Mark Zuckerberg's $45 billion charitable pledge initially earned praise. But criticism is mounting as details of the announcement receive closer scrutiny.
Less than a week after Mark Zuckerberg’s latest charitable pledge, critics have pounced on the details of the Facebook chief executive’s move.
Zuckerberg announced that pledge via a letter from himself and his wife, Priscilla Chan, to their newborn daughter, Max.
Zuckerberg published the letter on his Facebook page last week:
As you begin the next generation of the Chan Zuckerberg family, we also begin the Chan Zuckerberg Initiative to join people across the world to advance human potential and promote equality for all children in the next generation. Our initial areas of focus will be personalized learning, curing disease, connecting people and building strong communities.
We will give 99 percent of our Facebook shares — currently about $45 billion — during our lives to advance this mission.
Since then, the investigative news outlet ProPublica has pointed out that the Chan Zuckerberg Initiative was formed as a limited liability corporation, or LLC, as opposed to a nonprofit organization.
Public records from the Delaware Department of State’s Division of Corporations confirm this, showing that the Chan Zuckerberg Initiative was registered with the state of Delaware as an LLC on Nov. 24.
ProPublica reporter Jesse Eisinger explains that forming an entity as an LLC rather than a nonprofit affords the entity more control over how it spends its money. For example, an LLC can invest in for-profit companies, make political donations and lobby lawmakers:
[Zuckerberg] remains completely free to do as he wishes with his money. That’s what America is all about. But as a society, we don’t generally call these types of activities “charity.”
According to the Chan Zuckerberg Initiative’s Facebook page, its mission is to “advance human potential and promote equality in areas such as health, education, scientific research, and energy.”
But Gabriel Zucman, an assistant professor of public economics at the University of California, Berkeley, tells CBS News that “promoting equality starts with paying one’s taxes,” yet Facebook shifts billions of dollars of profits to tax havens like the Cayman Islands.
“If billionaires are free to choose how they contribute to society, why shouldn’t I? Why do I have to pay taxes?” asked Zucman, who criticized the stance taken by Zuckerberg and other Silicon Valley billionaires as harming the social contract and very goals he “pretends to pursue in his letter.”
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