Mark Zuckerberg is an innovation machine — first in creating and growing Facebook, and now in pledging 99 percent of his wealth to charity. But the unusual structure Zuckerberg created to give away his wealth may shield him from some of the typical requirements of charitable giving.
According to a company statement, Zuckerberg is transferring $45 billion of his Facebook shares to a new limited liability company called the Chan Zuckerberg Initiative. The filing says, "Over the course of their lives, these shares, or the net after-tax proceeds from the sale of such shares, will be used to advance the mission of the Chan Zuckerberg Initiative. Priscilla and Mark will decide together how best to allocate funds."
The company says the LLC will "pursue its mission by funding nonprofit organizations, making private investments and participating in policy debates, in each case with the goal of generating positive impact in areas of great need."
When most billionaires give money to charity, they create a foundation or give directly to a not-for-profit company or charitable trust. Zuckerberg is not doing either — he is pledging to someday turn over shares to a private LLC controlled by him and his wife, Priscilla Chan.
Why is Zuckerberg opting for an LLC?