by Katie Roof (@Katie_Roof)）
On Tuesday, Facebook co-founder and CEO Mark Zuckerberg posted a powerful announcement — not only did he reveal the birth of his daughter, Max, but he shared plans to give up 99% of his personal Facebook shares over the course of his lifetime and use them to fund projects and causes through a newly formed entity called Chan Zuckerberg LLC.
The announcement generated a lot of attention, much of it due to the sheer volume of Zuckerberg’s net worth — $45 billion! While many people, including Bill Gates and Michael Bloomberg, praised him for his generosity, others expressed confusion and even questioned his motives for giving his money away.
Looking to alleviate some of those concerns, in a post Thursday, Zuckerberg further explained how he and his wife Priscilla Chan, plan to delineate their funds.
“Our initial focus areas are personalized learning, curing disease, connecting people and building strong communities. We’ve already made many investments over the past five years in these areas — education, science, health, internet access and inclusion — and you can see a summary of our investments on the Chan Zuckerberg Initiative page timeline.”
Zuckerberg further addressed the allegations that this organization was a way to avoid taxes, and explained that by structuring the Chan Zuckerberg entity as an LLC, that their shares will still be taxed.
“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. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC.”