
Mark Zuckerberg responds to critics of his $45B pledge - e15ctr0n
https://www.facebook.com/zuck/posts/10102507695055801
======
chollida1
I think everyone gets why he chose an LLC

\- can make political contributions, People complain about it alot, but as
Bill Gates said,even his own fortune is a pittance compared to what the
government spends each year. Political persuasions moves the needle in the US
more than charity ever could hope to. Why give up on that option?

\- invest in companies, how many people here have said they'd invest in SpaceX
because they think its good for the human race.

\- charities have to give a way a certain percentage every year

\- charities are subject to alot of rules and oversight. You don't get rich by
having other's tell you what to do with your own money.

Would you feel a bit pissed if you put the vast majority of your wealth into a
charity and then found out that, that meant that you really couldn't do the
things that were important to you due to the tax rules imposed upon charities?

What he's doing is smart if he wants to have the maximum impact on the world.

Consider the alternative. He's doesn't ever need to sell any FB shares in his
lifetime, he'll just get loans from the bank against his shares, so this isn't
really about dodging taxes.

~~~
Aleman360
But is it right for one person to be in control of that much money? Why do we
allow individuals to amass that much power?

~~~
pan69
I thought that was capitalism and I thought we all agreed that that was good.

To be fair, it's his money. It's not that he bought a lottery ticket and won
the jackpot. He build a company and made loads of money. It's up to him what
to do with it, I guess.

~~~
dragonwriter
> I thought that was capitalism and I thought we all agreed that that was
> good.

It might be a remnant of capitalism, but capitalism was relatively
controversial when it was the dominant economic system of the developed world
(it was named as a system by those critical of it!), was displaced everywhere
in the developed world by modern mixed economies, and even the degree of
capitalism present in those economies remains controversial.

So, no, I don't think "we all agreed" that capitalism was good.

------
Albright
I don't really have any expertise to comment on whether setting up an LLC
versus a non-profit is a good idea. I'm not even a big Zuck fan. I just think
it's so very… _western culture in 2015_ that a bunch of internet warriors are
getting irate because they think a self-made bajillionaire isn't donating
$45,000,000,000 of his personal wealth the proper way.

~~~
rm_-rf_slash
The proper way is a social contract: you set up a charity, get tax breaks, and
in return, you're required to spend a certain percentage on charitable causes.

Zuckerburg's pledge aside, if he were to do nothing with his new LLC, he would
face no tax penalties and would essentially be moving money from one place to
the other with nobody benefiting in any tangible way.

The reason people are upset is because the last 30 years have amounted in an
enormous transfer of wealth from the poor and middle class to the very rich.
All that wealth - everybody's wealth - was created by the labor of people long
dead, all the way down to the first humans to develop agriculture. A staple of
any society has been the need to tax wealth creation so public goods can be
provided, from national security to a functioning court system.

By dodging taxes (which is what happens when you make a "charity" that isn't
structurally obliged to make donations) you are circumventing the social
contract and depriving the public of a portion of the profits derived from
being a part of that society.

Creating Facebook or any other large company with a big workforce is no excuse
to not pay taxes. Those people use roads, water, courts, and require
protection from the police and military. That causes additional strain on the
system and has to be paid for somehow.

I don't care how he spends his money, but establishing an LLC as a charity is
a poor form of philanthropy.

~~~
lgas
The proper way is: However he wants. It's his money.

~~~
res0nat0r
In addition to that Zuck already dispels the meme that he isn't paying taxes
in his post, the LLC will be paying taxes just like everyone else.

All of the complaints really are just proxy reasons to complain about Facebook
and the guy who founded it. If Warren Buffett did this exact thing last month
none of these articles would have been written.

------
numlocked
I really don't think this deserves the level of skepticism it's being met
with. What else could this guy possibly do to demonstrate that he is genuinely
not interested in material wealth? Look at how he lives, and how he has (not)
monetized Facebook along the way. Look at how he turned down a million-dollar-
plus acquisition offer for a company he didn't care about in _high school_.

Whatever you think about Facebook, Zuckerberg truly and somewhat uniquely does
not appear to be motivated by money. Apparently that's very difficult for most
people to understand, and they attribute their own motives to his actions.
He's given away gobs of money before; he's still incredibly well off with
'just' 1% of his wealth remaining; why doubt his intentions here?

~~~
viscanti
> Look at how he lives

You mean buying multiple homes around his home for privacy?
[http://www.mercurynews.com/business/ci_24285169/mark-
zuckerb...](http://www.mercurynews.com/business/ci_24285169/mark-zuckerberg-
buys-four-houses-near-his-palo-alto-home)

Or you mean driving his neighbors crazy with his over-the-top construction
[http://www.sfgate.com/bayarea/matier-
ross/article/Neighbors-...](http://www.sfgate.com/bayarea/matier-
ross/article/Neighbors-feeling-squeezed-by-work-on-Mark-5771069.php)

~~~
numlocked
I live in SF and this is happening everywhere. The house directly next to me
has been under construction for more than 18 months, with parking blocked off,
huge amounts of noise, etc. And I live on a fairly undistinguished block
(though one that is about to have a $5m home hit the market...). This is just
par for the course in SF. His home attracted a particular amount of attention
because it's his.

