Thursday, December 03, 2015

No, Mark Zuckerberg didn't give all his money away to "charity"

He just created a tax shelter/investment vehicle which moves him into a slightly different realm of venture capital.
An LLC can invest in for-profit companies (perhaps these will be characterized as societally responsible companies, but lots of companies claim the mantle of societal responsibility). An LLC can make political donations. It can lobby for changes in the law. He 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.”

What’s more, a charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg LLC won’t be subject to those rules and won’t have any transparency requirements.

In covering the event, many commentators praised the size and percentage of the gift and pointed out that Zuckerberg is relatively young to be planning to give his wealth away. “Mark Zuckerberg Philanthropy Pledge Sets New Giving Standard,” Bloomberg glowed. Few news outlets initially considered the tax implications of Zuckerberg’s plan. A Wall Street Journal article didn’t mention taxes at all.

Nor did they grapple with the societal implications of the would-be donations.

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