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Billions Donated to Charity 1245

Anonymous Philanthropist writes " Warren Buffet , the world's second-richest man, announced over the weekend that he will soon donate 85% of his entire net worth, weighing in at around $37 Billion, to charities, with over 80% of it going to the Bill and Melinda Gates Foundation. This makes it the single largest monetary donation in history."
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Billions Donated to Charity

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  • by mjmalone ( 677326 ) * on Sunday June 25, 2006 @04:33PM (#15601761) Homepage
    From A conversation with Warren Buffett [cnn.com]:

    People will be very curious, I think, as to how much your decision - and its announcement at this particular time - is connected to Bill Gates' announcement in mid-June that he would phase out of his operating responsibilities at Microsoft and begin to devote most of his time to the foundation. What's the story here?

    I realize that the close timing of the two announcements will suggest they're related. But they aren't in the least. The timing is just happenstance. I would be disclosing my plans right now whether or not he had announced his move - and even, in fact, if he were indefinitely keeping on with all of his work at Microsoft.

    On the other hand, I'm pleased that he's going to be devoting more time to the foundation. And I think he and Melinda are pleased to know they're going to be working with more resources.

    Although, it's hard to believe that the timing is entirely coincidental... especially since Bill said he'd be leaving Microsoft over the next two years, and Warren said [cnn.com]:

    With so much new money to handle, the foundation will be given two years to resize its operations.
  • $0 (Score:2, Informative)

    by MarkByers ( 770551 ) on Sunday June 25, 2006 @04:39PM (#15601780) Homepage Journal
    $0
  • Re:Nice but ... (Score:1, Informative)

    by Anonymous Coward on Sunday June 25, 2006 @04:43PM (#15601795)
    None of it, Buffett has nothing to do with Microsoft.
  • Re:No free rides (Score:5, Informative)

    by mjmalone ( 677326 ) * on Sunday June 25, 2006 @04:49PM (#15601819) Homepage
    From A Conversation with Warren Buffett [cnn.com]

    This plan seems to settle the fate, over the long term, of all your Berkshire shares. Does that mean you're giving nothing to your family in straight-out gifts?

    No, what I've always said is that my family won't receive huge amounts of my net worth. That doesn't mean they'll get nothing. My children have already received some money from me and Susie and will receive more.

    I still believe in the philosophy - FORTUNE quoted me saying this 20 years ago - that a very rich person should leave his kids enough to do anything but not enough to do nothing.

    I believe he also said that he'd be giving the remaining 15% to charity when he died. Buffett is a pretty good guy, actually.

  • by MarkByers ( 770551 ) on Sunday June 25, 2006 @04:51PM (#15601837) Homepage Journal
    CEOs frequently get only $1 per year. Steve Jobs for example. Their salary is not their largest source of income.
  • Re:In other words (Score:2, Informative)

    by MSFanBoi2 ( 930319 ) on Sunday June 25, 2006 @04:54PM (#15601852)
    Get some up to date info please... The last time that the data that page uses was SEVEN years ago. SEVEN.
  • by Kainaw ( 676073 ) on Sunday June 25, 2006 @04:55PM (#15601856) Homepage Journal
    I wish they would put the money into AI research. If it worked it would help poor people and everyone else more than anything else.

    I live in South Carolina. "Poor" and "AI" are basically the same term. I know the following sounds like a joke or a half-truth, but it isn't. Our "Education Lottery" is primarily used to fund vocational school for prisoners, ex-prisoners, and high-school dropouts. I guess it is a waste of time and money to give them a good education before they turn 18. Instead, train them for a low-paying job after they turn 18.

  • by Anonymous Coward on Sunday June 25, 2006 @04:56PM (#15601861)
    "The man who dies rich, dies thus disgraced."

