Mark Zuckerberg Explains Why He’s Not Giving His Facebook Billions to Charity

Some time ago this week, Mark Zuckerberg gave us a jolt surprise when he announced that he, together with his wife Priscilla Chan, would embark on donations of 99 percent of their Facebook shares — worth around $45 billion — to the causes of “advancing human potential” and “promoting equality.”

mark zuckerberg

The gesture appeared so humanitarian, but then it has not lacked criticism as to the way Zuckerberg is making use of the money, splashing it to a limited liability company rather than a charitable foundation.

Now Zuckerberg thrown back his response to those complaints, posting another message that strives to bring in explanation as to why he set up the Chan Zuckerberg Initiative, and what intention he and his wife share as regards how to spend the money: “The Chan Zuckerberg Initiative is structured as an LLC rather than a traditional foundation,” he writes. “This enables us to pursue our mission by funding non-profit organizations, making private investments and participating in policy debates.” Quite different from limited liability companies, charitable foundations have their limitations as to making investment in for-profit businesses as they cannot get involved in political lobbying, activities that the Facebook founder said the Chan Zuckerberg Initiative was planning to do in order to advance the development of humanity.


Others have selflessly brought in suggestions that the Initiative is a massive tax avoidance device, with the details that by gifting shares rather than cash, Zuckerberg would get around paying higher costs in capital gains tax.

He had supposedly put this concern to rest by explaining stating that “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 flexibility to execute our mission more effectively.” Zuckerberg said that if his intentions were to avoid tax, he could’ve simply set up a charity. “If we transferred our shares to a traditional foundation,” he wrote, “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.”


One thing then that Zuckerberg might find to keep down is the criticism that he was being wasteful with the money — most particularly, that Facebook’s billions would be used to advance his own Silicon Valley-shaped worldview rather than presented as donations to a charity that already has been functioning in place in improving the world. At the moment of its foundation, The Chan Zuckerberg Initiative’s intentions were kind of vague in character — advancing humanity and enhancing equality without a distinct roadmap for either goal — but they’re already beginning to take form.

Zuckerberg used his latest post to drag the needed attention to the target of the Initiative, choosing “personalized learning, curing disease, connecting people, and building strong communities” as places it will first spend its money. These four areas are again broad, but Zuckerberg picked out specific examples of where he has spent money before, listing accomplishments.

“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.”

Again justifying the decision to use an LLC rather than a charitable foundation, Zuckerberg said “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.”

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