I think it is "normal" to the extent that the foundation keeps receiving additional shares each year and is mandated to use the gifts for spending within a short time. The foundation doesn't have to technically sell Berkshire shares to meet Buffett's mandate that they add incrementally to Gates Foundation activities but if they sold other assets instead Berkshire would become a larger and larger percentage of foundation assets. From Warren Buffett's letter to Bill and Melinda Gates dated 6/26/2006:http://www.berkshirehathaway.com/donate/bmgfltr.pdfConditions on the gifts (emphasis mine):There are three conditions to this lifetime pledge. First, at least one of you must remain alive and active in the policy-setting and administration of BMG. Second, BMG (or any intermediary) must continue to satisfy legal requirements qualifying my gifts as charitable and not subject to gift or other taxes. And, finally, the value of my annual gift must be fully additive to the spending of at least 5% of the Foundation’s net assets. I expect there to be a ramp-up period of two years during which this condition will not apply. But beginning in calendar 2009, BMG’s annual giving must be at least equal to the value of my previous year’s gift plus 5% of BMG’s net assets. If this amount is exceeded in any year, however, the excess can be carried forward and be offset against a shortfall in subsequent years. Similarly a shortfall in a given year can be made up in the following year.As far as I know, Buffett has not commented on Gates selling but since he believes that 1.1x book value far understates intrinsic value, could he be pleased that his gifts are being liquidated at 1.15x book? I doubt it ... Another excerpt (emphasis mine):I regard Berkshire as an ideal asset to underpin the long-term well-being of a foundation. The company has a multitude of diversified and powerful streams of earnings, Gibraltar-like financial strength, and a deeply-imbedded culture of acting in the best interests of shareholders. Outstanding managers are available to succeed me. I expect Berkshire to become ever-stronger and more profitable as it makes new acquisitions and expands present businesses.
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