$10 in SF for a billionaire is really pretty modest. Compare to e.g. Larry
Ellison:
[http://sf.curbed.com/archives/2011/05/31/pacific_heights_lar...](http://sf.curbed.com/archives/2011/05/31/pacific_heights_larry_ellison_buys_house_next_door_for_40m_shrubbery_fracas_settled.php)

------
bherms
Donate to a charity and people complain it's not the right one. Donate to
several charities and people complain that the charity doesn't spend money the
right way. Set up an LLC geared towards allocating $45b to social good,
charities, promising startups for the human race and armchair activists use it
as a platform to question your true character and call into question the
nature of your announcement... I wonder how many of those people have donated
or helped someone in need this year.

------
SCAQTony
There is a 5% rule for non profits that his LLC gets to avoid:

"...What is the 5 percent payout requirement?

The purpose behind the minimum payout requirement is to prevent foundations
from simply receiving gifts, investing the assets and never spending any funds
on charitable purposes. The basic rule can be stated simply, but its
calculation is complex: Each year every private foundation must make eligible
charitable expenditures that equal or exceed approximately 5 percent of the
value of its endowment. The word "payout" while convenient is somewhat
misleading and is not used in the Tax Code section that creates the rule. The
word "payout" suggests grants or contributions paid out to other charities.
Although these grants normally make up more than 93 percent of the
expenditures of most foundations, many other expenses can also qualify in
meeting the minimum payout requirement. In short, the 5 percent payout rule
need not be satisfied solely with grants. ..."

[http://c.ymcdn.com/sites/www.abagrantmakers.org/resource/res...](http://c.ymcdn.com/sites/www.abagrantmakers.org/resource/resmgr/abag_publications/the_five_percent_minimum_pay.pdf)

------
dkbrk
I wonder if forming a Benefit Corporation [0] was considered. This is a type
of corporate entity that has only come into being in the past few years.
Unlike a traditional corporation which has a mandate to operate in the best
interests of its shareholders [1], a Benefit Corporation is formed with a
mandate to produce a benefit to a broader class of stakeholders, which could
be the general public or all of humanity. As a practical matter, if you have
the assent of the shareholders a corporation can act however it likes within
the law and doesn't need to try to return a profit, however it seems to me
that there is a serious impedance mismatch in using a corporation for
philanthropic endeavours and I wonder why, seeing as how a legal tool
specifically for this purpose has recently been created, it wasn't used.

[0]:
[https://en.wikipedia.org/wiki/Benefit_corporation](https://en.wikipedia.org/wiki/Benefit_corporation)

[1]:
[https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co](https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co).

------
jasode
There seems to be lot of emotion-laden writing about MZ's pledge but I looked
at his letter[1] to his daughter and this is what it actually says:

 _Our hopes for your generation focus on two ideas: advancing human potential
and promoting equality. [...] Our initial areas of focus will be personalized
learning, curing disease, connecting people and building strong communities.
We will give 99% of our Facebook shares -- currently about $45 billion --
during our lives to advance this mission._

He didn't actually use the word "charity". Was the term "charity" something
that the media outlet pushed in its stories? Now with the closer inspection of
the LLC structure, the media looks to blast MZ for being dishonest about it
being a charity? Did MZ get free hero publicity by not explicitly stating it
was _not_ a 501c in his letter to the daughter? I didn't follow the story
closely enough to judge if there was deception and media manipulation.

As for MZ going with the LLC structure, I think it's just a general zeitgeist
of tech-billionaires to believe that other institutions besides non-profits
can make more progress on improving humanity. A similar sentiment was Larry
Page's "I'd rather give my billions to Elon Musk than charity".

I don't know if MZ and LP are "right" but I sort of see where they're coming
from. I was looking at a startup that matched donors to charities and when I
researched charities such as Pink Ribbon and Mother Theresa, etc, it really
made me mistrust the whole landscape. Yes, there are sites such as GiveWell
but then I'd need to research the integrity of GiveWell itself which I never
got around to pursuing.

