Take a Cue From Warren Buffett: Be Flexible With Philanthropic Strategies

Late last year, Warren Buffett announced that his fortune will be directed to a charitable trust managed by his three children when he dies.

The announcement, made via Berkshire Hathaway where Buffett, 93, is chairman and CEO, was the first indication of how the famous investor planned to distribute his assets upon his death.

The fact Buffett waited to make these plans until he was 93—and his children were between the ages of 65 and 70—is not necessarily unusual for very wealthy people whose estate plans, and philanthropic giving strategies, constantly evolve, according to wealth management experts.

“We tell our clients all the time, you want to try to have as much flexibility in your future planning as possible because you just don’t know how situations are going to change,” says Paul Karger, co-founder and managing director of wealth advisory firm TwinFocus in Boston.

Buffett, for instance, made a lifetime commitment in 2006 to distribute annual grants to five foundations: the Bill and Melinda Gates Foundation, the Susan Thompson Buffett Foundation (named for his late wife), and foundations run by each of children. Since then, he has distributed Berkshire B shares valued at about US$55 billion when they were received to these organizations, Buffett said in a June 28 statement issued by Berkshire Hathaway. The Bill and Melinda Gates Foundation—where Buffett served as a board member until Gates and French Gates announced their divorce in 2021—had received US$39.3 billion through 2023, the organization’s website said.

Annual gifts to those foundations will continue until Buffett dies and his remaining assets are transferred to the charitable trust. In the June 28 statement, Buffett said his current holdings of Berkshire A shares (which he converts to B shares to make the charitable contributions) “are worth about US$127 billion, roughly 99.5% of my net worth.”

When Buffett announced his intentions for the distribution of this fortune, he said his children “were not fully prepared” in 2006 to serve as executors of his will and trustees of the charitable trust “but they are now.”

Recognising that things change and that “it’s impossible to prepare for every scenario,” is a lesson that Karger often preaches.

Currently, Karger’s firm is working with a billionaire family that wants to give all their money away to charity. “They don’t want their kids to have any,” Karger says.

So TwinFocus is trying to introduce planning techniques to “baby-step” this family’s intentions, “because some of those decisions are not reversible,” he says. “There are seasons to our lives, and we think about life differently in different seasons. You don’t want to live with a mistake that you can’t fix, especially with this level of wealth.”

Justin Flach, managing director for wealth strategy in the San Diego office of Ascent Private Capital Management, the ultra-high-net-worth division of U.S. Bank Wealth Management, says Buffett’s strategy of providing gifts to his children’s foundations since 2006 and now deciding to create a charitable trust funded by his assets that they will manage, is an established approach.

“That’s something you see very commonly with families is that as the family starts to dip its toe into philanthropy, they need to learn together and train together and make sure they’re aligned about how they want to proceed,” Flach says. “Something like this isn’t uncommon because it just shows a family adapting over time.”

Flach also encourages ultra-rich families to begin giving away wealth during their lifetime, as Buffett has done, and he sees far more of them taking this approach today. By doing so, philanthropists can experience “their full empathy” during their lifetime. It also means they can find out if their charitable strategy works or not.

“It allows them to assess [whether] the people they’re working with are the right partners,” Flach says. It also allows them to see whether those they hope to hand their charitable assets off to are “trained and ready to take over when they’re gone.”

A charitable trust—the structure that Buffett is using to absorb his wealth—is an “irrevocable” vehicle for tax purposes, meaning, the assets in the trust can’t be taken out for anything other than distributing funds to nonprofits.

In Buffett’s case, his three children “must act unanimously” when deciding where the trust’s assets will be granted, he said. They also must designate successors. Buffett indicated he isn’t placing more rules on the trust because “wise trustees above ground are preferable to any strictures written by someone long gone.”

He did say, however, that the trust will be spent down “after a decade or so,” and will have a “lean staff.”

Setting up a charitable trust, such as the one Buffett’s children will direct, serves two purposes. It “helps them fund the family’s philanthropy long after the family members have passed,” Flach says, and “there’s an estate tax deduction for gifts to charity at death. That can be a very valuable way to reduce your estate taxes.”

The trust structure is similar to a private foundation, although only a trust can be created through a will, he says. Both vehicles are treated the same for tax purposes and have the same disclosure requirements, meaning they have to tell the IRS where the money is granted and they have to distribute at least 5% of assets each year to qualified nonprofits.

