The great Facebook giveaway - how will it work?
2 December 2015
So Facebook founder, Mark Zuckerberg is funding what should turn out to be one of the world's most well-endowed charitable organisations, the Chan Zuckerberg Initiative, with the aim of "advancing human potential and promoting equality for all children in the next generation". He's very rich indeed and he's promised to give away almost all of his shareholding in the Facebook business he created. Facebook told US company regulators the total sum promised is $45bn (PS30bn). Initially he's pledged $1bn a year for the next three years. After that the time frame is vague. There's no doubt it's generous though as the total promised is 99% of his Facebook stake. By way of context, the UK as a whole donates PS10bn a year to charity. Big, big things: They say: "It's a world where our generation can advance human potential and promote equality - by curing disease, personalising learning, harnessing clean energy, connecting people, building strong communities, reducing poverty, providing equal rights and spreading understanding across nations. "We are committed to doing our small part to help create this world for all children. We will give 99% of our Facebook shares - currently about $45bn - during our lives to join many others in improving this world." There are no details as yet, and the pace at which the money will be given out indicates they plan to take their time. This is an unusual way of doing it. It appears to be about control. Through an LLC, Mark Zuckerberg can keep hold of the voting and allocation of the shares he's put into it. And an LLC can spend its money on whatever it wants - including private, profit-generating investment, unlike a charity or a charitable trust. Dear me, no. The company states quite clearly that the move is "not expected to impact Mark's status as the controlling stockholder of Facebook for the foreseeable future". And the company's own Q&A states: "Will Mark's role at Facebook change? "No, Mark is committed to Facebook and its mission. He will continue his role as Chairman and CEO for many, many years. Mark and Priscilla are early in their careers and will continue to lead active lives." "Mark and Priscilla have already committed $1.6bn to their philanthropy," states Facebook. But Mr Zuckerberg's internet.org project, which is designed to bring internet connectivity to a billion unconnected internet users attracted accusations he was only helping people to get connected in order to bring in more users for Facebook, Instagram and WhatsApp. Part of the $1.6bn was given to state schools.  But that also attracted a backlash when some parents, community activists and unions said most of it was going to consultants, rather than to help children learn to read. Mr Zuckerberg and Dr Chan have also given to health care causes, including a $75m gift to San Francisco General Hospital, which was renamed in their honour. Commentators, as the BBC's Silicon Valley correspondent, Dave Lee, points out, see this move as revealing his ambition to be a significant figure on the global political stage. On the face of it, charitable works play very well with voters. But high profile donations from high profile people can also attract critics - as in the previous answer in this Q&A.
Facebook told US company regulators the total sum promised is $45bn (PS30bn). Initially he's pledged $1bn a year for the next three years. After that the time frame is vague. There's no doubt it's generous though as the total promised is 99% of his Facebook stake. By way of context, the UK as a whole donates PS10bn a year to charity.
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How much is he giving?
Big, big things: They say: "It's a world where our generation can advance human potential and promote equality - by curing disease, personalising learning, harnessing clean energy, connecting people, building strong communities, reducing poverty, providing equal rights and spreading understanding across nations. "We are committed to doing our small part to help create this world for all children. We will give 99% of our Facebook shares - currently about $45bn - during our lives to join many others in improving this world." There are no details as yet, and the pace at which the money will be given out indicates they plan to take their time.
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What's it for?
This is an unusual way of doing it. It appears to be about control. Through an LLC, Mark Zuckerberg can keep hold of the voting and allocation of the shares he's put into it. And an LLC can spend its money on whatever it wants - including private, profit-generating investment, unlike a charity or a charitable trust.
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Why manage it through a limited liability company (LLC) and not a charity?
Dear me, no. The company states quite clearly that the move is "not expected to impact Mark's status as the controlling stockholder of Facebook for the foreseeable future". And the company's own Q&A states: "Will Mark's role at Facebook change? "No, Mark is committed to Facebook and its mission. He will continue his role as Chairman and CEO for many, many years. Mark and Priscilla are early in their careers and will continue to lead active lives."
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Does giving his shares away mean he loses control of the company?
"Mark and Priscilla have already committed $1.6bn to their philanthropy," states Facebook. But Mr Zuckerberg's internet.org project, which is designed to bring internet connectivity to a billion unconnected internet users attracted accusations he was only helping people to get connected in order to bring in more users for Facebook, Instagram and WhatsApp. Part of the $1.6bn was given to state schools.  But that also attracted a backlash when some parents, community activists and unions said most of it was going to consultants, rather than to help children learn to read. Mr Zuckerberg and Dr Chan have also given to health care causes, including a $75m gift to San Francisco General Hospital, which was renamed in their honour.
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What about his previous charitable donations?
Commentators, as the BBC's Silicon Valley correspondent, Dave Lee, points out, see this move as revealing his ambition to be a significant figure on the global political stage. On the face of it, charitable works play very well with voters. But high profile donations from high profile people can also attract critics - as in the previous answer in this Q&A.
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Could he use it if he wants to seek political office?