    "Thus" was in the wrong place.
  • by giorgiofr ( 887762 ) on Sunday June 25, 2006 @05:01PM (#15601880)
    That's about the worst thing you could have said. Come back when you have thrown $37 billion ("scraps") at some school system or whatever you think is the best thing to save humanity from its own stupidity. THEN and only then can you talk.
    Really you should realize that what "this kind of people" wants has got *nothing* to do with you, they won't even acknowledge your presence because you're a worthless piece of... scrap. Do you really think they *care* about keeping you in line or any of the bullshit you were spewing? Geez, the arrogance. Oh and take the time to do your research before your next idiotic post on /.; the M&B Gates Foundation does not finance alcoholics and good-at-nothings - actually they are one of the few charities that DO follow up on what they finance and they withdraw funding if not satisfied with the results.
  • by Nexx ( 75873 ) on Sunday June 25, 2006 @05:08PM (#15601915)
    No, a lot of Fortune 500 CEOs get compensation packages that are in the 7-8 figures in cash, as well as stock options. Besides, with the new accounting laws that are put in place, stock options are counted as being much closer to being cash compensation than previously.
  • by koreth ( 409849 ) on Sunday June 25, 2006 @05:16PM (#15601954)
    He considered establishing (or rather, expanding) his own foundation, but after looking at what that would take, decided that giving the money to the Gates Foundation would be more effective. That's all in the article, which you might want to check out.

    The Gates Foundation is mostly funding public health initiatives of various sorts at the moment. So the FSF and EFF would probably not fare any better than they would if they tried to get money from the Red Cross or the American Cancer Society.
  • by ThePiMan2003 ( 676665 ) on Sunday June 25, 2006 @05:33PM (#15602017)
    I have some great news for you them. There is a floor amount before the government sees anything. On a federal level that floor is at $2 million. State taxes vary from state to state b ut in New York, for example, the floor is $1 million. This article [newsday.com] is one of the sources I found from a quick google search.
  • by Herkum01 ( 592704 ) on Sunday June 25, 2006 @05:42PM (#15602050)

    The typical CEO that gives himself a dollar paycheck tends to often get other compensation either stock options or executive perks.

    Warren Buffet has more money than he knows what to do with, hence while he takes $100,000 salary he does not attempt to dilute the investment of other stockholders by given himself stock options at their expense (unlike many, many other C*O's)!

  • Re:85%! (Score:5, Informative)

    by mccp ( 977696 ) on Sunday June 25, 2006 @05:42PM (#15602052)
    "Today, with a $60 billion fortune, Gates is both hated and loved. Unlike many, he has promised to contribute over 90% of his wealth to charities when the big guy calls his number." 90% of the richest man is more than 85% of the second richest man. Gates is just being more low-key about it.
  • by spune ( 715782 ) on Sunday June 25, 2006 @05:46PM (#15602060)
    Yes, assassinating union leaders. [wikipedia.org]

    Also, in several parts of India, local Coca-Cola bottlers have been known to use pesticides and other chemicals in their product Link. [wikipedia.org] Since the bottling plants distribute the coca sludge leftover from making drinks to farmers who need the organic mess to provide nutrients for overfarmed fields, the pesticides and toxins present in the drink itself are also present in the sludge in much greater qualtities. Several villiages near Coke facilities have complained of high cancer rates, abnormally high infant mortality rates, and other problems.

    As for Katrina, that was indeed a bit trollish.
  • by Anonymous Coward on Sunday June 25, 2006 @06:08PM (#15602145)
    Planned Parenthood advocates adoption foremost, although abortion is in the cards. It probably isn't the morally perfect operation, but the core mission of educating to prevent early-age/unexpected pregnancy is certainly commendable. If you've got to choose between nothing or the sort of help PP can provide, I'm pretty sure the answer is clear. That is, unless you want more unplanned events to take place, after which the young not-yet-fully-developed people can make up their own mind, with no assistance.
  • by ScentCone ( 795499 ) on Sunday June 25, 2006 @06:18PM (#15602184)
    this is only possible due to a system in which the vast majority are pushed into poverty and a tiny minority accumulate nearly all the wealth

    You're falling into the classic "the pie is only so big" trap. Do you really think that if Bill Gates and MS had never happened (likewise with, say, IBM or Sun or anyone/everyone else) that poor people would have somehow had a share of his billions in their pockets, instead? They don't call it "making" money for nothing: you do something people want and are willing to buy, and that creates demand and sets a price. Those people do the same with what they do for a living (or don't do it, if they don't produce anything, of course). The point is that vast fortunes have been made by lots of people because of MS's economic activity and innovation (yes, innovation - despite the groupthink, they do some of that, and their marketing vigor is no small bit all by itself, and is something that lots of other less-innovative companies copy, BTW). Some of that income has been earned by people like school bus drivers with some of their 401k in a mutual fund that has invested in MS's future.

