George P. Mitchell was born to Greek immigrants in Galveston, Texas, in 1919 and went to Texas A&M, where he studied petroleum engineering and geology. He graduated as valedictorian, and later started his own oil company. The timing couldn’t have been better. Mitchell’s operation thrived, drilling thousands of wells, as demand for petroleum products surged during the postwar boom.
Mitchell had a keen understanding of the rock and shale formations that lay underground, and in the late 1980s, his company began experimenting with a new process to capture natural gas locked within those formations. They drilled deep into the earth, through the rock, and pumped in water, sand, and chemicals to force out gas. Hydraulic fracturing, as the process became known, took years to perfect but eventually paid off big for Mitchell’s company. He became a billionaire and was known as “the father of fracking.” The Economist would say that “few businesspeople have done as much to change the world as George Mitchell.”
Mitchell had ten children and twenty-three grandchildren and lived to the age of ninety-four. He and his wife, Cynthia, gave away hundreds of millions of dollars over the years, often through a foundation they created in 1978. Much of their giving was quite traditional—mostly staying local, with big money going to the arts in Houston, medical research centers, human services, and education. But Mitchell was also interested in issues of sustainability, unusual for an oil baron, and gave millions for research in this area. His particular concern was how the earth would sustain a growing population with finite resources.
Mitchell signed the Giving Pledge in 2010. And when he died, in 2013, most of his remaining fortune—over $800 million—was bequeathed to the Cynthia and George Mitchell Foundation. By that time, the foundation was run by one of Mitchell’s granddaughters, Katherine Lorenz, who came to lead the family’s grantmaking outfit in 2011, while still in her early thirties.
Lorenz’s background had prepared her well for overseeing millions of dollars in annual giving power. During a good part of her twenties, she lived in Oaxaca, Mexico, where she co-founded a nonprofit working on food and agricultural issues in poor farming communities. Earlier, she had spent two summers living in rural villages in Latin America through the volunteer program Amigos de las Américas. Lorenz had also spent years thinking broadly about philanthropy, starting in 2003, when her family joined the Global Philanthropists Circle, a network of wealthy families from around the world committed to reducing poverty.
Lorenz connected strongly with the founder of that group, Margaret “Peggy” Dulany, David Rockefeller’s daughter, who had co-founded the global anti-poverty group Synergos in 1986. As a Rockefeller, with numerous siblings and other relatives involved with giving, Dulany had long wrestled with big questions about family philanthropy. She had started the Global Philanthropists Circle to help families look beyond traditional forms of giving to be more strategic about making “lasting change in the lives of poor and marginalized people.” It is one of several networks that help mold heirs into more effective philanthropists for social change. (Another such group is Resource Generation, an organization of progressive heirs that “organizes young people with wealth and class privilege in the U.S. to become transformative leaders working towards the equitable distribution of wealth, land and power.” For a time, Lorenz sat on the group’s board.)
Dulany became an inspiration for Lorenz because she, too, had started out living and working in rural communities in poor countries, only to decide over time that she could have more impact through philanthropy. “That path really resonated,” Lorenz told me.
Lorenz was also tired of searching for grants after six years of running a small nonprofit. While she saw herself as someone who liked getting her hands dirty, working close to the ground, she found fundraising to be brutal work. “You have to pitch every foundation differently,” she said. “And you don’t know who to talk to, and who’s making the decision.” Another frustration was the various reporting requirements that funders demanded of grant recipients. “The whole process was just really difficult.” Equally eye-opening to Lorenz, though, were the benefits of having truly supportive funders who acted as partners. Lorenz wished that more foundations could be like that.
Through the Global Philanthropists Circle, Lorenz learned about the Philanthropy Workshop, which offers intensive training to emerging philanthropists. Lorenz went through the workshop in 2007–2008, and it was a major turning point in her life. She realized that she really belonged on the grantmaking side of things, while also working to improve philanthropy as a whole. Meanwhile, Lorenz was becoming more involved in her grandparents’ foundation, which was going through major changes as it evolved into an organization that was collectively run by two generations of George and Cynthia Mitchell’s offspring.
That transition began in 2004, when all ten children and many of the grandchildren came together in an extended strategic planning process designed to chart a new future for the foundation. The process moved at a slow pace, involving retreats and many discussions. Paying close attention to the wishes of George Mitchell, who stayed on the sidelines, the family first hammered out a vision for the foundation that centered on sustainability. Then, in 2005, it agreed on a new governance structure, one that included all family members. And in 2006, it began mapping out specific grantmaking priorities. The first issue area it decided to focus on was clean energy, launching that program in 2008. Next came a program on water management, and then one on fracking and shale.
Lorenz was named president of the foundation in 2011 through a vote of the board. And after her grandfather died in 2013, she oversaw the foundation’s expansion into more issue areas, including land conservation and anti-poverty work in Galveston, where Mitchell had grown up.
Creating new programs at the Mitchell Foundation always involves a similar process. The family comes together for a planning retreat with experts on a particular issue for two to three days. The idea is to engage in intensive learning and then set a vision as a family. Everyone is welcome to weigh in at this stage. “It’s very much an open process where all family members have an equal voice whether they’re board members or not,” Lorenz said.
Once the vision is set, the board and foundation staff work together to translate it into measurable long-term goals, as well as short-term grantmaking strategies.
