Friday, December 4, 2015

Zackerberg's philanthropic donation

Mark Zuckerberg, the founder of Facebook, became a father. And he committed in front of his first daughter to give up most of his estate.

According to his post on Facebook, Mr. & Mrs. Zuckerberg decided to donate the 99% of their shares of Facebook, more than 400 million USD.

Sydney Morning Herald: Mark Zuckerberg promises Facebook shares worth over $60 billion away to charity

Their contribution will be sent to Chan Zuckerberg Initiative. It will be structured as a limited liability company (LLC), to provide the aids to curing disease, learning support, building strong communities, and so on.

Chan Zuckerberg Initiative is not an NPO. Some people criticized Zuckerberg as he would intend to avoid taxation. He replied that Chan Zuckerberg Initiative should be an LLC to keep a room for political activity, different from NPO. Also, he explained that his profit for selling the stock should be taxed.

The New York Times: Zuckerberg Defends Structure of His Philanthropic Outfit

I understand Zuckerberg’s intention. It is not easy to utilize a considerable amount of donation with flexibility. LLC is a fascinating figure of foundation for his donation. Some years ago, Son Masayoshi, the CEO of Softbank, also donated 1 billion JPY (100 million USD at the time) for the victims of the earthquake and tsunami disaster in 2011. But he had to establish a new organization to manage the money. His behavior was misunderstood by some people disliking him.

Zuckerberg’s act should be appreciated without a doubt. On the other hand, it is not rare for a billionaire to donate most of his or her fortune. Bill Gates and Warren Buffett also carried out the similar thing. In the Western culture, there seems an ideology of the "nobles obliges." In addition, taxation system in the US may encourage them to give away their money rather than sparing. Instead, few Japanese make a donation. Or, if done, they hesitate to reveal their act. An interesting difference.

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