Mark Zuckerberg, the Facebook CEO and his wife Priscilla Chan welcomed their baby daughter Max with the biggest announcement of donating 99% of Facebook shares for the development of the world and promoting equality among people. The initiative has been named as the Chan Zuckerberg Initiative. As soon as they made this announcement, People from all over the world started inquiring about the structure of the Chan Zuckerberg initiative and how the the entire initiative has been structured. In response to this Mark Zuckerberg, posted in his Facebook page, giving an overview of their Chan Zuckerberg Initiative.
Mark Zuckerberg wrote in his post that the initial areas in which he would focus is personalized learning, curing diseases, establishing strong connecting communities across the world. They have been investing in the fields of education, science, technology and health since many years.
When users asked if Chan Zuckerberg Inititative will be a charity, he said that it will be a Limited Liability Company or LLC and not a traditional foundation. The company will help and promote organizations that are working the best possible way in any fields of need. The company will donate for non-profit organizations and will invest in other strong foundation organizations. With the profit incurred from their investments, they will re-invest the profit.
The LLC status of the Initiative will provide them no tax benefit from transferring shares to Chan Zuckerberg initiative and will eventually increase the flexibility of implementing their plans.
“By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively. 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”, said Mark. When a user commented on his post that they will be playing hide and seek with tax payments, he condemned the comment, warning him not to spread incorrect information. he said,” And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC.”
He also added, “What’s most important to us is the flexibility to give to the organizations that will do the best work — regardless of how they’re structured. For example, our education work has been funded through a non-profit organization, Startup:Education, the recently announced Breakthrough Energy Coalition will make private investments in clean energy, and we also fund public government efforts, like the CDC Ebola response and San Francisco General Hospital.”
Mark and priscilla are on parental leave and the work will resume as soon as thay come back from the leave.