Facebook CEO's donation is a game-changer

How quickly and profoundly becoming a parent changes your view of the world and its future! Mark Zuckerberg and Priscilla Chan's announcement that their daughter's birth inspired the creation of the Chan Zuckerberg Initiative represents an important milestone in the new global culture of giving.

Philanthropy is booming across all levels in the U.S.: Foundations and donor-advised funds are on a steep growth curve. Philanthropy surged by 5.4 percent in 2014 to a record $358 billion, the Chronicle of Philanthropy reported. Indeed, eight-figure donations are now so routine, they barely generate publicity.

This year's "Giving Tuesday," the Tuesday after Thanksgiving dedicated to giving back, produced impressive results, with donations rising more than 40 percent over 2014, according to several payment processors. And The Smithsonian started a new initiative on American philanthropy, kicked off by Warren Buffett, Melinda Gates, Bill Gates and David Rockefeller, Jr.

Mark Zuckerberg with wife Priscilla Chan and their daughter Max.
Source: Facebook
Mark Zuckerberg with wife Priscilla Chan and their daughter Max.

And it's not just an American trend. Networks of donors reach around the world, and leading private banks now offer philanthropy support along with investments.

This exciting new wave of commitment to social change includes Chinese wealth creators like Jack Ma as well as tech entrepreneurs like Mark Zuckerberg. The amount of the Zuckerberg-Chan pledge is truly spectacular, but the way they're planning to use the money is just as important.

Most broadly, philanthropy is defined as the voluntary use of private resources for public good. And we've usually thought about those "private resources" as one-way transfers from giver to receiver: donations, gifts or grants.

In the U.S., that's the kind of philanthropy that our tax code rewards. But increasingly donors recognize that there are other ways to use private resources if you step back from the narrow view of charitable deductibility.

You can invest in for-profits, or even some non-profits,that make the world a better place and also give you some return. That return can really multiply the financial support you can give to the causes you care about, and it can allow the groups to really scale up. You can give or loan directly to people, and let them choose how to improve their lives and their communities.

You can use your funds to advocate for policy and legislative changes that might really move the needle. You can fund traditional and social media campaigns to create movements.

The Chan Zuckerberg Initiative is an LLC that will let its founders use any and all of these ways to fund social change — and probably some that haven't been invented yet. Their awareness that innovation and technology will create opportunities that no one yet recognizes is also a notable factor.

Market forces will bring technology and change to society broadly – that's how capitalism works – but thoughtful philanthropy can accelerate that process.

Just as the printing press made it possible for an enormous portion of society to get access to information without all the cost and time of hand-written manuscripts, online learning could bring billions of people into the information age without our needing to put up lots and lots of buildings.

That openness to the future is another significant feature of their commitment: it's very long-term, and it's very flexible. That's been a hallmark of great philanthropy for a long time. The Rockefellers, our organization's founding family, created dozens and dozens of organizations over the years – and then brought in other funders, and allowed the work to evolve.

Like the entrepreneurs who created that earlier boom in philanthropy, Zuckerberg and Chan see that new institutions and ways of getting work done will be needed.

With this kind of approach and horizon, it will be perhaps decades until we can see what this initiative has done for the world. But in the short term, the Chan-Zuckerberg commitment is likely to fire up lots of entrepreneurs – wealthy and struggling – and in fact lots of people from all walks of life.

This could be the Ice Bucket Challenge of 2015 — and it could unleash not millions but billions.

Commentary by Melissa A. Berman, the president and CEO of Rockefeller Philanthropy Advisors, and adjunct professor at Columbia Business School.