    This notion that the only reason Michael Jordon is rich is because someone else is now poor... or that Michael Moore's $200M from making his silly "documentary" is money that those movie-goers would have otherwise have used to buy applesauce for starving babies... it's nonsense. No matter how much people resent successful businesses (or just what their thriftier neighbor is able to buy for not having wasted so much on stupid crap), it's usually just that: frustration at not having cowboyed up and done the same sort of work themselves, and created value where it didn't exist before. The really busy people make the pie bigger. We can split hairs over whether or not Netscape might one day have made some piece of that pie bigger than MS made it - but would you say that Netscape's early pile of cash and investment somehow made poor people poorer? Or that Red Hat does?
  • by BSDevil ( 301159 ) on Sunday June 25, 2006 @06:49PM (#15602311) Journal
    As this is Slashdot, I suppose it's too much to ask for people to RTFA [berkshirehathaway.com]...

    But if you did, you'd see that two of the conditions of the gift deal with this - specifically
    First, at least one of you [BillG or MelG] must remain alive and active in the policy-setting and administration of BMG.

    and

    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...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.

    Meaning that the gifts to the Foundation only keep going while one of the Gateses keeps running the thing, and that they have to spend all of each gift (plus 5% of whatever else they have) each year, to prevent them from keeping it.
  • Re:seriously (Score:5, Informative)

    by bagsc ( 254194 ) on Sunday June 25, 2006 @07:13PM (#15602416) Journal
    Despite having a grant of over a billion dollars it only seems to have about 20 students ?!?

    Grants are generally structured so that half of the money they make gets reinvested in the grant, and half goes out to the cause. So a $1 bil grant with professional managers might make 8% this yeat, 4% gets reinvested, and the other 4% goes out to scholarships. Obviously, $40 million should get more than 20 students a full ride, but the initial years have marketing costs and structural costs that have to come out of that 4%. The point, however, is that this grant goes on indefinately growing, and when its giving out >100 full rides a year in a couple of years, it will definitely be a major source of money to the scholarship system.

    But while it's easy to be dazzled by the sheer numbers here I'm not at all sure that I trust the B&MG Foundation to spend their money in a way that would be selected by the masses

    Sheer numbers aren't the important part of non-profits, its the management. Lots of people get into the non-profit sector thinking its not business, and without adequate budgetary and fiscal discipline. BMGF is notable because it has excellent management, and it isnt one of those charities where most of the money disappears, or is spent inefficiently. I hope you can at least respect that.
  • by batkiwi ( 137781 ) on Sunday June 25, 2006 @07:59PM (#15602597)
    You could try reading the article, or doing some research, before flapping your mouth.

    Buffet has always maintained he was going to give his entire fortune to philanthropic organizations upon his death. However, he has now moved it forward to before his death so that he can keep a closer eye on what's being done with the money.

    Either way doesn't affect his "legacy," as it was all being given away via either course.

    Your comment about objective based charities is also a bit silly, as it's quite easy for an objective charity to invent useless milestones to show progress while other charities are less constrained and thus more effective.
  • Re:seriously (Score:4, Informative)

    by Gumber ( 17306 ) on Sunday June 25, 2006 @08:10PM (#15602641) Homepage
    it also gives massive amounts to very specific areas of Washington and Oregon

    The Gates Foundation gave $ 37M in 04 and $75M in 05 out of a budget in excess of $1B to programs in the pacific northwest. This bothers you why? Because you want to make a big deal about a small thing?

    Next up, you've got a beef because Gates funded a scholarship program for groups who have long been underrepresented in american higher education.

    It only gives grants to Americans. This is despite the fact that Gates and Buffet got their money from all over the world.

    First off, its just one the grants that the Gates foundation has made to support education, and there will be others. The fact that it's targeted at students in the US really tells you nothing about the reach of the foundations educational grants program.

    Next off, most of Gates worth is due to microsoft, and a huge amount of microsoft's sales have been in the US. I think even today 1/3rd of microsoft's revenue is domestic. Even if you insist that the gates foundation pays out in proportion to where the wealth came from, that still leaves a lot to be spent in the US.

