World's richest people just can't give away their money fast enough

(From left) Microsoft's Bill Gates, Facebook's Mark Zuckerberg and Berkshire's Warren Buffett have added a combined US$139 billion to their fortunes since 2010.
(From left) Microsoft's Bill Gates, Facebook's Mark Zuckerberg and Berkshire's Warren Buffett have added a combined US$139 billion to their fortunes since 2010.PHOTOS: REUTERS, AFP

WASHINGTON (BLOOMBERG) - Warren Buffett gave himself a challenge when outlining his philanthropic vision at the start of this decade.

"At the latest, the proceeds from all of my Berkshire shares will be expended for philanthropic purposes by 10 years after my estate is settled," he wrote in his Giving Pledge letter in 2010. "Nothing will go to endowments; I want the money spent on current needs."

That task - the wholesale gifting of one of the largest fortunes ever - has only gotten harder. Even though Buffett has since given away shares in Berkshire Hathaway Inc worth more than US$30 billion (S$41 billion) at the time of the donations, his wealth continues to soar.

Buffett, who turned 88 on Thursday (Aug 30), has a net worth of US$87.1 billion, according to the Bloomberg Billionaires Index. That's 86 per cent more than at the time of his 2010 letter.

He's not the only one looking to give away a mega-fortune. Bill Gates and his wife Melinda have said their namesake private foundation - the world's biggest with a US$51 billion endowment at the end of 2017 - will spend all of its resources within 20 years of their deaths.

Facebook Inc co-founder Mark Zuckerberg and his wife Priscilla Chan said in 2015 that they planned to give away 99 per cent of their stock in the social network to advance philanthropic causes.

Yet billions of dollars of donations later, their fortunes are higher than ever.

Gates, Zuckerberg and Buffett have added a combined US$139 billion to their fortunes since 2010 as the value of their holdings in companies such as Microsoft Corp, Facebook and Berkshire have increased.

A growing group of philanthropically minded billionaires are starting to wrestle with the problem.

The Giving Pledge - a commitment by signatories to give away at least half their wealth - has garnered 184 of the world's wealthiest individuals and families, including Tesla Inc's Elon Musk, the co-founders of Airbnb Inc and developer Stephen Ross. Michael Bloomberg, the owner of Bloomberg LP, parent of Bloomberg News, also is a signatory.

With America's economy booming and the bull market showing few signs of flagging, the value of those pledges is only increasing.

"Many philanthropists think about their giving year-to-year" rather than take a long-term view, said Susan Wolf Ditkoff, partner and co-head of the Bridgespan Group's philanthropy practice.

While the stock market historically has returned 7 per cent to 8 per cent a year, "annual giving among the wealthiest philanthropists isn't close to that number, let alone on-track to contribute half of their wealth within their lifetimes," she said.

Still, the very public goals Buffett set are encouraging more philanthropists to think about what they need to do to achieve them.

"The good news is there are an increasing number of attractive places to invest in social-change causes," Ditkoff said. "We're not in the place we were a decade ago."

That's good news for Buffett as he looks to spend down his mounting fortune. So far this week, he's added US$1.3 billion to his net worth.