UB-Logo Online MagazinUntergrund-Blättle

How Mark Zuckerberg's Altruism Helps Himself | Untergrund-Blättle


A society of oligarchs How Mark Zuckerberg's Altruism Helps Himself


Mark Zuckerberg did not donate $45 billion to charity. You may have heard that, but that was wrong.

Mark Zuckerberg, Facebook founder and CEO at Facebook headquarters in Mountain View, California.
Mehr Artikel
Mehr Artikel
Bild ansehen

Mark Zuckerberg, Facebook founder and CEO at Facebook headquarters in Mountain View, California. Foto: Myles Cullen (PD)

16. Dezember 2015
5 min.
Here’s what happened instead: Zuckerberg created an investment vehicle.

Sorry for the slightly less sexy headline.

Zuckerberg is a co-founder of Facebook and a youthful mega-billionaire. In announcing the birth of his daughter, he and his wife, Priscilla Chan, declared they would donate 99 percent of their worth, the vast majority of which is tied up in Facebook stock valued at $45 billion today.

In doing so, Zuckerberg and Chan did not set up a charitable foundation, which has nonprofit status. He created a limited liability company, one that has already reaped enormous benefits as public relations coup for himself. His PR return-on-investment dwarfs that of his Facebook stock. Zuckerberg was depicted in breathless, glowing terms for having, in essence, moved money from one pocket to the other.

An LLC can invest in for-profit companies (perhaps these will be characterized as societally responsible companies, but lots of companies claim the mantle of societal responsibility). An LLC can make political donations. It can lobby for changes in the law. He remains completely free to do as he wishes with his money. That’s what America is all about. But as a society, we don’t generally call these types of activities »charity.”

What’s more, a charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg LLC won’t be subject to those rules and won’t have any transparency requirements.

In covering the event, many commentators praised the size and percentage of the gift and pointed out that Zuckerberg is relatively young to be planning to give his wealth away. »Mark Zuckerberg Philanthropy Pledge Sets New Giving Standard,” Bloomberg glowed. Few news outlets initially considered the tax implications of Zuckerberg’s plan. A Wall Street Journal article didn’t mention taxes at all.

Nor did they grapple with the societal implications of the would-be donations.

So what are the tax implications? They are quite generous to Zuckerberg. I asked Victor Fleischer, a law professor and tax specialist at the University of San Diego School of Law, as well as a contributor to DealBook. He explained that if the LLC sold stock, Zuckerberg would pay a hefty capital gains tax, particularly if Facebook stock kept climbing.

If the LLC donated to a charity, he would get a deduction just like anyone else. That’s a nice little bonus. But the LLC probably won’t do that because it can do better. The savvier move, Professor Fleischer explained, would be to have the LLC donate the appreciated shares to charity, which would generate a deduction at fair market value of the stock without triggering any tax.

Zuckerberg didn’t create these tax laws and cannot be criticized for minimizing his tax bills. If he had created a foundation, he would have accrued similar tax benefits. But what this means is that he amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it. Any time a superwealthy plutocrat makes a charitable donation, the public ought to be reminded that this is how our tax system works. The superwealthy buy great public relations and adulation for donations that minimize their taxes.

Instead of lavishing praise on Zuckerberg for having issued a news release with a promise, this should be an occasion to mull what kind of society we want to live in. Who should fund our general societal needs and how? Charities rarely fund quotidian yet vital needs. What would $40 billion mean for job creation or infrastructure spending? The Centers for Disease Control and Prevention has a budget of about $7 billion. Maybe more should go to that. Society, through its elected members, taxes its members. Then the elected officials decide what to do with sums of money.

In this case, it is different. One person will be making these decisions.