I don't know all the confluence of reasons but it does seem like traditional
non-profits are not getting 100% mindshare of philanthropists.

[1][https://www.facebook.com/notes/mark-zuckerberg/a-letter-
to-o...](https://www.facebook.com/notes/mark-zuckerberg/a-letter-to-our-
daughter/10153375081581634?pnref=story)

------
notatoad
Everybody's getting way too caught up in the structure of this pledge. Yes, he
could use an LLC as a way to accrue more wealth. But it's just as possible to
use a registered charity as a way to purchase influence and avoid taxes.
Whether it's through an LLC or a charity, the amount of good he accomplishes
will be entirely down to his intentions and the effort he expends on his
philanthropy.

It's too early to judge. This could be just pure good, it could be a tax
dodge, it could be a PR move, or it could be good intentions that don't get
followed through on. We won't know until his foundation actually starts
spending this money.

------
jstalin
The fact still remains, more taxes will be collected from this LLC arrangement
than if he had donated his shares to charity, _a la_ Bill Gates. Why is
everyone having a collective aneurysm over that?

------
staunch
There is no good reason to question Zuckerbergs's motives. He very clearly
means to donate his money to good causes over the course of his life.

Maybe it's wrong for billionaires to influence the world as if they had
billions of votes, but good or bad, anyone who questions his sincerity or
general goodness is a bad judge of character.

And even if you can't imagine Zuckerberg as a good person. Good luck trying to
convince yourself his _paediatrician_ spouse is not genuinely interested in
helping people.

------
lintiness
the guy created an online yearbook. it would suck if the genius and his wife
couldn't tell us how to vote.

------
afdnewlkewwd
Zuck: Yeah so if you ever need info about anyone at Harvard

Zuck: Just ask

Zuck: I have over 4,000 emails, pictures, addresses, SNS

[Redacted Friend's Name]: What? How'd you manage that one?

Zuck: People just submitted it.

Zuck: I don't know why.

Zuck: They "trust me"

Zuck: Dumb fucks

EDIT: It's pretty gracious to assume someone who directly called anyone who
trusted him an idiot has somehow reformed himself into a someone deserving
optimism, despite no evidence that he's changed.

~~~
Xcelerate
You are assuming people's personalities remain static over the course of their
lives.

EDIT: Then again, they might not vary. I'm not a personality expert.

~~~
threatofrain
It irks me that you would rebut this guy with this argument simply because I
know that the empiricism strongly leans toward personalities remaining very
stable throughout the lifespan, and that changes move together as a population
than within-individual. Academics might not have yet built consensus on a
general personality theory (Big 5 is more a descriptive research framework
than a theory), but there is consensus on personality empiricism.

Surely there is another angle of counter. I don't believe in winning
argumentation by any means, especially by scientific disinformation without
empirical cause.

~~~
intjk
I think the guy just grew up. People say dumb stuff when they're young. Not
much need for empirical backing when the heuristic (in this case: people
mature as they grow older) explains it well enough.

~~~
threatofrain
Your narrowly crafted argument is the proper response, but this guy made an
empirically testable statement relevant to the sciences. You might not have
clicked his profile, but he's also a PhD student of the sciences, meaning he
has institutional access.

You won't find adequate empirical backing on personality change over the
lifespan, because the _ecology_ of the evidence suggests that personality is
stable. Disciplined speech is difficult and worthy.

------
nugget
So it's not actually a charity after all - it's a private LLC that will make
''philanthropic'' investments which, if well run, could snowball the $45b of
Facebook stock into hundreds of billions of dollars of privately owned and
controlled wealth. Will the LLC take equity in projects like a venture capital
firm or will it truly gift money away? (If gifting money, there's no reason
not to leverage the charitable structure to manage taxes, which makes me think
they will seek equity positions.) This structure might be a more effective way
to impact the world but it's definitely a bit of whiplash from the way this
whole project was initially reported.

~~~
blisterpeanuts
From the posting: _The Chan Zuckerberg Initiative is structured as an LLC
rather than a traditional foundation. This enables us to pursue our mission by
funding non-profit organizations, making private investments and participating
in policy debates -- in each case with the goal of generating a positive
impact in areas of great need. Any net profits from investments will also be
used to advance this mission._

It sounds as though they're truly giving money to some nonprofits, as well as
investing in other worthwhile ventures, and will reinvest the profits to good
causes as well.

~~~
wavefunction
You left out perhaps the most interesting part: >participating in policy
debates

Like advocating for increased H1-B visas over simply awarding more visas
directly to individuals, as one "policy debate" Zuckerberg has recently
supported. Or whatever strikes his fancy at the time.

