Warren Buffett’s collaboration with Bill Gates to promote a “Giving Pledge” by billionaires of half of their fortunes to charity is the second public leg of an extraordinary philanthropic journey by the world’s most admired and resourceful investor. On the first leg, Mr. Buffett promised to liquefy annually 5 percent of the value of a designated pool of Berkshire Hathaway B shares (then valued at $30.7 billion) and direct the proceeds through the Bill and Melinda Gates Foundation for the duration of the active lives of that foundation’s founders. Now three years hence, on the second leg, he and his long-time associate Bill Gates have ascended their bully pulpit exhorting other billionaires to follow their lead and make their own massive commitments to charity.

That Mr. Buffett is willing to take this journey so publicly is a wonderful, highly portentous, development. Thus far, he has rejected the establishment of a mammoth, endowed “Warren Buffett Foundation” memorial to himself, using instead the good offices of an existing grant-making institution to effect his philanthropy. He has committed the vast preponderance of his fortune, 99 percent, to charity. He has shown a willingness to use his unassailable reputation and vast influence to effect similar behavior among mega-wealthy peers. Finally and most significantly, but effectively buried within his less publicized personal “pledge”, Mr. Buffett has promised that his entire charitable commitment will be expended within 10 years of his death, not preserved in a perpetual endowment.

The principal messages of the first two legs of Mr. Buffett’s philanthropic journey—billions of dollars to the Gates Foundation and the appeal to fellow billionaires—are stunning in their dimensions. Yet we are left holding our breaths, hoping to see him travel at least one more leg—one that is remembered for its comprehensive, truly game-changing, narrative. For stunning as they are, the principal prescriptions of the two legs are still less than we must now expect from Mr. Buffett. They seem at once too casual, abstract and imprecise to be the final word the man who—over many years with assiduous attention to detail and preternatural understanding of the workings of the most effective market-making and investing intermediaries—built history’s greatest investment fortune. Philanthropy needs the maestro’s full attention and the same analytical acuity he brings to the investment business.

He will bring together insights and experiences garnered from the first two legs and a lifetime in the investment world

And for this, we have reason to be hopeful. To be fair, the first two legs of Mr. Buffett’s journey provide ample foreshadowing of greatness. You can sense that truly ground-breaking thoughts are percolating in his mind. As he permits himself the time and mental space to address philanthropy more intentionally, the opportunity to deploy his own experience and analytical instincts to improve society will become clearer to him. I predict that the omniscient Oracle of Omaha will embark upon a decisive third leg. He will bring together insights and experiences garnered from the first two legs and a lifetime in the investment world to assert more forcefully that it’s the way we conduct philanthropy, not just its quantity, that needs to be improved. He will put forward a cohesive narrative having elements of, but likely going far beyond, the following foreshadowed arguments:

Wealthy people generally, not just billionaires, should give generously.

The Buffett-Gates “Giving Pledge” campaign asks billionaires to give 50 percent of their wealth to charity, contending implicitly that retaining half of these great fortunes clearly exceeds what they or their heirs can productively or even profligately expend during their lifetimes. If each billionaire were to do so, Mr. Buffett calculates, an additional $600 billion would find its way to philanthropy. But this “excess” wealth of billionaires, great as it is, is dwarfed by the cumulative “excess” wealth of multi-millionaires. And while billionaires can help till the soil for a full-flowering of philanthropy, the greater population and resources of multimillionaires represents the mother lode.

Figure out the maximum amount of wealth you need to support your chosen lifestyle and that of your heirs (as such requirements exist today and in the event of any conceivable rainy day) and find an effective way to give away the excess charitably.

Ironically, there is some danger that the second leg’s 50 percent Giving Pledge guidance could unwittingly establish an unnecessarily low ceiling for giving. Indeed, what’s so magical about a 50 percent standard when it leaves so much unnecessary and excess wealth in the hands of billionaires? And what’s the logic of encouraging a wealthy person with $20 billion to hold on to $10 billon and when you ask a person with $2 billion to “get by” with $1 billion? Frankly the proposition is intrinsically nonsensical as the current wealth of the centamillionaires and up is so unfathomable, so far beyond what anyone could possibly need or spend.

Isn’t it more logical to establish a minimum “Giving Pledge” that equals all wealth that exceeds the amount necessary to cover current and imagined future requirements of wealthy people and their heirs? This is the simple but compelling question that Claude Rosenberg asked in his 1995 book, Wealthy and Wise. Calculated in this way, and expressed as a percentage of wealth, the average Giving Pledge for a centamillianaire or billionaire would significantly exceed 50. For his part, Mr. Buffett has already adopted this more sensible standard, committing to give away 99 percent of his personal estate. On the third leg of his journey, he will prescribe a public standard analogous to his own.

Give now to address current needs

The most important philanthropic insight Mr. Buffet has made to date is found within his personal “Giving Pledge” statement. Here he writes “at the latest, the proceeds from all of my Berkshire shares will be expended for philanthropic purposes by 10 years after my estate is settled. Nothing will go to endowments; I want the money spent on current needs.” This is no idle personal preference. It reflects our greatest investor’s recognition that philanthropic funds should be deployed and problems solved now rather than be left to fester in hope of future remediation. He further recognizes that society and its economy continuously regenerate philanthropic capacity to serve future needs, so there is no need to warehouse philanthropic funds in endowments. With respect to giving now rather than waiting, Mr. Buffett says implicitly that when (1) all of our citizens are well educated, (2) our environment and climate preserved, (3) our physical and electronic infrastructure updated and equitably accessed, and (4) the disadvantaged denizens of our interconnected world are valued and empowered—our children will enjoy a happier, productive and more sustainable future. The time to give the money to get it right is now.

