AUDIENCE MEMBER 00:09
Good evening. My name is Sharukoi Chin (PH). I’m from Des Moines, Iowa.
While we have been discussing of how much return that a company has helped us to get in the past few years, and for the future, too, though, I believe there are many people who are concerned about how much have we given to the society in return.
And gentlemen, would you please share with us about your philosophy and the company policies and how much the Berkshire has done in terms of philanthropy and charities? Thank you.
WARREN BUFFETT 00:47
Yes. There are figures in the annual report that bear on that.
One thing we did wasn’t entirely voluntary, is that I think we gave about 2.6 billion to the federal government last year in — (laughter) — in income taxes. (Applause)
I’m not sure. I looked at General Electric and Microsoft and a couple of large — we may have paid more in federal income tax than any other U.S. company. I’m not — don’t take my word for that, because it could be Walmart paid more. I wouldn’t be surprised if Walmart paid more.
But there’s — I did look at a couple of the biggest ones and we did pay more than GE or Microsoft, both of which have market caps that are three times our size.
And the shareholder-designated contribution program was 18-or-so million, as I remember, and then we detailed the contributions in the report made by the other companies.
But I would argue that to the extent that GEICO, for example, is a more efficient way of delivering personal auto insurance than, overwhelmingly, than its competitors are, and that, if 15 percent is a fair indication of how much it is saving people, that — and then, on a $4 billion of premium volume — that there is something more than $600 million that consumers save by a more efficient way of distribution, which has been honed to a fine art by the GEICO management.
Really, delivering the goods and services that people want in an economical way is a very important part, I think, of the contribution that any company makes to society, as well as the taxes they pay and their actual corporate philanthropy.
We are not big believers in giving away the money of the owner — of Berkshire acting as their representatives and giving away their money to philanthropy. We think that the shareholder should — it’s their money.
And if we had a partnership of 10 people, if I were the managing partner, I would not feel I should make the decisions on philanthropy for the other 9 people. I would let them all make their own decisions.
We do not think that corporations, generally, should be passing out money to the pet charities of the CEO. And we don’t do it at Berkshire.
But we do let the shareholders make those designations. And, as I say, I think our primary — (applause) — thank you.
I think that the best contribution actually we can make, this is ideal, over 10 or 15 years, is find a — is finding ways to deliver goods and services, that people want, to them at lower cost than the alternatives that were previously available to them.
CHARLIE MUNGER 04:09
Yeah. Well, I applaud the questioner’s yearning for an answer to the question of, “Isn’t there something more in this game than making and piling up money?” and “Shouldn’t we be thinking about what we owe in return and what’s going to go back in return?”
In the Munger case, I think a hundred percent is going to go back in return, for a reason different from that of the Buffett case. You know, there’s an old saying: “How much did old Charlie leave?” And the answer is, “I believe he left it all.” (Laughter)
And in essence, the — it all has to go back one way or another. You can’t take it with you, that’s the iron rule of the game. And I do think it’s important to think about what you do for other people and what example do you set with your own life or your own corporate life.
And I do think that Berkshire stacks up pretty well in that respect. And in due course, when we get into gargantuan charities bearing the name Buffett, my guess is that’ll be done pretty well, too. This is likely to be a pretty good run.
WARREN BUFFETT 05:27
Zone 5. (Applause)
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