betty said, Well, it's the Pope and Steve Forbes.
And at that, Clinton got a worried look on his face. He said, That is bad, Betty. He said, Show the Pope in first, I only have to kiss his ring.
So Steve called. I'm here. And I'm really glad I'm here. Because it's just a wonderful chance to talk about my hero. Chuck has set an example not only for all the people of my age and younger generations around now, he will be an example 100 years from now, or 200 years from now.
When we first got the idea of--I was talking with Bill and Melinda Gates, we got the idea of getting some people together to talk about philanthropy. We called David Rockefeller, and asked if he would send out the invitation, and we only invited about a dozen people. But Chuck Feeney was the first name on the list. And he remains the first name on the list. It's remarkable, what he's done.
He looks at money as something that can do something for other people. I mean, when you get right down to it, it's that simple. He has what he needs himself, and money that no utility to him, but other people might think would be, he has done, the billions and billions of dollars touched millions of lives. And so it's a real honor to be able to talk about a fellow that--my hero, he's Bill Gates' hero, he's Melinda's hero... he should be everybody's hero. And of course, he did it all anonymously until he was finally outed. Now he's in the company of a man here who outs lots of people, Steve Forbes, so you're looking at the ultimate outer here.
But, Chuck has one other characteristic--we're both about the same age, and he's my only serious competition in terms of being frugal. I think it was Chuck that told me that if you're taking a special guest to McDonald's, that you drive through the drive-in area in reverse, so that when you get to the cashier's window, that your guest is the one that's stuck with the bill.
Tonight--it's nice to know little tricks like that--tonight, I'm going to present him with this lifetime achievement award, which no one deserves--not only no one deserves it more than he does, nobody deserves it as much as he does. But I also thought, I really want to have a personal gift for Chuck. So I thought, I want to give him my most treasured possession. He never pays more than $15 for a watch. But if you buy a $15 watch these days, every year or two you have to go out and buy a battery. So the maintenance kills you on these things. But I have a $3 watch here. It's a Timex, you wind it, there's no expense for batteries. So I want to give Chuck a watch he's going to even appreciate more than the one he's wearing, and I'm going to give him this lifetime achievement award, which nobody deserves like Chuck Feeney. Thank you.
Bill’s Letter
Chuck Feeney is a hero. He probably wouldn’t like that characterization very much. But his modest manner and thoughtful embrace of philanthropy make him a figure that everyone can learn from. I certainly have.
In the early 1970s, Chuck read Andrew Carnegie’s essay on wealth, which said surplus wealth should provide “ladders upon which the aspiring can rise.” Not only did he become a convert, but he became one of the great philanthropists of our age, just as Mr. Carnegie had done in his.
In the early 1980s, Chuck and his family began to sell most of his immensely successful businesses and to focus on smart and compassionate investments around the world in health, education, and peace and reconciliation, among other fields.
Chuck made a living by building things, but his passion is cultivating opportunity. As he noted at our first meeting of the Giving Pledge, “Good buildings for good minds can make the difference in the lives of a lot of people.”
Chuck is unassuming, and initially he was most comfortable with giving anonymously. But his decision to become public with his giving has transformed philanthropy and most certainly inspired many others to get involved. Chuck’s longstanding commitment to Giving While Living has been a guidepost for Melinda and me. Chuck has been a beacon to us for many years; he was living the Giving Pledge long before we launched it.
By quiet example, Chuck has been an icon of global philanthropy, and he has changed the philanthropic landscape. He is the consummate builder and giver. Chuck reminds us all of the importance of living our lives in service to others.
Chuck’s Letter
February 3, 2011
Dear Bill,
I greatly appreciated the recent opportunity you provided to update me on the successes and challenges of the Giving Pledge, and to allow me to share my own related thoughts and experience. As you know, shortly after the announcement of the Giving Pledge in June 2010, which followed our meeting at the first exploratory gathering in May 2009, I made an initial decision to withhold participation. Because I had already transferred virtually all of my personal and family assets to The Atlantic Foundation (the precursor to The Atlantic Philanthropies) over 25 years ago, I did not think it appropriate to be among the early signatories of this undertaking. Nevertheless, I have been carefully following the Giving Pledge initiative and am heartened by the great response. Though I cannot pledge that which I already have given—The Atlantic Philanthropies have made over $5.5 billion in grants since inception—I want now to publicly add my enthusiastic support for this effort and celebrate this great accomplishment.
