Warren Buffett was disappointed to hear recently that a $135 million donation by two former Omahans who were early Berkshire Hathaway Inc. investors has virtually disappeared.
“This came as a huge surprise to me,” Buffett told the Wall Street Journal.
Anupreeta Das reported for the Journal that Donald and Mildred Othmer donated $135 million to the Long Island College Hospital in Brooklyn, N.Y., less than 20 years ago. They specified that the endowment should be “held in perpetuity,” with the income being spent but not the principal itself.
But now almost all of the Othmers' gift is gone, the Journal said, creating a “cautionary tale for wealthy investors who hope their gifts will make a long-term impact.”
If the Othmers were alive today, Buffett told the Journal, “I would think they would feel betrayed.”
The Othmers invested with Buffett about 50 years ago and ended up with 14,500 shares of Berkshire stock, which would be worth about $2.5 billion today. The couple died in the 1990s, leaving estates valued at more than $700 million.
Several years later, financial problems prompted the hospital's leaders to seek court permission to use the money for loan collateral and to set up a fund to pay for malpractice judgments and other expenses.
“Doctors, nurses and community activists say the treatment of the Othmer gift illustrates a pattern of financial mismanagement on the hospital's part,” the Journal reported.
Some courts have the power to revise a will to save a charitable organization from failing, under certain conditions. The court allowed the spending on the theory that the Othmers would have wanted the hospital to stay open.
Now the hospital's owner since 2011, the State University of New York Downstate Medical Center, has permission to close it because of continuing losses.
The Othmers, both Omaha natives and University of Nebraska graduates, provided $130 million from their Berkshire fortune to the university's Lincoln campus, funding Othmer Hall, home of UNL's chemical engineering program, and endowing related academic programs and fellowships.
The couple married and lived in New York City, where Mildred Othmer had earned a master's degree in industrial engineering at Columbia University after teaching English at Omaha Benson High School.
Donald Othmer was one of the country's top chemical engineers, credited with more than 150 patents for chemical processes and serving as a founding editor of the Kirk-Othmer Encyclopedia of Chemical Technology, a standard reference work for the profession.
He headed the chemical engineering department at Polytechnic University in Brooklyn, which also received a bequest from his estate in 1994. Mildred Othmer died in Omaha in 1998 after an extended illness.
Other recipients of Othmer bequests included Miracle Hills Community Baptist Church of Omaha, the Omaha Public Schools, the Chemical Heritage Foundation in Philadelphia and Planned Parenthood of New York City.
More than 10,000 people have signed up for Giving With Purpose, a free class on effective philanthropy hosted by Buffett and his sister, Doris, at learningbygivingfoundation.org.
Online registration is still open for the Massive Open Online Course in Philanthropy. People from all 50 states and 78 countries are registered.
Among class projects: Giving away $100,000 of the Learning by Giving Foundation's money, part of a $5 million endowment from Doris Buffett's Sunshine Lady Foundation.
The first of six classes is now live for those who register.
The online class is an offshoot of Doris Buffett's Learning by Giving classes, which are offered at several universities around the country.
Sam Colin read Buffett's writings when he was an intern. That's not too unusual, but Colin was an intern at the Yale School of Medicine, not an investment company.
Today Colin is a physician and a managing director at the First Manhattan Co. investment fund in New York City, Thomson/Reuters reported.
His duties include looking into medical-related businesses as investments for First Manhattan founder David “Sandy” Gottesman, who has been a member of Berkshire's board of directors since 2004.
As the biggest shareholder of Vivus Inc., First Manhattan challenged the company's leadership in a shareholder vote, winning a majority on Vivus' board and the right to name a new CEO.
Vivus' launch of the new diet pill Qsymia angered shareholders, Reuters reported. Colin waged a similar shareholder battle with Aspect Medical Systems Inc. in 2009.
As of last month, First Manhattan owned 2.08 percent of Berkshire's shares. The two proxy battles were in contrast to First Manhattan's usual passive ownership of long-term investments, Reuters said.
62 years with Geico
Buffett turns 83 next month, but he said last week that 62 years was an important period in his life.
Namely, he has been associated with Berkshire's auto insurance subsidiary Geico for 62 years. He took part in a ribbon-cutting ceremony for a new auto insurance service center in Carmel, Ind., near Indianapolis, that employs more than 350 people.
TheStatehouseFile.com reported that Buffett put his Geico longevity in perspective, noting his Geico years amount to “25 percent of the life of the country.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.