Facebook CEO Mark Zuckerberg and his wife welcomed their new daughter, Max, into the world with an open letter promising to make the world a better place – by donating almost all of his stock in the company to charitable causes. Although such an announcement can make some well up with tears of joy at the display of charity, the specifics of this noble act are vague and open to interpretation.
In the official SEC filing, Facebook announced the details of the donation, explaining that Zuckerberg will "gift or otherwise direct substantially" all of his Facebook stock, or the net after-tax proceeds from the sale of those shares, "during his lifetime." Zuckerberg capped the stock gifting at $1 billion per year for the next three years and assured shareholders that he intends to retain his controlling stake in Facebook for the foreseeable future. Mark Zuckerberg is not just giving away all of his stock and walking away from the company. In fact, he technically isn’t giving it away.
A new charity was setup by the Zuckerbergs in honor of their daughter – the Chan Zuckerberg Initiative, LLC. This new company will receive these stock donations, and Mark Zuckerberg will retain control of those stocks. Essentially, he is funneling stock from one legal entity to another, after which the stock can be sold and the proceeds donated to "further the mission of advancing human potential and promoting equality by means of philanthropic, public advocacy, and other activities for the public good," while acting as a not-for-profit or non-profit organization.
Although this legal hoopla can be interpreted in many ways (some seem to suggest the Zuckerbergs built a tax shelter), the sentiment of the proud parents’ open letter oozes with gooey feel-good rhetoric and inspirational hope for a better tomorrow.
"We believe all lives have equal value, and that includes the many more people who will live in future generations than live today," stated the letter. "Our society has an obligation to invest now to improve the lives of all those coming into this world, not just those already here."
The letter to baby Max goes on to outline key factors that could help us reach these noble goals, providing a possible road map of where the new charity intends to focus its efforts. Investing for the long term, engaging our community to better provide for them, building technology that enables change, and listening to expert advice instead of taking on monumental problems alone are among the primary goals. However, one of the more questionable initiatives is the call for political action to influence policy and shape debates, which in itself is a perfectly reasonable statement but seems to suggest the new charity may double as a political lobbying organization. Facebook is already a part of the Washington political machine as a member of ITI, a lobby group representing companies such as Google, Microsoft, Oracle, Apple and Samsung, but doing so through the new charity may create a loophole to get possible tax breaks for these "investments."
Despite the questionable language, one thing is clear: The Zuckerbergs seem genuinely dedicated to creating a better world for not just their daughter, but future generations of all children.
“We will do our part to make this happen,” said Zuckerberg’s letter. “Not only because we love you, but also because we have a moral responsibility to all children in the next generation.”
Do it for the shorties, Mark.
Update, 12/2/15, 11:40am PT: Fixed baby's name.
Derek Forrest is an Associate Contributing Writer for Tom’s Hardware and Tom’s IT Pro. PC gaming, graphics hardware and VR devices are among his favorite topics to cover. He is a lifelong PC enthusiast, former IT administrator and a custom PC builder with a penchant for creating music, voice acting and all things geek.
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Imagine 2 billion people visiting one website every day.
Yea, facebook and sleezy APPLE which charges huge margins on products made in china with $1 an hour laborers. Then shifts all their profits to an account in ireland which only charges 2% taxes. Then people tout them as a great american company.