Mark Zuckerberg while announcing the birth of his daughter 'Max' on Tuesday 01 December 2015 said he and Pricilla would give away 99% of their wealth $45 billion to charity.
Questions have been raised as to why Chan Zuckerberg Initiative whose mission is to Advance human potential and promote equality in areas such as health, education, scientific research, and energy is a Limited Liability Company, LLC, and not the conventional nonprofit. The New York Times did an Article on it titled 'How Mark Zuckerberg's Altruism Helps Himself'.
Though an LLC can also function as a foundation in most states in the US, Unlike the Gate and Melinda Foundation, Chan and Zuckerberg Initiatives may not enjoy Donations, grants, and Tax Exempt. It will however enjoy the major advantages of little or no restrictions on ownership, the ability to form a small board, and no regular meetings requirement.
While it's healthy and necessary to be critical of the donations, there is no doubt that Zuckerberg's motivation to give away 99% of their wealth is born from a desire to positively impact the world. They have demonstrated this by giving away almost $1.5 Billion in the last few years.
The only drawback and concern is that most of their donations have so far gone to tech-focused organizations with strong ties to Silicon Valley. Unlike the Gate and Melinda Foundation which is focused on fighting poverty and diseases across the Globe.
In a post on Thursday 03 December 2015, Zuckerberg replied to the criticism.
Questions have been raised as to why Chan Zuckerberg Initiative whose mission is to Advance human potential and promote equality in areas such as health, education, scientific research, and energy is a Limited Liability Company, LLC, and not the conventional nonprofit. The New York Times did an Article on it titled 'How Mark Zuckerberg's Altruism Helps Himself'.
Though an LLC can also function as a foundation in most states in the US, Unlike the Gate and Melinda Foundation, Chan and Zuckerberg Initiatives may not enjoy Donations, grants, and Tax Exempt. It will however enjoy the major advantages of little or no restrictions on ownership, the ability to form a small board, and no regular meetings requirement.
While it's healthy and necessary to be critical of the donations, there is no doubt that Zuckerberg's motivation to give away 99% of their wealth is born from a desire to positively impact the world. They have demonstrated this by giving away almost $1.5 Billion in the last few years.
The only drawback and concern is that most of their donations have so far gone to tech-focused organizations with strong ties to Silicon Valley. Unlike the Gate and Melinda Foundation which is focused on fighting poverty and diseases across the Globe.
In a post on Thursday 03 December 2015, Zuckerberg replied to the criticism.
I want to thank you all for your heartwarming congratulations on Max's birth and on starting the Chan Zuckerberg Initiative. This whole community has been so loving and supportive.
If you're interested in following the philanthropy work we're doing with the Chan Zuckerberg Initiative, I encourage you to like the page here:
https://www.facebook.com/chanzuckerberginitiativeSince we announced this a couple days ago, many people have asked about what we're planning to focus on and how we're structuring our work.
Our initial focus areas are personalized learning, curing disease, connecting people, and building strong communities. We've already made many investments over the past five years in these areas -- education, science, health, internet access, and inclusion -- and you can see a summary of our investments on the Chan Zuckerberg Initiative page timeline.
The Chan Zuckerberg Initiative is structured as an LLC rather than a traditional foundation. This enables us to pursue our mission by funding non-profit organizations, making private investments, and participating in policy debates -- in each case with the goal of generating a positive impact in areas of great need. Any net profits from investments will also be used to advance this mission.
By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain the flexibility to execute our mission more effectively. In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC.
What's most important to us is the flexibility to give to the organizations that will do the best work -- regardless of how they're structured. For example, our education work has been funded through a non-profit organization, Startup: Education, The recently announced Breakthrough Energy Coalition will make private investments in clean energy, and we also fund public government efforts, like the CDC Ebola response and San Francisco General Hospital.
We'll have more to share soon, and if you want more information I recommend liking the Chan Zuckerberg Initiative page.
Thanks again for all of your support and interest. This community has been amazing and we're excited to get started on this work together when we're back from parental leave!