    Of course, at this point, probably 80% is being spent on global health (which mostly means the impovershed parts of the world), which means that even if all their remaining budget was spent on US educational programs, it would only be a relatively small portion of their total annual spending.

    It's run by the "United Negro College Fund", which doesn't sound particularly unbiased to me. It's a blatantly racist scheme, as their website makes clear:
    The Gates Millennium Scholars (GMS), funded by a grant from the Bill & Melinda Gates Foundation, was established in 1999 to provide outstanding African American, American Indian/Alaska Natives, Asian Pacific Islander Americans, and Hispanic American students with an opportunity to complete an undergraduate college education, in all discipline areas and a graduate education for those students pursuing studies in mathematics, science, engineering, education, or library science.
    Sorry, but whatever the statistics say, I think anybody should be able to apply regardless of background. It's just pushing some PC agenda otherwise.

    Yeah, whatever, buddy. That's blatantly racist how?

    Despite having a grant of over a billion dollars it only seems to have about 20 students ?!?
    Try a little harder. A press release from May of this year states they've given over 10K scholarships since 1999.

  • by dangermouse ( 2242 ) on Sunday June 25, 2006 @09:00PM (#15602840) Homepage
    Buffett disagrees with you, and his position makes a lot of sense.

    Maybe you should read the intervew [cnn.com], where he talks about this:

    And someone who was compounding money at a high rate, I thought, was the better party to be taking care of the philanthropy that was to be done 20 years out, while the people compounding at a lower rate should logically take care of the current philanthropy.

    But that theory also happened to fit what you wanted to do, right?

    (He laughs, hard.) And how! No question about that. I was having fun - and still am having fun - doing what I do. And for a while I also thought in terms of control of Berkshire.

    I had bought effective control of Berkshire in the early 1970s, using $15 million I got when I disbanded Buffett Partnership. And I had very little money - considerably less than $1 million - outside of Berkshire. My salary was $50,000 a year.

    So if I had engaged in significant philanthropy back then, I would have had to give away shares of Berkshire. I hadn't bought those to immediately give them away.

  • by Jah-Wren Ryel ( 80510 ) on Sunday June 25, 2006 @09:40PM (#15602960)
    One common - or at least I've encountered it a few times - criticism of the Gates foundation is their funding for AIDS medicines. Instead of funding the development of in-country production facilities to make AIDS medicines for local distribution, they fund the purchase of western manufactured medicines.

    The criticism comes from the fact that most 2nd and 3rd world countries disregard western medical patents and pay no royalties to "Big Pharma" in the West. By ignoring such patents, the same money buys signficantly more locally produced drugs than it does imported drugs from the West.

    So by purchasing drugs from the West, the Gates foundation is supporting a questionable intellectual property rights system that itself directly benefits Microsoft at the expense of the people whom the charity is suppossed to be serving.

    The obvious response that "Big Pharma" would never invest in the development of such drugs without incentives of royalties is hard to evaluate. Some would argue that there are enough patients in the West to pay for the development, and that without the charity money, the 3rd world would make no purchases anyway. But when the charity gets to be the size of Gates Foundation, it is possible (I really don't know either way) that "Big Pharma" would factor in the charitable purchases as part of the expected return on investment in new drugs.

    Whatever the case, it is at least an interesting criticism of the Gates Foundation's policies with respect to intellectual property law and Microsoft's indirect benefit.
  • by StikyPad ( 445176 ) on Sunday June 25, 2006 @10:15PM (#15603074) Homepage
    That's incorrect.

    It is now possible to use all the major organs (heart, kidneys, lungs, liver and pancreas) in transplantation and so one donor is able to help many other people. If the death happened in hospital, staff may ask for permission to use organs for transplantation. Many people find such an approach difficult in the early stages of bereavement but organs have to be removed very soon after death.

    Other organs such as corneas and heart valves can be removed anything up to 72 hours after death.


    http://www.ifishoulddie.co.uk/organ_donation.htm [ifishoulddie.co.uk]
    http://www.google.com/search?q=organ+donor+hours+% 22after+death%22 [google.com]
  • by MMaestro ( 585010 ) on Sunday June 25, 2006 @10:51PM (#15603188)
    And frankly the truth is the good Carnegie has done really have out lived the harm he did.