Today, the George and Cynthia Mitchell Foundation describes itself as working to secure the “long-term human and ecosystem well-being for the planet.” Among other things, this means pushing the conservative state of Texas to embrace clean energy and finding ways to reduce the environmental risks of fracking. Lorenz is well connected in green circles—sitting on the board of the Environmental Defense Fund and the National Academies’ Roundtable of Science and Technology for Sustainability.
As one of the richest men in Texas, and a pioneer in the oil industry, George P. Mitchell wielded one kind of power. Now, leveraging his legacy and wealth, Mitchell’s ambitious granddaughter is on her way to being quite powerful in her own right.
Katherine Lorenz is hardly alone among heirs who have spent their formative years working on social causes and networking widely. This is a way that the next generation can be quite different from the forebears who made the family fortune. Wealth creators are businesspeople, and tend to be more conservative. Heirs grow up in privilege, with the kind of post-materialist worldview that lends itself to progressive concerns about poverty or ecology.
At the same time, next-generation philanthropists are often drawn to a more rigorous approach to giving. They’re less interested in so-called relationship giving, whereby donations flow to alma maters, community institutions, and the causes championed by friends. Like younger donors in tech and elsewhere, next-generation funders are often thinking about impact and breakthroughs. As Lorenz put it once: “This generation will ask for more metrics, and want to know the impact they are having more than previous generations. I think this group will also be open to taking more risks as they search for innovative solutions. In taking more risks, there will be more failure but also potential for more significant social change if the risk pays off.”
With ten children and twenty-three grandchildren, George Mitchell had plenty of descendants to leave his fortune to. That he chose instead to leave the bulk of that money to a foundation is a reminder that great dynastic wealth has never been a very popular idea in America, even among some of the super-rich. Andrew Carnegie famously called for curbing large inheritances through an estate tax, with an eye on recycling this wealth to ensure opportunity for future generations. An estate tax was established in 1916, and has since withstood fierce efforts at repeal.
One reason the estate tax has survived is because it has defenders across the nonprofit sector, who point out that it’s a boon to charitable giving. Faced with the prospect of seeing nearly half their wealth go to the IRS, many rich people choose to instead make large bequests or endow foundations. The estate tax also has powerful friends in the far upper class, most notably Warren Buffett, who once gave Bill Gates a copy of Carnegie’s essay “The Gospel of Wealth.” (To be sure, plenty of America’s rich loathe the estate tax, including a handful of ultra-wealthy families, the Waltons among them, who’ve secretly bankrolled efforts at repeal.)
When the estate tax was battling for its life against a GOP attack in Congress, Buffett helped lead the charge to save it. William Gates Sr. even co-authored a book with Chuck Collins defending the estate tax. Among other things, they wrote: “We share a concern with our nation’s founders that the existence of a powerful economic aristocracy distorts our democracy and negates equality of opportunity…these fears were realized during the Gilded Age of the late 1800s, and the estate tax was part of our country’s remedy.” In a new Gilded Age, went the argument, the estate tax remained a key bulwark against an American aristocracy. A range of other wealthy people have also defended the estate tax, including George Soros and members of the Rockefeller family.
When Bill Gates and Warren Buffett developed the Giving Pledge, making new resources available for social good was the top priority. But another was to promote Carnegie’s vision that great wealth should be recycled to create opportunity and not be used to entrench dynastic power in the United States. As Buffett told Charlie Rose on 60 Minutes: “I don’t really think that, as a society, we want to confer blessings on generation after generation who contribute nothing to society, simply because somebody in the far distant past happened to amass a great sum of wealth.”
As good as all this sounds, a thought that seems not to have crossed the minds of Gates and Buffett is that dynastic power and privilege in America can take different forms—one of which is inheriting the influence that comes with controlling a foundation. In fact, there may be no better way for the super-rich to ensure lasting clout for their heirs than to dedicate their wealth to philanthropy.
If George Mitchell had just divvied up his fortune among his many offspring, you probably wouldn’t be hearing the Mitchell name very often in twenty or fifty years, much less a century from now. Studies show that most inherited family wealth disappears by the third generation. As things stand now, though, the Mitchell family is poised to wield influence for many decades to come through one of the larger private foundations in Texas.
The early tech titan David Packard may be long gone, but today his offspring control a foundation with nearly $7 billion in assets that gives away around $300 million annually. Do Packard’s descendants wield more power in society through this institution than he ever did through Hewlett-Packard? Maybe so. Do they wield more influence than they might have as wealthy private citizens who inherited fortunes? Absolutely.
The examples could go on and on. Many philanthropists stipulate that the foundations they create remain in family control—a setup that can endure for generations. A full century after John Emory Andrus created the Surdna Foundation, its twelve-member board remains controlled by his descendants, including members of the fifth generation. The Nathan Cummings Foundation is a far newer family foundation, endowed by the founder of the food company Sara Lee, and some of its younger board members had barely been born when the family patriarch died in 1985. Yet here they are today, sought after for coffee dates by nonprofit leaders anxious to get grants. While that kind of popularity may not sound like it confers “blessings on generation after generation,” as Buffett described it, whether important people seek you out is a key indication of influence in our society. Even more so, the ability to effect real change with cash grants is a form of hard power.
In contrast to inherited wealth, which typically shrinks over time, philanthropic wealth that is locked in a foundation with conservative payout rates tends to grow—along with the influence heirs can have. Heirs can also have influence when the plan is to give away family wealth on an accelerated timetable, within one generation, as is sometimes the case. Bill and Melinda Gates have stipulated that their foundation will close within 20 years of their deaths. That timetable could place vast grantmaking resources in the hands of their three children.
