Move over Warren Buffett and Bill Gates. There’s soon to be a new sheriff in town. In a move that will exceed Gate’s and Buffett’s philanthropy, and dwarf established, venerable foundations like Ford, Getty and Robert Woods Johnson, Mark Zuckerberg and his wife, Dr. Priscilla Chan, pledged 99% of their stock holdings (an amount estimated to exceed $45 billion) to charity. With the stroke of a pen, and considerable forethought, they created a spanking new charity in celebration of the birth of their spanking new daughter.
And so, as a celebratory gesture in honor of their daughter’s birth, the proud parents will attempt to empower a generation of youngsters, so they may reach their full potential. As Michael Bloomberg posted on Facebook, 30 has become the new 70 when it comes to generosity. It is hoped that this will open the spigot to more of the tech wunderkinds emulating them and doing likewise. “The only question now is: How many of his peers in Silicon Valley and beyond will join him?” Mr. Bloomberg said.
Thier organization will be dubbed the Chan- Zuckerberg Initiative, and is the latest indication of a growing interest in philanthropy among Silicon Valley’s young billionaires, who unlike previous generations of business tycoons, appear eager to spread their wealth while they are still young. Mr. Zuckerberg is 31, and Dr. Chan is 30. One would think that by dint of their wealth, the formation of a charity would be a straightforward venture. But the sheer scale of their donation will require an enormous amount of detailed planning.
Zuckerberg knows only too well that just throwing money at a problem doesn’t guarantee success. He had given the Newark, NJ public school system a grant of $100 million in 2010, only to see it squandered and have little impact except to mobilize many unions and activists against his largess. Zuckerberg claims to have learned much from the episode that may explain the new approach to giving.
But the times suggest a new approach in philanthropy by Silicon Valley’s newly-minted billionaires who seem to crave more control over disbursements and allocations and the destination of the donations. Zuckerberg and Chan, for starters, will be using a limited liability company instead of the usual foundation or non-profit corporation, which should allow them more flexibility in the typical giving process. They will invest in companies, lobby for legislation, and seek to influence public policy debates, which nonprofits are restricted from doing under tax laws. A spokeswoman for the family said that any profits from the investments would be plowed back into the Chan-Zuckerberg Initiative for future projects. The final amount donated can be even greater since it is based on stock, an appreciating asset that has done just that in recent months.
In making the philanthropic gesture, Zuckerberg is emulating the generosity of his childhood idol, Bill Gates, reputedly the world’s richest man with a net worth in excess of $85 billion, and who has pledged to give away about 95% of his wealth. In a statement, Mr. Gates and his wife, Melinda, congratulated Mr. Zuckerberg and Dr. Chan.
“The example you’re setting today is an inspiration to us and the world,” they said. “We can be confident of this: Max and every child born today will grow up in a world that is better than the one we know now. As you say, ‘Seeds planted now will grow.’ Your work will bear fruit for many decades to come.”
Zuckerberg’s action comes at a time when the gulf between rich and poor, in fact the rich and even the middle classes, has never greater been wider. This makes the initiative more meaningful, and hopefully will spur similar generosity from the young tech lions who have enriched society with their genius, and in turn have been enriched by society.