Facebook's Zuckerberg takes philanthropy into profit, politics
By Yasmeen Abutaleb
SAN FRANCISCO (Reuters) - Mark Zuckerberg, who famously urged his company Facebook Inc (FB.O: Quote) to "move fast and break things," is taking a similar approach to the staid world of philanthropy, indicating his new venture will get directly involved with politics and may even turn a profit.
The project, called the Chan Zuckerberg Initiative, is structured as a limited liability company. That means, unlike a traditional charitable or philanthropic foundation, it can make political donations, lobby lawmakers, invest in businesses and recoup any profits from those investments.
"They are not behaving like a traditional philanthropy," said Leslie Lenkowsky, professor of public affairs and philanthropy at Indiana University. "They are instead trying to achieve philanthropic purposes using a business model."
Philanthropic foundations such as the one set up by Microsoft Corp (MSFT.O: Quote) co-founder Bill Gates typically support non-profit organizations, and they are required to pay out at least 5 percent of their assets in grants each year, a restriction the Zuckerbergs will not face.
Non-profit foundations like Gates's do not pay tax, whereas the Facebook chief executive's vehicle would pay tax on any profit generated.
Chan and Zuckerberg announced Tuesday, in a Facebook post disclosing the birth of their daughter Maxima, that 99 percent of the stock they hold in Facebook would go toward the philanthropic project over their lifetime.
At the stock's current price that stake is worth $45 billion.
Zuckerberg said he will invest up to $1 billion of his shares each year over the next three years into the initiative. Continued...