However it plays out, is inherited power through philanthropy a bad thing? It’s an important question right now, with trillions set to flow across generations in coming decades. Such power feels deeply at odds with America’s egalitarian ideals—and all the more so given the growing scope of this phenomenon. An ever larger number of heirs are coming to populate the philanthrosphere, with many of them taking an activist approach to making change. This class of super-citizens have come to their position through birth, and they can speak in the public square with a volume unimaginable to most people born to ordinary families. The resources at their disposal are swelling at a time when government faces mounting constraints.
Yet even as a new kind of aristocracy emerges, rooted in philanthropic wealth, it’s unlikely to be an enforcer of upper-class privilege. Since heirs tend to be more liberal than the business leaders who create family fortunes. Most famously, a number of fourth-generation Rockefellers became involved in activist causes, starting in the 1960s. The Hunt sisters, mentioned earlier, tapped the wealth of their notoriously conservative father to bankroll liberal groups. There are plenty of similar examples, including from the past few years. When the GOP mega-donor Harold Simmons died in 2013, he left his two daughters in control of the family foundation named after him, which was slated to receive some of his $8 billion fortune. Neither of these women shares their late dad’s worldview, and some foundation grants in recent years have flowed to progressive nonprofits. Rob McKay also grew up in a Republican household, in Southern California, where his father started the Taco Bell chain. McKay has used his inherited wealth to back activist efforts on the left, helping build the Democracy Alliance and supporting work to raise the minimum wage. Other heirs who’ve been involved in the Democracy Alliance since its founding include Rachel Pritzker, Pat Stryker, Jonathan Lewis, Patricia Bauman, Farhad Ebrahimi, and Anne Bartley, Winthrop Rockefeller’s daughter.
Like Katherine Lorenz, Bartley is a great example of someone born to wealth who’s spent her entire career in the social sector, going back to the late 1960s. Which is another point about heirs: many have prepared well to be philanthropists, readying themselves to one day command major resources. And the ones who’ve prepared most carefully are keenly aware of the limits of their power. They know that their funds are modest relative to the size of the problems they’re tackling and that the odds tend to be long in terms of achieving real change. They’re not waving the checkbook around in a hubristic way. Rather, they’re committing to the long slog of grantmaking year after year in pursuit of gains that may never actually materialize, or be modest at best if they do.
Many of these heirs aren’t spinning when they speak of their involvement in family philanthropy using terms like “responsibility” and “service.” Sitting through hours of board meetings and planning sessions, or making site visits and reviewing grant proposals, is not everyone’s idea of fun. There are a lot of other ways the youthful rich can amuse themselves with fancy toys and exotic travel. Plenty of heirs make exactly such choices, leading private lives of extreme luxury. Yet a growing number are more like Katherine Lorenz or Farhad Ebrahimi, who inherited part of a tech fortune at a young age and started his own foundation. These people are aware of the power that comes with their privilege and want to “leverage it in the best way possible,” as Ebrahimi has said.
Ebrahimi told me that inheriting a big pile of money was confusing and more difficult than one might imagine. “I was intimidated. I didn’t know how to think about it. I didn’t know how I wanted to think about it.” Over time, he came to believe that this kind of large private wealth transfer—and the vast inequality that made it possible—was simply wrong. “In my opinion nobody should be given this kind of financial resource,” he said. And so, as Ebrahimi set out as a philanthropist, he sought to use his wealth to move society “further and further away from the world we live in right now, where there are very large consolidated piles of capital where small numbers of people decide what will happen to it.”
In the 1970s, an earlier generation of progressive heirs who turned to philanthropy, such as George Pillsbury—whose family was made rich from food products—had thought along similar lines. “I felt it was not my money,” Pillsbury said, of his trust fund, seeing it as wealth that should rightly have gone to workers but instead had been “skimmed off.” Oscar Meyer heir Chuck Collins was so uncomfortable with his trust fund that he gave the money away to progressive foundations when he was twenty-six.
Ebrahimi grew up in an affluent neighborhood of Denver, where his father was CEO of Quark, the software firm that Tim Gill started. His parents, originally from Iran, talked about global politics around the house, imbuing their kids with a worldliness that’s not so common. Ebrahimi went on to attend college at MIT. Like many heirs who tend to grow up in sophisticated families and get first-rate educations, Ebrahimi moved into adulthood with a huge head start in terms of understanding the workings of society and being prepared to influence it.
Michael Bloomberg’s daughter, Emma, is an even better example of an heir who knows her way around the realms of power and policy. After attending an elite private school in New York City, she went to Princeton and later earned a joint MBA from Harvard Business School and MPA from Harvard’s Kennedy School of Government. She spent nearly three years working for New York City government, and then nearly seven years working for the Robin Hood Foundation, the anti-poverty group heavily backed by Wall Streeters. Emma sits on the board of Bloomberg Philanthropies and will likely have a major hand in giving away one of the greatest fortunes of our time, through a foundation with an explicit goal of influencing government policy. That’s a lot of power to hold because of who your dad is—but you can’t say she hasn’t been preparing to exercise such power.
