To remember, his wife Priscilla Chan and Zuckerberg declared their plans for the new charitable organization after formally becoming parents, declaring the arrival of their daughter Max. But the couple didn’t put out the news until Tuesday, when Zuckerberg posted it on Facebook, of course [pictured].
Advertisement
Yet, instead of a straightforward non-profit organization, the initiative is a Limited Liability Company (LLC) which acts somewhat like every business organization.
“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”, wrote Zuckerberg, according to The Guardian.
“They acknowledged that it takes time to become good at something as hard as effective philanthropy”, said Phil Buchanan, president of the Centre for Effective Philanthropy. “They want the most flexibility and they are going to use a wide variety of activities to achieve their mission”, Rachael Horwitz, a Facebook spokeswoman, said via email.
Amir Pasic, dean of Indiana University’s Lilly Family School of Philanthropy, drew parallels between these modern-day philanthropists and those from the earlier Gilded Age, roughly a century ago, when the Carnegie, Ford and Rockefeller families pioneered a new type of charitable foundation. Depending on how much of the new effort is devoted to lobbying, it could raise new questions about the influence of money in today’s politics, some experts said. They added: “We must make long term investments over 25, 50 or even 100 years”. In this letter, the Zuckerberg couple note that in technology lies the solution to find evils across fields. However with the backing of Facebook’s founders, the scale and impact potential of this initiative is massive and hence the world waits to watch eagerly how this will pan out. He and Chan made their first high-profile donation in 2010 with US$100 million to improve Newark public schools.
In a statement, Facebook said the couple’s plan to transfer their shares over time won’t affect his status as controlling shareholder of the company.
Advertisement
Zuckerberg said he will invest up to US$1 billion of his shares each year over the next three years into the initiative. The couple stated, “Max, we love you and feel a great responsibility to leave the world a better place for you and all your children”.
