Mark of a model billionaire
99% shares for charity
- Published 3.12.15
San Francisco, Dec. 2: Mark Zuckerberg, the co-founder and chief executive of Facebook, announced on Tuesday that he and his wife would give 99 per cent of their Facebook shares "during our lives" - holdings currently worth more than $45 billion - to charitable purposes.
The pledge was made in an open letter to their daughter Max, who was born about a week ago.
Zuckerberg and his wife Priscilla Chan said they were forming a new organisation, the Chan Zuckerberg Initiative, to manage the money, through an unusual limited liability corporate structure.
"Our initial areas of focus will be personalised learning, curing disease, connecting people and building strong communities," they wrote.
Zuckerberg's charitable plans are the latest indication of a growing interest in philanthropy among Silicon Valley's young billionaires, who unlike previous generations of business tycoons appear eager to spread their wealth while they are still young. Zuckerberg is 31 and Chan is 30.
Yet they are entering largely uncharted waters with a charity effort of such scale. They have not yet detailed how the money will be spent, and the pace at which the money will be given out indicates they plan to take their time.
The couple have had mixed results in earlier charitable efforts.
In 2010, Zuckerberg and Chan gave $100 million to improve the public schools in Newark. The money expanded high-performing charter schools but encountered fierce resistance from many parents, community activists and unions. Zuckerberg has said he learnt a lot from the experience.
Still, Larry Brilliant, who works on philanthropic issues with many Silicon Valley figures, said the scale and timing of Zuckerberg's commitment, coming so early in his career, were rare.
"I hope this will be a model for Mark's generation," said Brilliant, a physician who also previously ran Google's charitable arm, Google.org.
The Silicon Valley way of philanthropy also demands more control over where the money is spent, though it remains to be seen if this hands-on formula will be successful.
By using a limited liability company instead of a non-profit corporation or foundation, the Zuckerberg family will be able to go beyond making philanthropic grants. They will invest in companies, lobby for legislation and seek to influence public policy debates, which non-profits are restricted from doing under tax laws.
A spokeswoman for the family said that any profits from the investments would be ploughed back into the Chan Zuckerberg Initiative for future projects.
In a securities filing, Facebook said Zuckerberg planned "to sell or gift no more than $1 billion of Facebook stock each year for the next three years".
He intends to retain his majority voting position in the company's stock for the foreseeable future.
Zuckerberg was this week one of the billionaires who signed on to the Breakthrough Energy Coalition, a group organised by Microsoft co-founder Bill Gates to contribute towards a multibillion-dollar clean energy fund.
Zuckerberg has referred to Gates as one of his childhood heroes. Gates is the world's wealthiest person, with an estimated worth of $85.2 billion. Zuckerberg's total worth is estimated to be $46.8 billion.
Zuckerberg has admired Gates's philanthropic endeavours too, becoming one of the first people to join the Giving Pledge, an initiative started by Gates and Warren E. Buffett to get rich people to give away more than half their wealth to charities during their lifetimes or after. Gates has pledged to give away at least 95 per cent of his wealth.
"None of this would have happened without Bill Gates," Brilliant said.
In a statement, Gates and his wife Melinda congratulated Zuckerberg and Chan.
"The example you're setting today is an inspiration to us and the world," they said. "We can be confident of this: Max and every child born today will grow up in a world that is better than the one we know now."
Zuckerberg and Chan had previously pledged about $1.6 billion to charitable endeavours, according to a spokeswoman for the family.
"Having this child has made us think about all of the things that should be improved in the world for her whole generation," Zuckerberg said in a video.
Zuckerberg and Chan have recently made visible investments and gifts in several education and health care causes.
The ultimate value of the Zuckerberg family's charitable pledge is unknown. If Facebook shares continue to rise, the value of the gift could be much higher than the current estimate of $45 billion.
Michael R. Bloomberg, former New York mayor, applauded Zuckerberg's announcement. "The only question now is: How many of his peers in Silicon Valley and beyond will join him?" he said.
THE NEW YORK TIMES NEWS SERVICE