The swelling ranks of capable do-gooder heirs almost calls to mind the “Guardians” that Plato imagined in The Republic—an elite leadership class chosen at birth and rigorously educated to selflessly serve the common good. These days, it’s easy to see the appeal of Plato’s vision, given the failings of a flawed political class, and the frequent rapacity of the business class. A philanthropic elite groomed for service and empowered with loads of cash doesn’t sound half bad given what a mess of things other elites have made. Maybe we want the Emma Bloombergs of America to be amassing as much power as they are.
Or maybe not. The Enlightenment thinkers who invented modern democracy firmly rejected Plato’s ideal of beneficent elite rule. And most Americans champion the idea of governance by the everyman, at least in principle. We don’t like the idea of having our destinies shaped by a bunch of trust fund kids, most of whom are only faintly acquainted with the real-life struggles of ordinary people or the challenges faced by small businesses or how key parts of society—like, say, public education—actually work on the ground.
The pros and cons of having a new inherited philanthropic elite captures the larger debate over wealth being deployed for social good: The world desperately needs both new resources and new ideas focused on its biggest problems. But it’s unnerving to watch rich people, however smart or well meaning, amass even more power through giving after three decades of rising inequality.
Big picture questions aside, who exactly are the most empowered heirs in philanthropy, and what are they up to?
A place to start a deeper dig is with the Buffett family. As one of the richest people in America, Warren Buffett is among the most scrutinized billionaires of our time. But the large-scale philanthropy of his three children—who, together, give away more than $750 million annually—and the influence that comes with it, are only dimly understood.
Over many decades, as Buffett built his conglomerate Berkshire Hathaway, and piled up a historic fortune, he always had a philanthropic plan: His wife, Susan, would be in charge of giving away that money.
Buffett’s thinking was not uncommon. The wives of super-wealthy men often are the ones who take command of family philanthropy, identifying the causes to support and overseeing the day-to-day work of moving money out the door. (Still, in a maddening pattern, it is nearly always their husbands who get all the public credit.)
Buffett himself had little interest in giving away money, only in making it. But Buffett did believe strongly in philanthropy, calling it the “risk capital of society.” And Susan, or Susie as she was known, had specific ideas for how to affect the world with Warren’s wealth. She had liberal views and an urge to help people in need. She was active in civil rights work in Omaha in the 1960s, pushing for an end to segregation in housing, along with other changes. Later, she embraced reproductive rights as her top cause. Nuclear disarmament was another issue that animated Susie.
When the Buffetts set up a foundation in the 1960s, Susie served as its president. Planned Parenthood was among the top beneficiaries of the Buffett Foundation, and in the 1990s the foundation—now managed as well by the Buffetts’ daughter, also named Susie—played a key role in bankrolling the research that created RU-486, the so-called abortion pill.
Warren generally shared his wife’s liberal views, if not her desire to work in a hands-on way to improve society. He strongly rejected the Horatio Alger view of success so popular among conservative-minded business types and instead talked often of how the “ovarian lottery” determined people’s fate. As he’s said: “For literally billions of people, where they are born and who gives them birth, along with their gender and native intellect, largely determine the life they will experience.”
Buffett had always assumed that his wife would outlive him, and imagined her as the one “who oversaw the distribution of our wealth to society.” In his will, Buffett left his entire fortune to Susie, even though the couple had lived in separate cities for years.
But Susie died of cancer in 2004, rendering moot Buffett’s philanthropic endgame. Buffett was then in his mid-seventies, with a net worth of $41 billion. By this time, Buffett’s three kids—Susie, Howard, and Peter—all were developing foundations of their own. And his late wife had left her shares of Berkshire Hathaway stock—eventually worth over $2 billion—to the Buffett Foundation, which was renamed in her honor. That foundation started scaling up after her death under the direction of daughter Susie and her ex-husband, Allen Greenberg. The natural thing for Buffett would have been to revamp his philanthropy plan to leave his fortune to the four family foundations controlled by his kids.
Three of those foundations had been set up in 1999, when Warren and Susie Buffett created a foundation for each of their children, endowed with $10 million. “They wanted us to clearly understand that we should do what we wanted to do,” Howard Buffett told me. “And the biggest reason was because if you do something you love you’ll do it with passion. And if you do it that way, you’re way more likely to do a good job than not.”
Other billionaires have had the same insight. When Jim Simons started thinking harder about giving away his vast hedge fund fortune, he originally had the idea that his children might work with him on that project through one family foundation. Then it became clear that not everyone had the same interests. So while Jim and his wife, Marilyn, developed a major foundation focused on science, the three Simons children went their separate ways as philanthropists, running their own foundations each with its own distinctive priorities.
Warren Buffett’s stunning success with Berkshire Hathaway had made him many times wealthier than most other billionaires, which compounded the challenges of wisely giving away a lot of money. According to his biographer, Alice Schroeder, Buffett didn’t have the natural confidence in his kids that he did in Susie. He wasn’t sure they could handle wealth on such an epic scale. So, two years after his wife’s death, in June 2006, he announced that he would leave the bulk of his fortune to the foundation run by his long-time friends Bill and Melinda Gates.
The deal, which had taken months to work out, sent shock waves through the philanthropy world. It was unprecedented for one billionaire to turn to another to give away his money. Yet the move seemed logical to the no-nonsense Buffett, who thought he knew a good investment when he saw it. “Bill Gates is the most rational guy around in terms of his foundation,” Buffett once said. “He and Melinda are saving more lives in terms of dollars spent than anybody else.”