Though Buffett has chosen to have his trust spent down, a family could instead create a perpetual trust that would live on through generations, Flach says.

For very wealthy families, it’s important to regularly review estate plans, including plans for charitable giving. At least every five years, documents should be reviewed to ensure past choices still make sense and can be amended as needed, Karger says.

The super wealthy, those with assets of US$100 million or more, should consider using their current lifetime gift exclusion—currently US$13.1 million per person—to create an irrevocable trust. That would allow an individual “to move assets outside of their estate [and] let them grow for the next generation estate tax exempt,” he says.

Flach agrees wealthy families should regularly assess their estate and philanthropic planning, which, depending on a family’s situation or desire, could be annually or every few years.

“Going back through and making sure that you’d make the same decisions today

that you made when you created the plan, based on the facts of what they are today,

is a really good exercise,” Flach says. “It allows you to make sure that when ultimately you do pass on, or when you’re ultimately giving to a philanthropic cause, that your wishes are truly being carried out, as opposed to what your wishes may have been 20, 30, 40 years ago.”

Reporting season has once again reminded investors that a strong profit does not guarantee a rising share price, and a large loss does not always trigger a sell-off. What matters most is how each result compares with expectations and, increasingly, what management says about the year ahead. During the August 2026 season, companies offering credible turnarounds or unexpectedly strong guidance were rewarded handsomely, while those flagging weaker margins, slowing demand or greater uncertainty were punished.

The following ranking draws on Morningstar’s review of 164 ASX-listed companies and measures each company’s share-price movement on the day it reported. This captures the market’s immediate response to the earnings announcement, before subsequent economic developments, dividends and company-specific news cloud the picture. Here are the five biggest winners, and the five hardest-hit losers, of the season so far.

The five winners

1. Bapcor (ASX:BAP): +41.0%

Bapcor delivered reporting season’s largest relief rally after presenting early evidence that its troubled automotive-parts business was stabilising. Although underlying revenue fell 1.8% to $1.92 billion and underlying NPAT collapsed 85% to $10.8 million, underlying EBITDA of $152.5 million exceeded guidance.

More importantly, working-capital initiatives released $68.5 million in the second half, lifting cash conversion to 109.4% and reducing net debt by 63% to $135 million. The statutory loss was $431.6 million, largely because of non-cash impairments. Investors focused on improving operational momentum, stronger liquidity and management’s expectation of modest FY27 revenue growth.

2. Zip Co (ASX:ZIP): +18.2%

Zip comfortably surpassed its FY26 targets, sending the buy-now-pay-later provider’s shares sharply higher. Transaction volume rose 23% to $16.7 billion, while cash earnings before tax, depreciation and amortisation jumped 58% to a record $268.9 million. Statutory profit climbed 46% to $116.4 million, and the cash operating margin expanded by 4.2 percentage points to 20%.

The strongest signal was guidance for FY27 cash earnings of $340 million—around 26% growth and above analysts’ forecasts. US transaction volume increased 42.5% and now represents three-quarters of group volume, offsetting weaker customer activity in Australia.

3. CSL (ASX:CSL): +17.3%

CSL’s result was hardly spectacular in isolation, but it cleared a market bar that had fallen dramatically following earlier downgrades and restructuring announcements. Underlying NPATA was US$3.1 billion, down 2% in constant-currency terms, while operating cash flow reached US$3.51 billion.

CSL maintained its full-year dividend at US$2.92 per share and completed a A$1 billion buyback. The real catalyst was FY27 guidance for approximately 5% underlying profit growth, compared with market expectations closer to 2%. After an extended period of earnings disappointments, investors interpreted the outlook as evidence that CSL’s core plasma business was approaching a sustainable recovery.

4. Judo Capital (ASX:JDO): +16.9%

Judo Capital demonstrated strong operating leverage as its specialist business-lending franchise expanded. Full-year profit before tax rose 34% to $168.1 million, while pre-provision profit increased 42%. Gross loans and advances grew 18% to $14.7 billion, reaching the top of the bank’s guidance range and comfortably exceeding broader system growth.

