July 19, 2010

Pledge Statement

We are among the converted having committed to give all our net worth to philanthropy starting with a grant of $1.3 billion in 2006 to our spend-down Foundation.

When you think about it, no other approach seems to make sense. Passing down fortunes from generation to generation can do irreparable harm. In addition, there is no way to spend a fortune. How many residences, automobiles, airplanes and other luxury items can one acquire and use?

The Buffett/Gates initiative is likely to be a major “game changer.” Their partnership and dedication and their challenge to billionaires to share their wealth with the less fortunate will undoubtedly unlock a substantial amount of funds. Congratulations!

As former CEOs of a highly successful financial institution, we were rewarded monetarily beyond our wildest imagination, at the same time experiencing the emotional high associated with building a great company from scratch and winning in the competitive race. At the same time, we found equal gratification in working with employees and customers.

For example, an important part of our staff was composed of single working mothers. We provided training and counseling to these women, so that they could rise through the ranks and become managers with greatly enhanced earning power. On the lending side of our business, we found that there was no greater gratification than enabling a family to own their own home, especially when they thought it was an impossible dream. These are a few examples of the sense of fulfillment we experienced in “giving back” and which, among other things, led to our decision to devote our energy and money to making a difference in people’s lives. Believe it or not, the psychic income—the highs if you will—associated with giving money away thoughtfully and effectively has been even more gratifying than running a successful business.

Our two children are totally involved with us in the Foundation’s activities. Not only do they support our Pledge, but they also plan to follow our example with respect to their own net worth.

We would like to share with you the attached two documents we produced before getting started:

• Mission Statement and Values
• Guiding Principles for Grants

We would like to elaborate on some of the information contained in the attachments and also spend a little time discussing how we operate.

We Want To Make As Big An Impact As Possible.
We are a spend-down foundation and therefore act with urgency to make significant contributions that have both an immediate and lasting impact.

We Are Focused On Achieving Results.
One of our core competencies stems from our experience as CEOs of the second largest savings bank in the country. We understand the critical importance of due diligence, an important part of which is evaluating the management of potential grantees. We offer technical assistance, i.e., how to improve strategic and business plans; goals and objectives; budgets; etc.

We Are Willing To Take Risks.
In essence, in many ways, we are venture capitalists. We are willing to take risks and make bold strategic investments in areas not adequately addressed by government, industry, universities or the non-profit sectors. We prefer to assist well-run organizations with additional funding, but where we have not been able to find an institution that can fill an important need, we have not hesitated to start one. During the last several years, we have created nine non-profits, all of which are performing beyond our original forecasts. We would like to give you two examples:

• American Asthma Foundation (AAF). Asthma is a chronic lung disease affecting approximately 23 million Americans. It is the most disabling childhood disease in the country, and as you might expect, it is an especially serious problem for poor, inner city children. Sad to say, there has been no material improvement in treatments for over 50 years.

Equally surprising, until we created the American Asthma Foundation, there was no institution devoted to funding research that would improve treatments, prevent and find a cure for the disease. Since its establishment ten years ago, through a highly innovative approach, AAF research has led to the discovery of 17 breakthroughs for new treatment, three of which are in clinical trials.

• ProPublica—Journalism in the Public Interest. The economic crisis of American journalism potentially undermines the ability of a free press to call the powerful to account. Herein lies our motivation to create ProPublica, a new kind of institution: a non-profit newsroom staffed with top talent and having as its sole mission producing journalism in the public interest with what we call “moral force.” Led by Paul Steiger, formerly Managing Editor of the Wall Street Journal, ProPublica already has won 30 honors, including a Pulitzer Prize for investigative reporting, since it began publishing in mid-2008.

We welcome the opportunity to add our names to the Pledge list and would like to express our thanks to Bill Gates and Warren Buffett for their leadership.