This part of the story about Buffett’s philanthropy—the massive gift to the Gates Foundation—is well known. What is less known is that Warren Buffett’s wealth grew dramatically after he made that gift in 2006, standing at around $65 billion a decade later, and the amount of his money that isn’t slated to go to the Gates Foundation is far larger than most people realize—or maybe than Buffett himself ever anticipated.
Under the terms of his pledge to the foundation, Buffett is handing five out of every six shares of his stock holdings to Gates. Yet given his wealth, the spare change left over after meeting that pledge is a great fortune itself, all of which will eventually make its way to philanthropy.
Where will this money go? Buffett said as part of his 2006 announcement that most of it will go to the foundations controlled by his kids. Since then, along with the Gates Foundation, these family foundations have also been getting large annual gifts of Berkshire Hathaway stock from Buffett. And thanks to those infusions, the three younger Buffetts have quietly emerged in recent years as among the top philanthropists in the world.
This was a turn of events that none of them had expected. Along with his siblings, Peter Buffett had been tipped off about his father’s plan a few months before it was publicly announced. At the time, the pledged stock was worth around a billion dollars. But that value would soar in coming years.
Buffett’s children take after their mother, with each intent on helping people in need—and ready to try to reshape public policy if that’s what it takes. Peter is probably the most radical of the bunch, questioning capitalism itself in a 2013 New York Times op-ed. In the piece, he inveighed against how “lives and communities are destroyed by the system that creates vast amounts of wealth for the few.” Too often philanthropy, or the “charitable-industrial complex,” as Peter called it, worked to perpetuate such inequities. The real goal of giving, he said, should be to “shatter current structures and systems that have turned much of the world into one vast market.” (Peter later said that his dad read the piece before it ran and loved it.)
A professional musician with a new age bent, Peter had initially been ambivalent about focusing his time on philanthropy after his parents set up foundations for their children. He liked his quiet private life, with its calm routines. His wife, Jennifer, though, jumped into the work of running a small grantmaking operation and handled the many administrative details.
Warren’s massive 2006 gift, what Peter dubbed the “big bang,” would take their foundation, which they named NoVo, to an entirely different level. The couple has used their windfall of annual gifts of Berkshire Hathaway stock (worth $185 million in 2014 alone) to champion some of the most marginalized people in the world. Operating out of offices in Midtown Manhattan, not far from the New York Public Library, NoVo has made empowering women and girls—particularly those of color—its primary cause.
Peter has explained how this focus came about. When he and Jennifer started NoVo, they weren’t fixated on specific issues, as many philanthropists are. Rather, they were driven by a few basic instincts. One was a desire to avoid what Peter called “philanthropic colonialism,” which he described in his memoir, Life Is What You Make It, as the tendency of well-meaning outsiders to “imagine that they understand the challenges facing local peoples better than the local people themselves.” Peter and Jennifer wanted to do things differently: “Our approach would be to provide support for people who identified their own needs and evolved their own solutions.”
A second idea was to challenge a world “based in domination and exploitation” and help “move it to a world of collaboration and partnership.” That led the couple to think about “what we would call feminine values,” said Peter, where the focus is less on “power over” and more on “power with” and collaboration.
More concretely, as the Buffetts talked to experts in philanthropy and beyond, trying to sort out their giving priorities, they came to see that empowering girls and women had all sorts of multiplier effects in terms of changing how communities and entire national economies worked. Warren Buffett has made his fortune by investing in undervalued assets, and Peter came to think of the world’s female population in this light. He said: “If their voices aren’t heard, of course you’re missing half the population—but more importantly when you support them, they support their families, and their communities, and it starts to transform how the world is taken care of.” By 2016, the NoVo Foundation was one of the top U.S. funders for gender equity.
This is also a focus of the much larger Susan Thompson Buffett Foundation, which is based in Omaha, and chaired by daughter Susie. In 2014, the foundation gave out $416 million in grants, nearly all of it to further sexual and reproductive health and rights. Just a decade earlier, it gave out a fraction of that amount—a testament to how quickly new philanthropic powerhouses can emerge these days, pouring game-changing amounts of money into certain issues.
The Buffett Foundation remains a top supporter of Planned Parenthood and other groups that back abortion access, as it was when the senior Susie ran it. Yet now it’s writing even bigger checks. One of its largest impacts has been around contraception, where the foundation has played a key role in battling unwanted pregnancies by helping bankroll new birth control options. Its grants have helped revolutionize the use of IUDs, a long-acting form of contraception. A reason that IUDs are so effective is because, once these tiny T-shaped devices are inserted into the uterus, there’s no room for user error. The Buffett Foundation invested heavily both in research to improve IUDs and programs to spread their use. “Quietly, steadily, the Buffett family is funding the biggest shift in birth control in a generation,” according to one media account.
In the United States, more than half of pregnancies are unintended—some 3 million such surprises every year—with poorer women most likely to get accidentally pregnant. Around 1.5 million births result from these pregnancies annually, with most of the costs covered by Medicaid.
Yet while Medicaid picks up the tab for unplanned births, government funding for contraception is in short supply, especially in certain states where religious conservatives wield influence or fiscal pressures are mounting. The Buffett Foundation has often stepped in to make a difference. One foundation-backed effort to provide long-acting birth control to teenagers in Colorado helped lower the birthrate among teenagers across the state by a stunning 40 percent from 2009 to 2013, and sharply cut the number of abortions, too. Despite this success, the Colorado legislature refused to provide ongoing funding for the program—at which point a group of private funders stepped in ensure it would continue, including Ben Walton, an heir to the Walmart fortune who lives in Denver.