I also want now to add my own personal challenge and encouragement for Giving Pledge donors to fully engage in sustained philanthropic efforts during their lifetimes. I cannot think of a more personally rewarding and appropriate use of wealth than to give while one is living—to personally devote oneself to meaningful efforts to improve the human condition. More importantly, today’s needs are so great and varied that intelligent philanthropic support and positive interventions can have greater value and impact today than if they are delayed when the needs are greater. I urge those who are taking up the Giving Pledge example to invest substantially in philanthropic causes soon and not postpone their giving or personal engagement.
On now approaching my 80th birthday, I am content with my action, in 1982, to establish The Atlantic Foundation. I am convinced this was a sensible means for directing to good purpose a large and increasing wealth that exceeded my and my family’s lifetime needs and which I believe would have become problematic. Reflection on the many worthwhile undertakings that these funds have since made possible always reaffirms for me the prudence of this decision. The process of—and, most importantly, the results from—granting this wealth to good causes has been a rich source of joy and satisfaction for me and for my family. Beginning with little more than a few nascent ideas, the experience of having made a few sizable donations, and a passionate interest in assisting those whose life circumstances or experience resulted in deficit or vulnerability, I have been fortunate that many others with a wide range of backgrounds and expertise have been willing to participate in and enhance this grant making endeavor over many years.
Our efforts were organized somewhat loosely at first, consistent with my preferred working style and our needs, but over time as the volume of activities expanded, the work was arranged in a more formal organization. Over the course of this journey, and alongside others who contributed enormously, I learned and came to appreciate the challenges and complexities of philanthropy. And, together, much good work has been done. I think often of, and I am truly grateful to, the many people who have contributed in so many ways to the work of The Atlantic Philanthropies over the years.
While my approach to philanthropy has surely developed and matured through experience, fundamental guides for me have always been the same methods of working and values that served me well in my business career. Key among these, I believe, is the dynamism, vigilance and informed risk taking inherent in entrepreneurial work, together with priority on good relationships and personal engagement. In business, as in philanthropy, I have always sought an independent, strategic edge where potential is often greatest, as well as opportunities that I can understand and to which perhaps I can contribute personally.
A lot is expected from us in philanthropic endeavors—and not all good initiatives will be met with universal positive acclaim—but this challenge should not divert each of us from making philanthropic investments in what we thoughtfully believe to be the highest and best use of our resources. The challenges, even set backs, I have experienced in my decades of personal engagement in philanthropy pale in comparison to the impact and deep personal satisfaction we have realized.
As I indicated at our recent meeting, I don’t pretend to have the answers to the many challenges facing those who choose to contribute their wealth to philanthropic activities. But I do have almost 30 years of personal and institutional experience engaging with the wide range of philanthropic issues and choices, and I would like to contribute this experience to the Giving Pledge effort.
Fundamental to all philanthropic efforts are choices about grant making focus and strategy, which naturally are strongly influenced by one’s passions and interests, as well as one’s perception of how best to achieve good value and lasting impact with the intended grant funds. This typically is a frequently-revisited process as one learns and gains perspective from experience and granting opportunities evolve. Another key element is the myriad decisions associated with how to conduct grant making, such as the nature, size and cost of support staff and operations. Critically, one must also navigate the complexities inherent in establishing an appropriate governance and long-term leadership structure to carry out one’s philanthropic intentions. This incorporates many aspects, such as whether or not to institutionalize a set of guiding principles; the size, role and scope of authority of an outside board, if any; the involvement of children and other family members; and the participation and function of outside advisors—and the approach decided upon must stand the test of time.
Thoughtful and effective philanthropy requires that the above issues, and more, be addressed with the same acumen, creativity and tenacity that many of us learned and applied in our business careers. Philanthropy, though, also brings with it a different set of complexities, attractions and distractions. I welcomed our initial discussions on these important issues and hope to have the opportunity to follow up on them with you and others.
My deepest thanks to you, Melinda and Warren for leading this transformative effort—and, again, congratulations on this historic achievement.
With best regards,
Charles F. Feeney
Wrap-up
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