While I’m still reflecting on 2023, I lament the passing of Charlie Munger at age 99, Warren Buffett’s sidekick at Berkshire-Hathaway for nearly 50 years. All of us in Charlie’s fan club knew the day would come, though we kept hoping it’d be later. He was the kind of guy who just seemed like he might live forever—brilliant and quick-witted all the way till the end. We can learn a lot from Charlie’s life. He was a voracious reader who committed the bulk of every day to learning. He was a genius investor who freely shared his advice, such as buying quality companies with good upside potential, paying a good (even though not bargain) price, rather than buying cheaper damaged goods. But the lessons from Charlie Munger’s life I want to focus on today is his philanthropy.
Per Karen Langley’s Wall Street Journal article “Charlie Munger’s Donations Came with Plans Down to the Details,” (Dec. 4, 2023), he gave more than $500 million to universities, hospitals, and other institutions. But “Munger didn’t just write checks.” He was a generous donor, but his gifts came with strings. He had specific ideas for the use of philanthropic dollars, and he attached conditions to his gifts. When he funded campus projects, the money came with blueprints for the design. For example, “he pushed for high ceilings and plentiful common areas and expressed his dislike for buildings with curves.”
Munger was especially interested in the design of student housing, seeing it as “a component of education…. It’s where young people meet and learn to exchange ideas and form business relationships that they’ll then have for the rest of their lives.” I can personally attest to the value of student interaction, as I consider the lifelong impact of my law school classmates on my law practice. To facilitate such interaction, Munger insisted that hallways should be wider “such that when people see each other they are comfortable interacting whenever they bump into each other.” Munger Hall at UC Santa Barbara was a residence hall so large that it even contained interior bedrooms in order to house thousands more students. Munger eliminated bedroom windows, opting for “artificial windows with LED lighting that would mimic natural daylight.” One architect was so offended by the omission of bedroom windows that he resigned, but Munger refused to budge.
Recent media coverage highlights many major donors who have been disappointed by the way their funds are being spent by universities, often the donor’s own alma mater that the donor believes has gone off course. Munger’s approach is instructive. His advice would be to carefully design the gift, so it is contractual. Make the donation pursuant to an agreement that spells out detailed conditions where, if violated, the gift is revoked.
As generous as he was, the billionaire Munger refused to join his partner Buffett in signing Bill Gates’ Giving Pledge to donate at least half of your net worth to charity. The reason? He’d already given more than half of his wealth to his kids. (Sounds like Charlie did some very effective estate planning!) Unwilling to sign the pledge, he explained, “I’ve already given more than half of it to my children. So I can’t join them. It’s like coming back from the dead. I can’t do it.”
As we look to Munger as a role model, it’s interesting that Munger’s philanthropic views were inspired by one of his role models. “I’ve patterned my life after [Benjamin] Franklin. I stopped trying to make more money when I had enough. He did the same damn thing. He didn’t try to die with all his money, he gave away a lot of it…I’ve done the same thing.”
In the second of my three opportunities to ask a question at Berkshire annual meetings, I had the privilege of asking Warren & Charlie about their charitable giving. In their answer to me, Warren echoed Charlie’s sentiments about giving it away before you die, joking: “As Charlie said the other day, where he’s going, it won’t do him much good anyway. There’s no Forbes 400 in the graveyard.” Sadly, Charlie now lies in that graveyard, but his legacy lives on in millions of dollars of gifts designed exactly the way he wanted that money spent. And if those recipients ever go against Charlie’s wishes, I’m sure he’ll figure out a way to come back and haunt them.
Marvin E. Blum
Marvin Blum’s son Adam with the irreplaceable and no-nonsense Charlie Munger, a role model for carefully structuring charitable gifts to meet the donor’s specifications.