When Mark Zuckerberg and his wife offered $45 billion to the world after the birth of their daughter, few have seen that it is an investment in a new limited liability corporation set up by the couple to further their agenda. But, will this new philanthropic strategy actually work?
When Facebook founder Mark Zuckerberg and his wife offered a charitable donation to the world of $45 billion, everyone was overwhelmed and think it a most generous gift with Zuckerberg being worthy of standing with the greatest of philanthropists like Andrew Carnegie. However, many critics and analysts have since been examining Zuckerberg’s gift and are finding it little more than an investment in another of Zuckerberg’s money making schemes.
Such young billionaires like Zuckerberg are changing the face of what philanthropy actually means. Many critics believe it is the end of traditional philanthropy as we have known it, according to The Wall Street Journal. Zuckerberg calls his $45 billion over the course of his life an “initiative” to make the world a better place according to Mark Zuckerberg’s definition of what that would entail.
As the world swoons over the generosity of Zuckerberg, many recognize it for the investment it is in a new limited liability corporation known as the Chan Zuckerberg Initiative. While the foundation of this new LLC is philanthropic at its heart, many critics recognize that the Chan Zuckerberg Initiative will also own shares in for profit businesses that the couple believes will further their aims of “equality” and “human potential”.
What Zuckerberg and others are doing is attaching the profit motive of business to actually try and measure how well the non-profit philanthropic situations are actually doing. This is in direct conflict with the traditional way such philanthropic situations have been run in the past. Most philanthropies have no bottom line interest and can’t actually tell of effective their donations have been making.
For the Chan Zuckerberg Initiative to be able to sustain itself over time, the entity must show both a social as well as financial return to be judged effective. If an organization wants more money from the Initiative, they must show that more children are graduating or than more people are being fed and trained for jobs.
Zuckerberg has also invited other people in the top 1 percent to invest in the Initiative thereby bringing an enormous amount of leverage to the original investment of $45 billion. Also, as an LLC, the corporation is entitled to profits from its ventures that it may reinvest or simply disperse. When a traditional foundation makes a grant, that money is gone and the pot only gets refilled through donations or through the fortunate performances of its investments.
The challenges remain however. How to actually measure “equality” or “social justice” or “human potential”? In addition, many of the traditional charities have been complaining that billionaires like Zuckerberg have no understanding of what they actually do and begin to micromanage the situation to the point where the work that was going on is no longer going on.
