ZUCKERBERG’S GIFT HORSE
Taking a closer look at the specifics of Facebook founder’s headline-grabbing donation,
“To give away money is an easy matter, and in any man’s power. But to decide to whom to give it, and how large and when, and for what purpose and how, is neither in every man’s power, nor an easy matter. Hence it is that such excellence is rare, praiseworthy, and noble.” — Aristotle
“Frenzied” describes the press reaction to the Dec. 1 announcement that Facebook Inc. co-founder Mark Zuckerberg and his wife, Priscilla Chan, will donate 99 per cent of their net wealth to charity, a sum that currently amounts to about $46 billion (U.S.) worth of Facebook stock. Bloomberg, for one, ran the headline “Mark Zuckerberg Pledge Sets New Giving Standard.”
The new standard, apparently, is that Zuckerberg is a mere 31 years of age. Bill Gates was a greybeard, at 45, when he and his wife, Melinda, pledged to donate their vast fortune to good works.
But an indignant Jesse Eisinger, of the non-profit investigative group Pro Publica, declared that with his “donation,” Zuckerberg has “amassed one of the greatest fortunes in the world and is likely never to pay taxes on it.”
Now that the dust is settling, it is apparent that there’s much less to the ballyhooed Dec. 1 announcement than meets the eye.
It is not a tax dodge for the ages. But it is one of those gift horses worth looking in the mouth, along with other tycoon mega-donations.
Just what is the headline-grabbing Zuckerberg-Chan donation?
It is not charity. What Zuckerberg and his wife have done is merely transfer money from one pocket to another.
Real philanthropists create a nonprofit charitable foundation or trust. To maintain their registered charity status, charitable foundations must donate a minimum of 5 per cent of their assets each year; and make publicly available the total amounts donated, the recipients and the amount given to each.
Real charities are forbidden from lobbying and from owning for-profit entities.
To see what proper accountability and transparency looks like, check out the comprehensive website of the W. Garfield Weston Foundation, one of Canada’s most effective donors.
Zuckerberg and Chan, by contrast, have created as the repository of their donations a private company, the Chan Zuckerberg Initiative L.L.C. Like all privately held companies, this one is a black box. It is not obligated to report on its activities, which, legally, can include lobbying, owning for-profit companies and making no donations whatsoever.
Zuckerberg and Chan insist on this arrangement because they want to be free to lobby, to invest in forprofit enterprises doing what they regard as noble work, and otherwise be able to affect public policy and social outcomes in whatever way they chose.
That’s perfectly legal. Just don’t call it a charity. It is not the donation of a fortune Probably nine people out of 10 canvassed on Dec. 1 about the Zuckerberg-Chan announcement assumed the couple was donating all of its wealth promptly. That’s what the words “They’re giving all their money away” means to most of us.
Actually, Zuckerberg and Chan are keeping their fortune. They can retain it for decades to come. They’ve said that for at least the first three years, they will donate no more than $1 billion to Chan Zuckerberg Initiative L.L.C. In theory, that means a donation of as little as one cent.
Even if they do donate $l billion to their non-charity “charity” next year, Zuckerberg and Chan will have parted with just 2.2 per cent of their wealth. The greatest philanthropists to date, John D. Rockefeller and Andrew Carnegie, were determined to unload most of their wealth in their lifetime — which may explain why each waited until their retirement years to do so full time.
Today’s super-philanthropists, by contrast, want it both ways. They seek the renown of mega-givers without surrendering the golden goose.
It’s widely assumed that Bill Gates and Warren Buffett have donated their entire wealth. Actually, they long ago committed to doing so, but today retain fortunes of $84.2 billion and $61.2 billion, respectively. There’s a better way of helping Zuckerberg and Chan’s goals are “personalized learning, curing disease, connecting people and building strong communities.”
Those basic functions — of education, health care, civic amenities and urban renaissances — are already attended to by governments, which alone have the heft, expertise and resources for the task.
After Zuckerberg’s $100-million donation to improve Newark, N.J., was largely squandered, Zuckerberg’s chagrined fellow travellers among the business tycoons in the “education-reform” movement doubted their sanity in taking on a project of such formidable complexity on their own.
Assuming Zuckerberg and Chan are sincere, which I do, why not simply donate to competent but cash-strapped groups long at work on major challenges?
These include the Red Cross, the Red Crescent, Doctors Without Borders, the United Way and the Salvation Army. Or, if we keep with U.S.-only examples, bulking up the $7-billion budget of the Centers for Disease Control and Prevention, and the National Institutes of Health (NIH), one of the world’s biggest financiers of medical research? Unaccountable giving
Writ large, these mega-donations by the superwealthy amount to a creeping privatization of socialservice provision. Or, put another way, they are the removal of democratic principles from the provision of essential societal needs. This “black-box charity” is no solution.
In this era of income inequality and straightened governments, we surely could use a philanthropic spirit among those whose wealth has skyrocketed, while middle-class net worth has stagnated since the 1970s.
“The people who have been the beneficiaries of this significant shift in wealth and income have to seriously look at themselves and say, ‘Am I doing enough?’ ” Ed Clark, former CEO of the Toronto-Dominion Bank and now an affordablehousing advocate, has said.
Every year, Canadians made a mega-donation of an estimated $50 billion (Canadian) in the value of their 2.1 billion hours of volunteer work — a sum roughly equal to Manitoba’s GDP — in addition to the billions of dollars in cash they donate to good causes. That’s an everyday miracle that gets no media attention.
Aristotle to the contrary, while it’s easy to go awfully wrong in charity — imagining you can solve problems by sprinkling a little Silicon Valley pixie dust on a school district, for instance — the folks going door-todoor raising funds for the cancer society and easing the transition for Syrian refugees provide a far better example of how to make a lasting, positive difference. You won’t get a lot of recognition for it. But, as John Kennedy said, “It’s amazing what you can accomplish if you don’t care who gets the credit.” dolive@thestar.ca