Buffett funds don’t just make contraception more widely available; this cash is also crucial to ensuring that abortions are accessible in many places in the United States. The foundation is the single largest funder, by far, of the National Abortion Federation (NAF), the professional association of abortion providers. It’s given the group tens of millions of dollars in recent years, money that, among other things, helps train doctors to perform abortions, a skill no longer taught at most medical schools. In 2014, it gave the group $23 million to support its national telephone hotline, which NAF describes as the “only toll-free source of information about abortion and referrals to providers of quality care in the U.S. and Canada.” Other big checks have gone to an array of pro-choice groups that are deep in the policy fights over abortion access, like the National Abortion Rights Action League (NARAL) and the National Women’s Law Center.
Meanwhile, the Buffett Foundation is also the single largest private funder of family planning services at an international level. Much of this money finds its way to distant parts of the world, where women are battling not just for control over their reproductive choices, but for a range of basic rights. One of its biggest grantees, Ipas, is the global equivalent of NAF—advocating for abortion rights while training providers in numerous countries, especially in Africa, where some 6 million unsafe abortions occur every year, killing nearly 30,000 women. Ipas has pulled in nearly $150 million in grants from the Buffett Foundation in the past decade.
In recent years, the Buffett Foundation’s giving has grown steadily as it absorbed an influx of ever more valuable Berkshire Hathaway stock—an influx that promises to continue for years to come, bestowing billions on this institution and allowing it to expand its push for reproductive rights.
How many people know that one of America’s richest men is pouring a fortune into one of the world’s most contested issues? Not many.
Even less well known is how Buffett money is being used to fight hunger worldwide, as well as the conditions that lead to hunger—like war and political instability. Those are the priorities of Howard Buffett, whose foundation has lately been giving away upwards of $175 million a year, often backing ambitious and risky projects in sub-Saharan Africa.
Like his two siblings, Howard attended integrated public schools in Omaha growing up, and like both of them, he never finished college, a fact that didn’t bother his parents, who had always told their children to chart their own path. In an affectionate foreword to Howard’s memoir, Forty Chances, Warren joked of his kids: “If the three combine their college credit, they would be entitled to one degree that they could rotate among themselves.”
That book, published in 2013, explains Howard’s unusual life choices. He became a farmer in his twenties, eventually owning 1,500 acres in central Illinois. This experience led him to be keenly aware of the challenge of producing enough food for an ever more populous world, especially in places with poor soil or a lack of water. Buffett visited many such places after he took up wildlife photography and traveled the world taking pictures of exotic animals. He came to see how widespread hunger and malnutrition were in many places, especially Africa, where he traveled extensively, often to remote corners of little-known countries. When Warren Buffett began shoveling big chunks of Berkshire Hathaway stock into Howard’s foundation, after 2006, Howard moved to tackle food issues on a large scale.
Buffett strongly embraces his father’s adage that philanthropy is society’s risk capital. He told me Warren passed along huge wealth with exactly that attitude, saying: “You go take risks, you try to do things. You can fail as many times as you need to fail to get to some of those big wins.” Howard estimates that he’ll give away a total of $8 billion before his foundation shuts its doors in 2045. That’s a lot of risk capital to work with.
Howard and his small staff have bankrolled projects in Africa, Latin America, and South Asia—getting behind local efforts to help farmers boost their yields and incomes. The foundation is making its biggest investment in Rwanda, where it’s putting up $500 million for a push to transform that country’s agricultural sector in ways that can serve as a model for the rest of Africa. Buffett has also created three research farms, to explore how to raise crop productivity in adverse settings. One is in Arizona. Another is in South Africa.
Not everything he’s tried has worked out so well. “I’m sure we have more failures than we have successes,” Buffett said, “and that doesn’t bother me. We’ve tried to do things in a lot of difficult places, and we’ve tried to do a lot of new things.” That’s the whole point of philanthropy, as he sees it. Buffett told me: “It’s the private foundations in the world that should take risks….We don’t have to stand up at our annual gala events to show our successes because we need more people to write checks.”
Warren has said that, as a small child, Howard was “a force of nature, a tiny perpetual motion machine,” and that he grew up to have “boundless energy,” operating on only one speed: “fast-forward.” As a philanthropist, Howard has given away huge amounts of money with just a few staff to help him, operating in a very hands-on way. “I go charging ahead. I want to go see stuff, look at stuff, and try to figure it out.” He estimates that he’s been to 130 countries.
No part of the world has preoccupied him more than the Great Lakes region of Africa. That spectacular area includes two of the biggest lakes in the world, Victoria and Tanganyika, along with some of its greatest biodiversity. It’s also home to three deeply troubled countries, the Democratic Republic of Congo, Rwanda, and Burundi.
In his work on agriculture in the region, Buffett came to see just how important peace and stability are to ensuring food supplies and preventing hunger. When farmers are driven from their land by warlords, or can’t get their crops to market because of conflict, people go unfed. And so it was that Buffett became involved in trying to stop the cycle of brutal conflicts in eastern Congo, where multiple armies have been fighting since the 1990s, in wars that have claimed five million lives.