    Uh, not really. Carnegie's complete and utter destruction of the unions cripped industrial growth for decades due to his tactics. The lack of a minimum wage (pay wages in the CENTS per day and the Ford Model T was priced at a 'cheap' $350), the methodology of simply decreasing workers' pay instead of increasing productivity or quality (sales are down? Fire some workers while maintaining the status quo!) and his own self-proclaimed "it was necessary at the time for the growth of the nation" while creating a permanent lower working class group of people in the U.S. (Oh yeah, building libraries is real helpful at a time when child labor is commonplace.)

    Carnegie was a fool, even in retrospect. By the time his charities were felt by the masses, his company had already left its mark. Corporate intimidation and bullying was used for decades (and arguably to this day). Violence between factory owners and factory workers sparked on and off WELL into the 20th century. Unions have NEVER shaken off the image of essentially being puppet creations made by the corporations for calming the masses (unions in the U.S. are a joke compared to European counterparts and in many cases are being dismantled in some industries).

  • by Saige ( 53303 ) <evil.angela@gma[ ]com ['il.' in gap]> on Sunday June 25, 2006 @11:53PM (#15603391) Journal
    Do you have any clue what you're talking about?

    No estate taxes are paid until the estate is over $1.5 million from a single adult, and $3 million from a married couple. Anyone who has a large enough estate to get taxed is not, by any means, considered part of the "middle class", let alone poor. $1.8 million puts the estate into the top %0.05 of the nation. And then there's the fact that family farms and businesses get even more exemptions.

    Only the rich are even subject to the estate tax.

    Claiming that the estate tax affects poor and middle class folks is completely and totally a baldfaced lie.
  • by ipfwadm ( 12995 ) on Monday June 26, 2006 @12:16AM (#15603440) Homepage
    So the laptop project is the only way to "improve education and ultimately the quality of life"? Give me a break. There are plenty of other projects BMGF could fund to improve education other than the laptop one.

    I'd also argue with saying that AIDS affects only a "statistically insignificant portion of humanity". Roughly one million sub-Saharan Africans died of AIDS last year (cite [wikipedia.org] -- this site [ucsf.edu] claims two million but we'll stick with one), out of a total population of around 650 million. That's 0.154% of the population. Compare that to the United States death rate due to cancer: 0.188% (565,000 deaths [cancer.org] out of a population of 300 million). I'm sure you wouldn't say cancer affects a statistically insignificant portion of humanity.

    Even when looking at the world population as a whole, it's not all that insignificant. The industrialized nations bring down the death rate. But since the laptop-for-everyone project specifically targets third-world nations, and most AIDS deaths occur in third-world nations, it's not entirely fair to take into account industrialized nations. This makes the disease that much more significant.
  • by jeffsenter ( 95083 ) on Monday June 26, 2006 @02:20AM (#15603750) Homepage
    AIDS is destroying Africa and devastating other countries as well. Even in the richest nations such as the United States AIDS is a huge public health problem.

    Money spent on AIDS research is money well spent. AIDS drugs (from AIDS research) have done much to help people living with HIV continue to live normal or less-painful lives for many years. Drugs also have dramatically cut the transmission rate at birth (mother-child).

    Africa in particular has been damaged in terms of economics, stability, and security by the AIDS epidemic. Here is a site with AIDS rates in the adult population in Africa [prcdc.org]. Notice that for 15-49 year olds the sub-Sahara infection rate is estimated at 8.4%! Some countries have infection rates of over 20% such as Botswana, Namibia, Zambia, and Zimbabwe. Life expectancy at birth in some countries has dropped below 40 years!

    A major reason other countries do not now have such high infection rates is large, expensive national programs have been established to prevent the spread of AIDS. Here is some information about the Caribbean [avert.org] where some nations have managed to dramatically reduce HIV transmission rates by the use of new drugs. Cuba, which has a large public health apparatus, is notable in its success against HIV/AIDS.
  • by kzarling ( 748075 ) on Monday June 26, 2006 @04:03AM (#15604005) Homepage
    I, for one, welcome our chair-throwing icon overlord.
  • My comment to the ultra-wealthy who wait until they are about to die before they put their excess to good use is... "You've had 10 billion dollars for 30 years and NOW you decide to put the excess to good use?!?!?! Where the hell were you last year?"

