Warren E. Buffett, chairman and chief executive officer of Berkshire Hathaway, which is the parent of GEICO Corp., has announced he will donate the bulk of his shares in the company to the Bill & Melinda Gates Foundation (BMG).

In a "Dear Bill and Melinda" letter, dated Friday, Mr. Buffett said he admires the work of their foundation and wants to help expand their activities. He plans to give BMG about $31 billion of his $44 billion fortune.

Mr. Buffett plans to donate 85 percent of his stock to five foundations with 83 percent of it going to BMG, which with $30 billion is already the world's largest philanthropic organization.

He wrote that he will "make annual gifts of Berkshire Hathaway shares throughout his lifetime to BMG and "the first year's gift will permit an increase in BMG's annual giving of about $1.5 billion."

"In the future, I expect the value of my annual gifts to trend higher in an irregular, but eventually substantial manner," he wrote

Mr. Buffett called his company "an ideal asset to underpin the long-term well-being of a foundation. The company has a multitude of diversified and powerful streams of earnings, Gibraltar-like financial strength, and a deeply-imbedded culture of acting in the best interests of shareholders. Outstanding managers are available to succeed me. I expect Berkshire to become ever-stronger and more profitable as it makes new acquisitions and expands present businesses."

The Gates, he said, have applied "truly unusual intelligence, energy and heart to improving the lives of millions of fellow humans who have not been as lucky as the three of us. You have done this without regard to color, gender, religion or geography. I am delighted to add to the resources with which you carry on this work."

In reaction, the Gates put out a statement Sunday that said, in part, that they were "awed by [their] friend Warren Buffett's decision to use his fortune to address the world's most challenging inequities, and... humbled that he has chosen to direct a large portion of it to the Bill & Melinda Gates Foundation."

Special Reports /

Buffett Giving Gates Foundation $31 B In Shares

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