This effort has taken different forms, including supporting efforts to stop poaching in the beautiful Virunga National Park, where rebels slaughtered elephants and sold the ivory to buy arms and supplies. The Howard Buffett Foundation gave funds to the park’s courageous director, Emmanuel de Merode, to build up a stronger force of rangers, helping bolster a small army that goes up against armed poachers.
Buffett also helped fund the hunt for Joseph Kony, the notorious Ugandan leader of the Lord’s Resistance Army (LRA), which is known for kidnapping children and for its psychopathic brutality. Black-market ivory is among its chief sources of revenue. Buffett knew the LRA all too well; his foundation had made grants for work to undo Kony’s damage by reintegrating child soldiers, counseling rape victims, and more. After consulting with lawyers, Buffett gave money to support helicopters and planes searching for the LRA. He even spent a night at the forward base in the Central African Republic. Buffett would tell the New Yorker about backing the Kony hunt: “Why would you not jump at the chance to stop the core problem? If I can spend my money stopping it so I don’t have to spend more money in the future on the victims?”
Smart philanthropists often think this way, casting an eye upstream to where problems get started. While Buffett’s giving can seem chaotic and impulsive at times, he’s also a strategic thinker. He wants to fund permanent solutions that stick, not to just keep reapplying Band-Aids. After years of watching recurrent warfare in the eastern Congo, Buffett had come to the conclusion that most of what NGOs were doing in the region wasn’t getting at the underlying causes of conflict. Relief projects didn’t deal with a key problem, which was that a lot of men had no other livelihoods beyond warfare. “The missing piece was you couldn’t reintegrate people because there were no jobs.” There was no magnet pulling fighters into more productive endeavors. “We felt we needed to do something different,” Buffett said. “You’ve got to provide the jobs, provide alternatives to what people are doing today.”
The quest for a breakthrough led Buffett to bet big on building hydroelectric plants in the Great Lakes region. Electricity, Buffett knew, is an important driver of prosperity. “It provides the power to establish businesses.” And so the foundation undertook a pilot project, financing a small hydroelectric plant in Congo. Sure enough, after the new electricity was flowing, two new businesses popped up, one of them making soap, that eventually came to employ hundreds of people. Buffett decided to double down, next backing larger hydroelectric plant in North Kivu, in eastern Congo, that would cost $20 million and provide power to 130,000 people. Another benefit he saw from this electricity, beyond powering businesses, is that it would reduce the number of trees that people had to cut down in Virunga National Park to make charcoal for cooking. That activity didn’t just hurt the forest, it helped rebel groups who often forced charcoal harvesters to pay a tax to them. Buffett saw how a new, bigger power plant could have “a very far-reaching impact in terms of a single project. That’s what sold us on it.”
The plan was for the Howard Buffett Foundation to put up half the cost of the new plant, with other partners laying out the rest. After those partners pulled out, Buffett still went forward. He and his staff also did a feasibility study of funding six more power plants in the area. The study found that 800 to 1,000 jobs would be created for each new megawatt of electricity. That seemed like a bargain to Buffett, who had enough money to actually back an effort on this scale and saw growing hope that economic development could eventually crowd out conflict in eastern Congo.
Yet he always knew that things could go wrong. “It’s a huge bet,” he said of the power plants. “It’s also a really big risk. There is a lot that can go wrong….We’re doing this in the middle of active conflict.” But the alternative—doing the same things NGOs had always been doing—was a dead end. This wasn’t the time to play it safe, as many funders prefer to do. “The risk doesn’t faze me in terms of what we’re trying to do. If you don’t do something different, nothing’s going to change.”
As for the standard metrics of success that foundations obsess over, Buffett said to forget them all. “You really can’t set up metrics in a conflict zone. Everything changes all the time. The goalposts change, the players change….If we sat back and tried to analyze these on a set of metrics, we would never do the project.”
The new hydroelectric plant opened in December 2015. Buffett pledged nearly $40 million to build two more such plants in North Kivu.
Not every billionaire has kids ready to put the family fortune to good use. Some children of top philanthropists aren’t keen on carrying on their giving. Eli Broad, who is in his eighties with a $7 billion fortune to dispose of, told me that neither of his children was interested in one day piloting the Broad philanthropic operation. The foundation instead will spend down and close within fifteen or twenty years of Broad’s death. Gordon Moore’s sons sit on the board of his foundation, but neither has emerged as a very active figure in philanthropy. Some billionaires, like David Geffen and Paul Allen, don’t have any heirs.
Other families, though, are more like the Buffetts, with the next generation eagerly taking on the job of large-scale philanthropy. Three out of four of George Soros’s kids back different causes and sit on the board of the Open Society Foundations. His daughter, Andrea, has focused on Tibet and global development issues. His son Jonathan has pushed to reform the campaign finance system. The youngest son, Alexander, has taken up human rights and other challenges facing marginalized peoples.
Jim Simons’s three kids are even further along in their own giving. Pete Peterson’s son, Michael, is the president and CEO of the foundation named after his father. He’s led the foundation’s influential work on fiscal policy and in years to come is sure to be a key figure in giving away many hundreds of millions of dollars that his father has pledged to philanthropy. Shari Redstone, the daughter of the media mogul Sumner Redstone, has played a central role in that family’s philanthropy and is set to play an even bigger role down the line. Dave Peery is now piloting the Silicon Valley foundation set up by his billionaire parents with their real estate fortune, just as Lisa Sobrato Sonsini, the daughter of another Bay Area real estate billionaire, John Sobrato, has been a driving force in scaling up her family’s philanthropy over the past eighteen years. The list could go on.
