Finance and economics: Facebook and philanthropy I'll give it my way
Mark Zuckerberg finds another way to share.
Many people take to social media to share news of big events.
On December 1st Facebook's boss, Mark Zuckerberg, followed in the tradition he helped create, when he and his wife, Priscilla Chan, announced the birth of their daughter on the social-networking site, along with news that they will give away the majority of their fortune during their lifetimes.
Around 99% of the shares they own in Facebook, which today are worth around $45 billion, will go into the Chan Zuckerberg Initiative (CZI) .
Their aim, they wrote, is to improve the world for their daughter and future generations.
For now, the move allows Mr Zuckerberg to relinquish wealth, but not control, as he will retain the votes associated with any shares transferred to CZI.
He anticipates remaining the controlling stakeholder of Facebook “for the foreseeable future”, and plans to sell, or give away, no more than $1 billion of Facebook stock each year for the next three years.
Mr Zuckerberg is far from the first tech titan to pledge billions to philanthropic activities, but he is following a slightly different path to Bill Gates, Microsoft's founder.
Whereas the Bill and Melinda Gates Foundation is a registered charity, the Zuckerbergs' CZI will be a limited liability company (LLC) .
Although charitable status comes with alluring tax breaks, strings are attached.
Unlike charities, LLCs can lobby without restriction; the Zuckerbergs have said that CZI will get involved in policy debates.
The other flexibility LLC status allows is the freedom to invest in for-profit ventures that have a big social impact.
In this, the Zuckerbergs are following in the footsteps of Pierre Omidyar, founder of eBay, an online marketplace, who grew frustrated by the constraints of charitable status.
Mr Omidyar now oversees the Omidyar Network, which has for-profit and non-profit arms.
Will Fitzpatrick, designer of this hybrid structure, claims that the for-profit arm can more easily invest in things that can be scaled up quickly.
He gives the example of an investment in a solar lantern that cost less than $10 a unit, which meant people did not have to burn dangerous kerosene, and which he says would have been technically difficult to achieve through a private foundation.