Earlier this week, Mark Zuckerberg and his wife Priscilla Chan announced that to honor the birth of their first child they were giving away 99 percent of their Facebook shares, currently worth around $45 billion, over their lifetimes to philanthropic projects.
At first the media gave them nothing but "Likes." Then some started questioning why Zuckerberg was giving money to a private limited liability company (LLC) called the Chan Zuckerberg Initiative, instead of a traditional non-profit charity.
The Facebook CEO responded to the criticism on Thursday evening, writing that by "using an LLC instead of a traditional foundation, we receive no tax benefit" but instead "gain flexibility to execute our mission more effectively."
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"In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not," he wrote on Facebook. "And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC."
The benefit to using an LLC, he said, was the ability to fund everything from education non-profits to groups that make private investments in clean energy.
On its Facebook page, the Chan Zuckerberg Initiative listed its main goal as "advancing human potential and promoting equality." Zuckerberg and Chan, fresh off the birth of their first baby, Max, said they will "have more to share soon" on how specifically they plan to achieve those goals.
