Skip to main content
You have permission to edit this article.
Omaha benefits despite Buffett’s philosophy on local giving

Omaha benefits despite Buffett’s philosophy on local giving

  • 0
Omaha benefits despite Buffett’s philosophy on local giving

The planned $370 million Fred & Pamela Buffett Cancer Center, shown in this rendering in a view from Dodge Street and Saddle Creek Road, is the latest of several major Omaha facilities where the biggest donor contributed Berkshire-originated money.

For decades, Warren Buffett rarely kicked in when his hometown raised money for buildings or good causes, and he's still not an automatic go-to guy for local donations.

If Buffett says he has more money than he can use for himself, why doesn't he just write a check for every worthy cause around Omaha?

His answer goes back to Buffett's ideas about building wealth and how his money will be used when the time comes. A dollar invested correctly today, he has long believed, can be $100 tomorrow through the magic of compounded earnings.

Saturday's meeting in Omaha of about 35,000 shareholders of Berkshire Hathaway Inc., which Buffett built into an investment success as its chairman and CEO, is evidence that his money-making formula works.

And now that his wealth tops $50 billion, he believes it can help tackle some worldwide problems beyond the needs of his hometown.

But there's another side to the criticism about Buffett's frugality:

Counting money directly from Buffett family foundations and indirectly from his corps of early Omaha investors, donations and pledges totaling more than $1 billion have flowed or are coming into Nebraska, mostly in Omaha, for public buildings, social betterment efforts and nonprofit groups of all sorts.

A new World-Herald book, titled “The Oracle & Omaha: How Warren Buffett and His Hometown Shaped Each Other,” includes a look at the issue of spending by Buffett, one of the world's richest people but, until late in his career, a person who used money almost exclusively to earn more money.

The World-Herald is proud to announce its latest book, "The Oracle & Omaha: How Warren Buffett and his hometown shaped each other." Learn more and order here for $29.95.

Buffett's daughter, Susie, said critics of her father's spending habits miss the bigger picture.

“People say 'Well, he doesn't give any money away.' Well, no, he does not sit there at his desk and give money away,” she said. “He sits there at his desk and he makes a lot of money for the rest of us (in the family) to give away, which we all appreciate.

“And by the way, he's making a lot of money for a lot of other people to give away.”

Dick Holland, who ended up with tens of millions of dollars from his investments with Buffett in the early 1960s, figures that at least $1 billion in Berkshire-related money has been donated and pledged in Omaha.

“It's all over,” said Holland, who was the main donor for the $90 million Holland Performing Arts Center in downtown Omaha. “There wouldn't be a concert hall or anything like that. It changed the whole entertainment scene in Omaha.”

The $370 million Fred & Pamela Buffett Cancer Center is the latest of several major Omaha facilities where the biggest donor contributed Berkshire-originated money. All together, such buildings cost more than $600million, each with major donations from Berkshire investors.

Other early Berkshire investors who have been major donors for Omaha and Lincoln building projects include Carl and Joyce Mammel, Bill and Ruth Scott, Lee and Willa Seemann, Dan Monen, John and Janice Cleary, Dorothy and Leland Olson, Stanley and Dorothy Truhlsen and Donald and Mildred Topp Othmer.

The projects include a business college, a classroom building in Lincoln, medical research and teaching facilities in Omaha and the football stadium at Omaha Central High School.

Extreme deja vu:

In early 1962, Warren Buffett wrote to his investment partners that the most frequent question he is asked is what happens to their investments when he dies. He was 31 years old at the time. He's been getting the same question for more than 50 years.

Holland said he hasn't made a detailed study, but based on his own experience and information from other big-time Berkshire shareholders, for every Buffett-related dollar donated for a building project, at least another dollar has been donated or pledged to an ongoing project or program.

The list of Omaha programs benefiting from Buffett-created wealth includes Building Bright Futures, Girls Inc., 100 Black Men of Omaha, Bemis Center for Contemporary Arts, Salvation Army, Omaha Children's Museum, Northstar, Fontenelle Forest, Goodwill Industries, Joslyn Art Museum, Joslyn Castle, Lauritzen Gardens, Family Housing Advisory, Boy Scouts, Nebraska Humane Society, Durham Museum, Omaha Symphony, Opera Omaha, Omaha Community Playhouse, Ted E. Bear Hollow, Food Bank for the Heartland and YMCA.

A wide range of churches and college scholarship programs get donations from Berkshire shareholders.

The Sherwood Foundation, headed by Susie Buffett and funded by her parents, has made more than $300million in grants, mostly in Omaha and many supporting Omaha Public Schools, since her father began making major donations in 2006.

This year Warren Buffett's annual Sherwood donation will double to about $100 million, meaning that Sherwood grants alone would top $1billion by 2020. Sherwood pledges include $50 million to establish an early childhood education institute at the University of Nebraska-Lincoln.

Even so, why didn't Buffett make major charitable contributions until 2006, when he pledged nearly all of his money to four family foundations and the Bill & Melinda Gates Foundation?

That's because Buffett and his first wife, Susan Thompson Buffett, had thought that he would make the money and, after his death, she would be in charge of spending it to benefit humankind.

Many of Buffett's early Omaha investors followed his lead, leaving their money in Berkshire Hathaway stock for decades before they began making donations.

“The interesting thing is, unless they waited a long time, they wouldn't have had those kind of sums,” Buffett said in an interview for the “Oracle” book. “I know people may have criticized some of the people who were associated with Berkshire and say, 'Why aren't you doing more?' when the truth is, they ended up being able to do 10 or 100 times as much.”

When his wife died unexpectedly from a stroke in 2004, Buffett's plans changed and his pledge to the foundations followed. But the largest part of those donations will go to programs outside of Omaha.