    Over the years, Warren Buffet has been asked repeatedly in interviews why he doesn't give more to charity. His answer has always been a variation on the following, from TFA:
    As for me, I always had the idea that philanthropy was important today, but would be equally important in one year, ten years, 20 years, and the future generally.

    And someone who was compounding money at a high rate, I thought, was the better party to be taking care of the philanthropy that was to be done 20 years out, while the people compounding at a lower rate should logically take care of the current philanthropy.


    Or, to put it another way, Buffett's job for the past several decades has been to manage other people's money in ways that were far more profitable than they could manage it themselves. In his mind, every dollar that he had was actually a dollar he was managing on behalf of the charity that would get his fortune when he died.

    He acknowledges that there was self-interest in this analysis; as he puts it, he was having a great time managing Berkshire Hathaway, and didn't want to go through the "grind" of setting up a foundation that could effectively distribute his megawealth. The fact that Bill Gates had already gone through that "grind" on his behalf was part of Buffett's incentive to give away his money now.

    Another part, according to TFA, was the death of his wife Susan. Buffet says that he always figured he'd die before her, and he could trust her to give away all their wealth in an effective way. The fact that she predeceased him forced him to rethink his plan.
  • by Anonymous Coward on Monday June 26, 2006 @08:29AM (#15604662)
    You are an economic illiterate. Let me give you a simple example. You have a poor farming village where half the day is spent hauling water from a nearby river to irrigate the crops. The rest of the day is spent tilling the crops, etc. Ten men get together and decide to INVEST 2 extra hours every day to build a canal to run water from the river to the fields. When finished, the half day that used to be spent hauling water can now be spent other things. Such of the people spend it laying around. Some of them spend it tilling the crops for a wage paid by the guys who built the canal and no longer till their own crops. Maybe one of those ten guys, who, because of his investment in building the canal, sitsaround and figures out how to build a better plow so now only one person is needed to till the crops. And so on. It was the INVESTMENT that made the workers productive. How many cars would be built by "workers" if no one had invested in a manufacturing plant?

    Think dude. Take an econ class.
  • by orac2 ( 88688 ) on Monday June 26, 2006 @04:20PM (#15608223)
    The fact is, for a college educated professional (the very definition of middle class) - [150K a year is] an average salary with a decades or so experience.

    In certain industries, perhaps. But look at the salary stats for say, teachers [aft.org], or veterinarians [avma.org] (two established middle-class professions which require college educations). Way less than 150k.

    Seriously, if you think 150k is an average middle class salary, you're leading an insular existence. In fact, if you look a the historical stats [census.gov] on income from the US Census Bureau, you'll see that you're coming in at the lower limit of the the top 5 percent. Now, unless you're going to argue that only people in your income bracket are truely solidly middle class, and so redefine the problem away, you have to admit that you are, at the very least, upper middle class.
  • by barath_s ( 609997 ) <barath.sundar@g[ ]l.com ['mai' in gap]> on Monday June 26, 2006 @04:24PM (#15608253)
    The 1986 article http://money.cnn.com/magazines/fortune/fortune_arc hive/1986/09/29/68098/index.htm/ [cnn.com] is interesting.

    Additional quotes ....

    On how much to leave :

    ''enough money so that they would feel they could do anything, but not so much that they could do nothing.'' For a college graduate, Buffett reckons ''a few hundred thousand dollars'' sounds about right.

    He grants that occasionally an heir may be the most suitable candidate to manage a company but believes the odds are against it.

    Warren Buffett : ''Love is the greatest advantage a parent can give.

    Susan Buffett ... admits her father's position is tough to live with. ''My dad is one of the most honest, principled, good guys I know,'' she says. ''And I basically agree with him. But it's sort of strange when you know most parents want to buy things for their kids and all you need is a small sum of money -- to fix up the kitchen, not to go to the beach for six months. He won't give it to us on principle. All my life my father has been teaching us. Well, I feel I've learned the lesson. At a certain point you can stop.''

    The stories about Ted Turner and his dad, and the tip to live outside Lousiana were also enjoyable.

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