Mark Zuckerberg Will Donate 99% of His Net Worth – But Is It Really for a Charitable Trust?

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How do you donate to charity? For Facebook founder, Mark Zuckerberg and his wife, it is donating 99 percent of their net worth. It was described in an open letter to their baby girl. But there is a twist on this charitable pledge.

Mark Zuckerberg Will Donate 99% of His Net Worth – But Is It Really for a Charitable Trust?

Mark Zuckerberg Will Donate 99% of His Net Worth – But Is It Really for a Charitable Trust?

The charitable foundation that Mark and Priscilla set up is not entirely a charitable trust. Rather, it is a limited-liability corporation. Some of those in the tech and media community criticized the structure as making the announcement charitable when it is not entirely the case.

However, LLC allows Facebook co-founder to perform things that charitable cannot do. This makes the foundation more effective and offers benefit to the Zuckerberg family.

But Zuckerberg is not the only billionaire who is using such structure to make things happen. The widow of Steve Jobs, Laurene Powell Jobs has an LLC foundation. It is the flexibility of the structure that makes all things appealing.

As to why?  Companies can make investments for profits and have political donations. But charitable trusts cannot report their political donations.

According to Zuckerberg, the amount of money earned by the foundation will be put to good use, i.e. into charitable efforts.

There are several likeable things about LLC today. First, you can act and react to create change. Second, you can make an investment politically in the for-profit and non-profit sector, simultaneously.

Previously, Zuckerberg’s charitable attempts were under fire because they were poorly structured.

Five years ago, he donated $100 million to the public school system of Newark to improve education success rates. However, critics are saying that most of the money donated was given to consultants and the donation did not improve the school system.

This might be the reason Zuckerberg decided to make his own LLC foundation, instead of having a typical trust.

With LLC, he can control how and where his money is used. Another reason he wanted it that way is for his desire to maintain control on Facebook, even if he gives away most of his shares.

Part of the announcement made by Zuckerberg was that he wanted to control Facebook for a very long time.

The document about his charitable effort promises not to donate more than $1 billion a year to his foundation for three years. He also intends to retain his voting position in the stock in the next few years.

What makes him different from Bill Gates?

Mark is much younger than Bill when he started doing a charitable donation. Bill and his wife set up their foundation when he was 42, i.e. when he is near the end of his term as CEO. With Mark, he is not showing signs of stepping aside to focus on charitable donations, just like Gates is doing.

Donating to charity is not new in the Silicon Valley. Tech billionaires committed to giving away most of their net worth.

Currently, Facebook’s value is $45 billion. This is more than enough to create a large US foundation. Mark and Priscilla also started a coalition with Microsoft co-founder to invest in energy solutions that are sustainable.

What do you think of Mark Zuckerberg’s effort? Please let us know in the comments below.


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Author: Jane Danes

Jane has a lifelong passion for writing. As a blogger, she loves writing breaking technology news and top headlines about gadgets, content marketing and online entrepreneurship and all things about social media. She also has a slight addiction to pizza and coffee.

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