Deposits increased 24% to $12.2 billion, return on equity improved by 1.1 percentage points to 6.4%, and earnings per share rose 29% to 9.9 cents. Reaffirmation of the FY27 outlook gave investors confidence that loan growth could continue without sacrificing margins or credit quality.

5. Super Retail Group (ASX:SUL): +15.8%

The owner of Supercheap Auto, rebel, BCF and Macpac reported record sales of $4.2 billion, up 3.2%, despite cautious discretionary spending. Profitability went backwards: normalised profit before tax fell 7% to $306 million and normalised NPAT declined 2.8% to $226 million as transformation spending weighed on margins. Nevertheless, the result exceeded subdued expectations, online sales grew 5.3% and membership across the group’s loyalty programs reached 13.1 million. Investors were also encouraged by positive early FY27 trading, stable gross margins and continued market-share gains. A fully franked 33-cent final dividend added to the appeal.

The five losers

1. Hansen Technologies (ASX:HSN): –21.2%

Hansen’s historic result met expectations, but investors recoiled from its outlook. The utility and communications software provider achieved an underlying EBITDA margin of 31%, exceeding its 30% target, while generating strong cash flow. However, management designated FY27 an “investment and transition year”, signalling a roughly five-percentage-point margin contraction as spending on products, sales capabilities and organisational changes increased.

Revenue had already been broadly flat, leaving investors concerned that the investment program would depress earnings before new growth appeared. Leadership changes, including the chief executive’s departure, added uncertainty. Management expects revenue growth and margins above 30% to return in FY28, but the market was unwilling to wait.

2. Life360 (ASX:360): –19.4%

Life360’s headline growth was impressive: quarterly revenue rose 38% to US$159 million, subscription revenue increased 31%, and adjusted EBITDA climbed 53% to US$31.1 million. Monthly active users reached 102.4 million and paying circles grew 27% to 3.2 million. The sell-off reflected expectations rather than a collapsing business.

Net income fell 18%, the net margin contracted from 6% to 3%, hardware shipments dropped 18%, and full-year EBITDA guidance was merely maintained. After a strong valuation run, investors wanted a larger upgrade and clearer evidence that heavy investment in advertising, international expansion and artificial intelligence would generate additional earnings.

3. PEXA Group (ASX:PXA): –17.0%

PEXA reported a 7% increase in continuing-operations revenue and 12% EBITDA growth to $152 million, accompanied by a two-percentage-point margin expansion. Free cash flow increased 39%, suggesting the core Australian electronic-conveyancing platform remained highly profitable. Investors instead concentrated on management’s warning that property-transfer volumes could decline, alongside regulatory uncertainty surrounding the fees PEXA can charge.

The company is also continuing to invest heavily in its loss-making international expansion. Morningstar considered the market reaction excessive, arguing that structural transfer-volume assumptions had not materially changed, but the combination of softer near-term activity and regulatory risk overwhelmed the respectable headline numbers.

4. SEEK (ASX:SEK): –14.3%

SEEK produced solid FY26 figures, including 10% revenue growth to $1.20 billion, a 15% rise in EBITDA and 28% growth in adjusted earnings per share. It also lifted its fully franked annual dividend by 13% to a record 52 cents. Those achievements were overshadowed by falling paid job-ad volumes and cautious FY27 assumptions.

The statutory accounts included a $201 million loss from the SEEK Growth Fund and $377 million of significant items, making the headline result considerably less attractive. Investors were particularly concerned that economic weakness could limit volumes while the company continued investing in platform integration and artificial-intelligence products.

5. JB Hi-Fi (ASX:JBH): –12.3%

JB Hi-Fi’s full-year result was broadly respectable, with group sales rising 5% to $11.1 billion and underlying earnings per share increasing 6% to $4.48. The damage came from its current-trading update. Australian sales were almost flat during the June quarter and deteriorated further in July, while earnings in the core Australian electronics business fell 3.6%.

Housing-related categories were particularly weak as higher living costs and interest rates constrained household budgets. With JB Hi-Fi entering the season on a demanding valuation, an in-line historic result was not sufficient: the loss of sales momentum prompted investors to rapidly reduce their expectations for FY27.

Overall, the season showed that share prices react less to whether profits rose or fell than to the gap between results and expectations. Bapcor was rewarded for being less troubled than feared, while several fundamentally profitable companies were punished because their outlooks failed to justify elevated valuations.