Of course, nobody thinks our government representatives do a good job of allocating resources. Politicians — a bunch of bums! Maybe Zuckerberg will make wonderful decisions, ones I would personally be happy with. Maybe not. He blew his $100 million donation to the Newark school system, as Dale Russakoff detailed in her recent book, »The Prize: Who’s in Charge of America’s Schools?” Zuckerberg has said he has learned from his mistakes. We don’t know whether that’s true because he hasn’t made any decisions with the money he plans to put into his investment vehicle.

But I think I might do a good job allocating $45 billion. Maybe even better than Zuckerberg. I am self-aware enough to realize many people would disagree with my choices. Those who like how Zuckerberg is lavishing his funds might not like how the Koch brothers do so. Or George Soros.

Mega-donations, assuming Zuckerberg makes good on his pledge, are explicit acknowledgments that the money should be plowed back into society. They are tacit acknowledgments that no one could ever possibly spend $45 billion on himself or his family, and that the money isn’t really »his,” in a fundamental sense. Because that is the case, society can’t rely on the beneficence and enlightenment of the superwealthy to realize this individually. We need to take a portion uniformly — some kind of tax on wealth.

The point is that we are turning into a society of oligarchs. And I am not as excited as some to welcome the new Silicon Valley overlords.

Jesse Eisinger / Infosperber

Related content...
CEO of Société Générale, Frédéric Oudéa (in the middle), lied at the French Senat.
Europe should rid itself of the tax havens it shelters withinThe current system has run out of steam


- As strange and as sudden as it may be, thanks to the revelations by several international news sources concerning the magnitude of tax evasion facilitated by a Panamanian firm, elected officials and bank directors, often in collusion with each other, seem to have discovered a durable, well-organized offshore system of large-scale dubious deals.

Corruption Perceptions Index 2015 from Transparency International.
Misleading index and bribery by foreign companiesCorruption in Africa


- Internationally, African countries are considered to be particularly corrupt.

Globaler Datenverkehr von Facebook im Dezember 2010.
Macht und Verantwortung von FacebookWer kontrolliert die digitale Öffentlichkeit im Zeitalter von Algorithmen?


- Lesenswert: Das „Data & Society“-Forschungszentrum hat eine Reihe von journalistischen und akademischen Texten zur aktuellen Frage der algorithmischen Medienmacht von Facebook, Google und Co.

"Children don‘t start wars" - Vortrag von David Gribble auf der EUDEC 2008 (Teil 2)

06.08.2008 - "The purpose of this talk is to demonstrate that as we get older we not only hear and see less well and become physically and mentally less agile, but also become less good at making rational moral decisions. I shall show that our capacity for empathy begins to decline at the latest in early childhood, the suppression of altruism is taught at school and selfish conformity grows as we adapt to adult society.

Elephant in the room #45 - Medical Self-Defense Network in Ukraine and beyond

27.12.2022 - In the last episode of this year we are talking with Alexis from Medical Self-Defense Network - left and anarchists aiming to build up grassroots organizing of the health care as well as providing medical aid to the people in the war zones. MSDN is currently active in Ukraine and in the region of Northern Syria.

Dossier: Facebook
Mike Deerkoski
Good Night White Pride

Aktueller Termin in Wien

Konzert: neOanderthal

neOanderthal is a musical, sound and social experiment. It’s a live concert, without loops and based on an self-made instrument kit, whose materials are strictly recovered, recycled and played manually with different techniques.

Samstag, 4. Februar 2023 - 23:45 Uhr

VEKKS, Ratschkygasse 14, 1120 Wien

Event in Berlin

15th anniversary 

Samstag, 4. Februar 2023
- 23:00 -

Schicksaal - Tommyhaus

Wilhelmstrasse 9

10963 Berlin

More content...

Wir zahlen nicht, wir streiken.
Vorheriger Artikel

Vier sehr konkrete Forderungen

„Wir zahlen nicht – wir streiken“

Anarchist:innen in Minneapolis, Februar 2017.
Nächster Artikel

Das Soziale und die Gemeinschaft als Bezugspunkte

(Anti-)Politik im mutualistischen und kommunitären Anarchismus