2008: What are the potential pitfalls of donating money?

AUDIENCE MEMBER: Hi. I’m Irene from Bonn, Germany. Both of you are very generous person. What is your joy of giving, and what are the potential pits when donating money — pitfalls when donating money? I’m sorry.

WARREN BUFFETT: The joys and giving and the pitfalls of donating money, huh. The — I know personally I’ve never given up anything in my life that made a difference in my life.

I mean, there are people that will go to church this Sunday and they will drop money in a collection plate, and it will make the difference about where they take their family, or whether they take their family, in terms of where they eat, whether they go to a movie, whether they get an extra present at Christmas, whatever it may be.

I mean, they are giving some money that makes a difference in their lives. I’ve never given a penny that way, and I never will.

I mean, I get to do everything I want to do in life. But because I’ve lived a long time — which gives you an enormous advantage in terms of accumulating money — and most of the things I want in life don’t come from the expenditure of money.

So it accumulates, and basically I’m giving away excess. I’m not giving away anything from necessity.

So I really — you know, I think what I’m doing is useful with the money, but I don’t think it’s on a par at all with the actions of somebody that’s giving money that really makes a difference in how they or their children live.

Those are really charitable people. I think my sister Doris is here. She has given away money that made a difference in her life. She gives away time, too. She gives away eight or ten hours a day, in terms of actually looking into the real needs of people, and giving them things beyond the money — giving them help and advice and somebody to talk to.

And, you know, that’s real giving. And I admire her for it. I’m not emulating her. I mean, she is in the retail business of giving; I like wholesale much better.

In terms of the pitfalls, you know, you can make mistakes in any area. But if you — you should give to things that you personally have an interest in and believe in, and that can be anything. I don’t — I’m not going to prioritize what should be done with gifts.

Something you’re involved in. Something you want to give your time to as well as money. But beyond that, I’ll let Charlie carry on.

CHARLIE MUNGER: Yeah. Regarding pitfalls, I would predict that, if you have an extreme political ideology, whether of the left or the right, you’re very likely to make a lot of dumb charitable gifts. (Laughter and applause)

WARREN BUFFETT: If you hang around Charlie like I do, you get the sunny side of life. I mean — (laughter)

We ought to have that playing, “The Sunny Side of the Street.”