Probably no heirs in America wield as much influence as the Walton family, which still has a dominant ownership stake in Walmart, the largest private employer in the United States. Arguably, though, these heirs wield nearly as much clout through the family’s foundation, which has nearly $3 billion in assets and gave out $374.7 million in 2015 alone, with the largest share of that money going to reshape America’s K–12 system.
The foundation has a professional staff, but its board is controlled by family members. Among them is board chair Carrie Walton Penner, a third-generation Walton who has long been a major player in the foundation’s K–12 giving. Penner has a profile similar to that of other heiresses who’ve groomed themselves for leadership in philanthropy, like Katherine Lorenz and Emma Bloomberg.
After graduating from prep school in 1988, Penner went to Georgetown University, where she studied economics and history. At college, she volunteered to tutor high school students in Anacostia, a poor neighborhood of Washington, D.C. She found the experience deeply disturbing. “I have no idea why they were going to school at all because, frankly, they weren’t being educated,” she later said. By the mid-1990s, Penner was immersed in education issues and finished her master’s degree in education policy and program evaluation at Stanford University. Afterward, she served as a program officer at the Walton Family Foundation, among other jobs working on education.
Penner is more than a funder of the school choice movement: She’s actively directing it by serving on the boards of the top groups leading the reform charge. She is on the board of the KIPP Foundation, America’s largest charter school organization, which runs 125 schools. One reason KIPP has such reach is that the Walton Family Foundation has pumped over $60 million into it. For a time, Penner sat on the board of the Alliance for School Choice, an advocacy group that not only supports charter schools but has also backed vouchers. Walton has been by far the largest funder of this group, with grants totaling over $20 million. As well, Penner is on the board of the Charter School Growth Fund, a pivotal player in the charter movement, as mentioned earlier. The Walton Family Foundation has given it over $100 million.
Penner is active in several education organizations in California, where she lives, most notably the California Charter Schools Association, which seeks to expand and defend charter schools in America’s largest state. The Walton Family Foundation is this group’s largest funder by far, with grants totaling over $40 million. Penner has been deeply involved in key charter school fights in California, both as a philanthropist and as a campaign donor. The Walton Family Foundation is helping fund the Broad Foundation’s ambitious quest to expand charter schools in Los Angeles, while Penner and her uncle, Jim Walton, have sought to create a more politically friendly climate in LA for charters by donating over $1 million for local school board races in 2014 and 2015.
Penner’s husband, Greg, who is the chairman of Walmart’s board, is also immersed in the education world. He previously served as co-chair of the Charter School Growth Fund, and is a board member of Teach for America. The Waltons are the single largest funder of Teach for America, with cumulative grants totaling more than $100 million. In late 2015, their foundation announced it would make a $50 million grant to the organization.
The Penners are one of the top power couples in education reform circles right now, with huge resources and major clout. They have worked hard to master K–12 issues and make things happen. But make no mistake: Carrie has so much influence over education policy in America because of the family she was born into; Greg has it because of who he married.
These private citizens, with such outsized power over public institutions, illustrate the new face of dynastic wealth in America. Get ready for a future with many more philanthropic heirs who operate in the same activist style.
There’s enough hostility to inherited wealth in America that even some of the nation’s richest people see it as a bad thing. But their solution, to give away the money, turns out to be not much of a solution at all—at least not if you’re worried about civic inequities getting baked more deeply into American life amid the disposal of today’s historic fortunes. Indeed, as we’ve seen, leaving a foundation to your kids actually gives them more influence in society than passing down the wealth directly.
The fact that many heirs take philanthropy so seriously is good news and bad news. It’s good news in that we’re unlikely to see a bunch of empty-headed rich kids giving away billions, or at least this hasn’t been the pattern so far. It’s bad news in that we’re seeing a marked expansion of the kind of sophisticated elite power that so many Americans find unnerving. In this case, though, we’re not talking about expert leaders who at least ascend to their influence through quasi-meritocratic systems. We’re talking about elites who are born into that power and come to exercise it at considerable expense to U.S. taxpayers, who help foot the bill when new family foundations are created.
So far, most Americans are unaware of the huge power that heirs are coming to wield through philanthropy, and there has been minimal backlash to this trend. But there has been pushback lately to elites in general, as seen in social movements like the Tea Party and the presidential campaigns of Donald Trump and Bernie Sanders—not to mention years of polls showing declining public faith in most institutions.
One reason so many Americans chafe at being ruled by experts and rich people is the sense that such elites are out of touch with their own life experiences. There’s a lot of truth to that. For all their training and expertise, as well as their obvious empathy, people like Emma Bloomberg and Carrie Penner Walton—raised in wealth and privilege—can’t possibly understand what it’s like to live in certain circumstances. And, yet, as philanthropists they have the ability to powerfully intervene in ordinary people’s lives, both in America and around the world. That doesn’t seem right in a country founded in opposition to dynastic power. And it doesn’t seem sustainable in an America that has often distrusted elite rule.
Even if philanthropic heirs use their power wisely much of the time, it’s hard to imagine that this situation—if fully understood—will sit well with the American public in a coming future where many more heirs exercise ever growing influence in society.