Mark Zuckerberg defends giving 99% of his Facebook shares to a company and not to a charityComments Off on Mark Zuckerberg defends giving 99% of his Facebook shares to a company and not to a charity
Mark Zuckerberg has defended his decision to give away 99% of his Facebook shares to a private company rather than directly to charity.
Earlier this week the 31-year-old announced he would pledge $45 billion worth of shares in the social media giant to the Chan Zuckerberg initiative.
The legal entity, named after himself and his wife, Prescilla Chan, is dedicated to “advancing human potential” through personalised learning, curing disease, connecting people and building strong communities.
The vehicle is not a charity, but a limited liability company (LLC) owned and controlled by Zuckerberg.
As such, the Chan Zuckerberg Initiative can spend its money on whatever it wants – including private, profit-generating investment.
Its first investments have been in education technology, an area closely aligned with Facebook’s mission to connect people.
In a post on Facebook, Zuckerberg said that the decision to register as a company gave the Chan Zuckerberg Initiative more flexibility.
“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,” he said.
Zuckerberg said that creating the entity this way means they miss out on tax benefits conferred to traditional foundations.
They will also pay capital gains taxes when their shares are sold by the LLC.
“Any net profits from investments will also be used to advance this mission,” Zuckerberg added.
The full statement is available online.