Avoid creating more perpetual private foundations

Because giving should occur now, the creation of new foundations with the predisposition to institutionalize perpetuity should be avoided as a strategy. This argument could be assumed from the foregoing arguments. But because so many new philanthropists default to longstanding convention and, with little creative thought, establish private foundations, it requires emphasis. While many do great work, all private foundations do less than they could because they ignore the cost to society of postponing their grant-making. And because they need nothing from the outside and answer to no one, especially after the passing of their founders, they become fundamentally unaccountable, both externally and internally. Though Warren Buffett gives vast amounts annually through the Gates Foundation, he has established terms for his gifts that ensure Gates operates as an intermediary re-grantor, not an endowed destination. Mr. Buffett knows that his legacy will be a stronger, better educated, and healthier global society, rather than an immense perpetual foundation memorializing his name.

Engage personally and strategically

With respect to philanthropy, it is not enough to give now, you should also give using your personal judgment with strategic intent. The makers of great fortunes are often creative, energetic and resourceful developers of institutions and solutions. Their enterprising attributes are as critically needed in the social sector as they are in business. Further, these same people are often great investors presumably able to pick winners from among hundreds of thousands of charities and institutional grant-makers. Society has as much to gain from the minds as it does from the money of new philanthropists. Granted, the extent to which Mr. Buffett contributes his personal judgment in his philanthropy or merely piggy-backs on the existing strategies of the Gates Foundation is uncertain. By the third leg, his intellectual contributions to Gates Foundation grant-making interventions will be very clear.

Rather than establishing a new institution, consider giving through intermediaries, maybe multiple intermediaries, and demand accountability

In looking for the most effective ways to intervene philanthropically, don’t assume that you need to do it alone or establish your own staff or institutional capability. There are literally thousands of grant-making institutions and intermediaries addressing hundreds of causes using all manner of objectives and strategies. Whether they know it or not, each existing philanthropic initiative could use new allies, additional resources and fresh ideas. Consider conducting philanthropy in collaboration with or through an existing institution. When you give in this way, you will not only lever existing work, you will add a significant element of accountability to the grant-making process.

In this respect, despite Mr. Buffett’s stunning decision to give a fortune through an existing institution, one has to wonder how much more ground-breaking the event would have been if he’d announced a tender seeking multiple grant-makers to allocate his $1.5 billion annual commitment of funds. Would it have been more effective toanointmultiple institutions to distribute an annual grant-making budget of this size? Further, foundations often talk about ineffective nonprofits that care little about identifying or quantifying their impact. Yet, foundations themselves are seldom, if ever, called to account for their own performance. So what would happen if Mr. Buffett had tendered for grant-making contracts with multiple institutions or had made a short, rather than long-term, commitment to the Gates Foundation? Similarly, and more generally, what if foundation program officers had to account for effective grant-making performance to attract new external capital necessary to support each grant-making cycle? On his third leg, Mr. Buffett will contend that these types of “market” dynamics and resulting discipline within institutional philanthropy will be cathartic and enormously beneficial for society.

Arguably, Mr. Buffett could have done more in this respect when he committed the proceeds from his fortune to Gates. At a minimum, though, he has pointed the way. And you can bet that Warren Buffett’s involvement has raised the performance expectations and reporting requirements for the Gates Foundation grants program. Rather than establish private foundations, new wealthy philanthropists should follow Mr. Buffett’s lead and identify, invest through and demand accountability from best existing philanthropic initiatives (be they programs of private foundations or other intermediaries). But in this, somewhat revised, message from the third leg of his journey, Mr. Buffett will advise new philanthropists to not put all their eggs in one grant-making basket.

Don’t automatically conduct all of your philanthropy through grants to charities; investigate the funding of other vehicles to achieve social progress

Charities have no monopoly as agents of social progress. Arguably, many businesses of various kinds contribute as much or more to a healthy society. Without question, one’s definition of social progress reflects his or her own personal values, and society’s own culturally or politically-determined values evolve over time. Further, the most effective way to achieve desired results may require the participation of for-profit businesses, and lines between these institutional forms are blurred further when traditional charities take on the attributes of for-profit businesses in order to “sustain” their operations. New philanthropists operating across the spectrum of causes appear unconstrained by nonprofit sector conventions. They choose multiple institutional forms to receive their “social investments.” This is a good development. New very wealthy philanthropists must be conscious of, even embrace, these dichotomies. They should respect the need to preserve the traditional nonprofit form in our society but be always open to the most effective means to promote entrepreneurism and social progress. On his third leg, Mr. Buffett will surely highlight the value of entrepreneurial innovation, corporate form hybrids and double-bottom line social investing.

The prediction above is drawn from indications in his writings and commitments to date. But we cannot know exactly what Warren Buffett will come up with next. My hope is that he surprises us with ideas more audacious than those catalogued here. But whatever else happens, on the third leg of his philanthropy journey, he will exhort us to engage our wealth, better instincts, aspirations and creativity to improve society in ways and to an extent that substantially surpasses the historic philanthropic record of this most philanthropic of nations. The full narrative of the third leg will likely be more complex than the simplified prescriptions of the first two. Happily Mr. Buffett has the stature and ability to communicate complexity compellingly. At its core, however, his message will resonate in crystal clarity—reject the notion that those with the largest bank accounts, most toys or, even, biggest private foundations at death win the game. Instead our greatest legacy must be the quality of the world we leave behind for our children. Establishing an educated, empowered, healthy, and sustainable society today is a far better endowment for the future than that of the biggest private foundation imaginable.