One reason Buffett sees less need to make direct donations in Omaha: Other local companies also have succeeded and have civic-minded leaders.

Although Berkshire, at $280 billion, is the most valuable Omaha company, Kiewit Corp., ConAgra Foods, Mutual of Omaha and Union Pacific Corp. all are on the Fortune 500 list. Wealth generated by HDR Inc., TD Ameritrade, Tenaska Inc. and other businesses has created dozens of multimillion-dollar fortunes in Omaha.

Walter Scott, chairman emeritus of Kiewit, supports many of Omaha's biggest projects. “I think I can make a difference in Omaha,” Scott said.

He founded Heritage Services, a nonprofit group that coordinates donations from Omaha's wealthy people. Recent projects supported by Heritage Services include the University of Nebraska at Omaha's planned hockey arena, South High School's soccer and football stadium, the CenturyLink Center Omaha, TD Ameritrade Stadium, the Salvation Army Kroc Center, Henry Doorly Zoo & Aquarium projects and the Durham Museum, plus paying for studies on possible improvements such as a streetcar line.

Scott has been a major donor for the zoo, UNO's Scott Technology Center, the Bob Kerrey Pedestrian Bridge and other projects. In 2010 his family foundation's grants totaled $115 million.

Although most of his wealth came from the Kiewit Corp., Scott's friendship with Buffett goes back to childhood, when their mothers belonged to the same sewing circle. He has been a director of Berkshire since 1988 and owns $16 million worth of its stock.

But while both he and Buffett are philanthropists, Scott said, “there's a big difference between him and me: money.” Scott may be a billionaire, but Buffett has donated more than $13 billion to foundations since 2006, and his Berkshire holdings still total $56 billion.

“I admire enormously what Walter Scott has done,” Buffett said. “I mean, anything for this community, he's going to want to be part of, and big time. But that really isn't the place where I want to have my money operate.

“I think from a societal standpoint, if you can knock out malaria or something that dramatic or reduce infant mortality, my money has a greater use there than actually working on specific local projects. In terms of big money, there are certain problems in society that are huge and don't have natural funding constituencies. And most of them are terrible problems. That's why they are huge.

“I'm not doing things to have my name on them or to be a big shot locally or that sort of thing.”

Some of Buffett's giving is done quietly. He has a matching donation program for the United Way of the Midlands campaign, for example, that encourages other large donors. And he has backed a few local projects, such as a new statue in honor of baseball great Bob Gibson, a personal friend, and he was part owner of the Omaha Royals baseball team from 1991 to 2012 to help keep the College World Series' tournament in Omaha.

Some of the Omaha programs supported by Berkshire money could have an impact beyond the city. Holland contributes to early childhood education efforts supported by the Sherwood Foundation and, because of those and other donors, Omaha is becoming a national example of how private support and state and local funding can prepare those children for school, said Jessie Rasmussen, president of the Buffett Early Childhood Fund.

“I've never heard of a community that gives like this one,” Rasmussen said. “I think Warren's a part of the gestalt for the community. It's amazing here. I know it's not like this everywhere.”

Omaha's record of charitable support goes back to the days of Sarah Joslyn, whose money paid for Joslyn Art Museum, and Peter Kiewit, whose foundation today holds about $400million and benefits the arts, education, children and families, community development, health and human services in Omaha.

Buffett's sister Doris operates her own Berkshire-funded foundation from Fredericksburg, Va., and said she admires Omahans' willingness to support good causes.

“They tackle big things. They make a place to live a community.”

Nebraska ties helped shape son of early Buffett investor

A fellow Nebraskan invited George Payne to Washington, D.C., for Richard Nixon's second inauguration, and he decided to take one of his sons, Alexander, then 11, along for the experience.

It was 1973, and George Payne had already made an important decision: to invest with Warren Buffett, who lived nearby. Their kids played together; his other son, George II, was the same age as Buffett's daughter, Susie, and went to the same Omaha Public Schools, from Dundee Elementary to Central High.

“I was amazed at what he's done,” George Payne said of Buffett, during a recent interview. “He's a genius.”

The investment with Buffett didn't change Payne's lifestyle. He worked until retiring in his 60s. “You have to do that,” Payne said of continuing to work. “It's just natural, if you understand yourself.”

The fellow Nebraskan issuing the invitation was Peter G. “Pete” Peterson, who was Nixon's secretary of commerce. George Payne directed the department's Omaha office of the International Trade Administration.

Peterson and Payne had something else in common: Peterson's family ran a restaurant in Kearney, Neb., and Payne's family had run the Virginia Cafe in Omaha, until it was destroyed in a fire in 1969. During the inauguration festivities, Payne, his son and Peterson met at a reception, and Peterson found out he also had something in common with Payne's son Alexander.

Peterson had been chairman and CEO of Bell & Howell, the movie equipment company.

“I was already a movie buff and wanting to make movies,” Alexander Payne said in a recent interview. “Somehow it came up that I liked movies, and he reached behind him and picked up this really neat 8 mm movie camera. All I cared about was that awesome movie camera.”

Peterson let the youngster hold the camera, look through the viewfinder, aim it and push the buttons. “I was enthralled,” Payne said.

Alexander Payne's latest movie, titled “Nebraska,” is due out later this year. Earlier films, including “Citizen Ruth” and “About Schmidt,” also were filmed in Nebraska, and “Sideways” and “The Descendants” won Academy Awards.

Did the 1973 encounter with the camera and Peterson help him toward a movie-making career? Payne said he already was making movies, using a camera from his father, but he still remembers holding that hefty Bell & Howell.

“Every little bit helps,” he said.

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.

Contact the writer:, 402-444-1080,

Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.



Breaking News

Huskers Breaking News

News Alert