You will, most likely, have heard how Mark Zuckerberg, on the birth of his daughter, Max, is giving some USD $45 billion to charity in probably the largest pledge ever made – though we can but wonder what he will give if he has more children.
Yet, now he is being buried under criticisms, twitticisms, and sarky remarks galore. Yet there may be some substance at the heart of these complaints. After all, he has not given the money to a charity or established a foundation as Bill Gates did, but he has transferred the shares to an LLC of which he retains full control, and which does not have the constraints of charities or foundations, but saves a huge amount of capital gains tax.
Most probably he was advised by Facebook’s tax consultants; and who wants to pay more tax than they have to? But, wait a minute, the whole point of tax is to make the wealthy help those worse off in society and to make your country a great place in which to live. Paying tax is a good thing if you are trying to make the world a better place for your new daughter.
An LLC is a limited liability company, not a corporation, so it is taxed on the earnings (adjusted gross income) of its directors not its profits, though it can invest to earn a profit. So the tax it pays will not be on the massive income it receives when it invests its huge fund, but on the earnings of Mark Zuckerberg and Elizabeth Chan from that company, which may quite possibly be identical to zero. Its basic remit is the rather wide ‘public benefit’, but at 31 who wants to be tied down to just one aspect of philanthropy.
Is there indeed no such thing as a free gift? As Lindsay McGoey might claim who wrote a book with that name. Well, what Mark and Elizabeth will receive is the kind of respect that does not come from running a very large company like Facebook, but from such extraordinary generosity as this gift and which is deep rooted in our subconscious. We have a genuine respect for people who are generous and especially those who are generous on a large scale, though we may temper that respect with cynicism until the beneficiaries are in plain sight. The Zuckerbergs will also find, as have many major donors I have talked to, that as their donations reach those in need they will experience a happiness that far outweighs the more ephemeral pleasures of life to which we often cling.
Unfortunately, it may be equally true that some people try to ensure no act of generosity goes unpunished, and with the way our media feeds on conflict they are having a field day.
So, I say, “All praise to Mark Zuckerberg” and all those who are inspired to follow in his philanthropic footsteps.
CEO, International Fundraising Consultancy