The birth of their daughter inspired Facebook CEO Mark Zuckerberg and his wife Priscilla Chan to take #GivingTuesday to a new level. On the global day for giving back, the same Facebook post that welcomed Maxima Chan Zuckerberg to the world also announced the birth of the Chan Zuckerberg Initiative.
“We wrote a letter to her about the world we hope she grows up in,” Zuckerberg posted in a Facebook status linking to a letter that expands on the decision he and his wife made to give 99 percent of their Facebook shares, valued at about $45 billion dollars, over the course of their lives to “make the world a better place” for Max and all children.
Drawing on their own experiences, Zuckerberg and Chan are prioritizing personalized learning, internet access, community education, and health as part of a stated mission of “advancing human potential and promoting equality.”
Many questions remain unanswered, with “Mom and Dad” promising more details in the coming months once they return from maternity and paternity leave. In the meantime, Devex spoke with philanthropy experts about the significance of the announcement and the impact the Chan Zuckerberg Initiative could have on global giving.
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Peter Singer, a leader of the effective altruism movement that emphasizes the importance of maximizing the dollars and hours we spend to do good, told Devex he was delighted by the news of the Initiative. But, he said, it remains to be seen how the money will be spent and to what extent the work will be backed with evidence.
“It's very good that Chan and Zuckerberg are setting such an example to other very wealthy people. So it covers the ‘altruism’ part of effective altruism,” he wrote Devex via email. “Without knowing how they will use the money, it's hard to say how well it covers the ‘effective’ part.”
In a section of their letter focused on plans for personalized learning, Chan and Zuckerberg say they are starting in the San Francisco Bay Area as part of an effort to engage with communities.
"Starting in the local context would be expected given their personal connection to the area," Marc Ross Manashil, a philanthropic consultant based in Oakland, California, told Devex.
He added that while it makes sense for Chan and Zuckerberg start in an area they know well, he hopes their philanthropy will follow a similar trajectory to Facebook, starting locally then quickly growing to become a global phenomenon.
The more philanthropists like Chan and Zuckerberg focus resources on the global poor, the better results the global community can expect to see, Singer said.
Development professionals should take note of the new approaches to philanthropy Zuckerberg and Chan call for in their letter: making long term investments, understanding the needs of the people they serve, putting technology and innovation at the center of their work, participating in policy and advocacy, partnering rather than duplicating efforts, and taking risks and learning lessons. Zuckerberg and Chan also admit that they do not have all the answers.
“We're early in our learning and many things we try won't work, but we'll listen and learn and keep improving,” they wrote.
Manashil said he hopes Zuckerberg and Chan will continue to lead by example, from pointing to the power of the personal in philanthropy, to emphasizing collaboration within sectors and between sectors, to admitting that they are likely to fail before they succeed, to getting more people to give early.
In the Facebook comments on the post linking to his letter, Zuckerberg responded to Vindu Goel, a San Francisco, California-based technology reporter for The New York Times, who asked what prompted him to give away so much of his fortune so early in his life.
“Two main ideas have led us to start early,” Zuckerberg wrote. “First is that we have a lot to learn and giving, like anything else, takes practice to do effectively. So if we want to be good at it in 10-15 years, we should start now. Second is that any good we do will hopefully compound over time. If we can help children get a better education now, then they can grow up and help others too in the time we might have otherwise waited to get started.”
The pledge puts Zuckerberg and Chan in the same league with Bill and Melinda Gates, who launched their foundation, which now has a $41 billion endowment, in 2000.
“People are going to be looking to them in the same way they have looked to Bill Gates and this is an opportunity to show a different path forward for philanthropy,” Manashil said.
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“If I were giving them advice I would say get focused on transformation not disruption, which does not mean that you cannot innovate, but the innovation should come with the goal of transformation,” said Akhtar Badshah, an expert on philanthropy who formerly led global philanthropy at Microsoft.
Transformation must come from a combination of technology and policy over a longer timeline, he continued, also emphasizing the importance of an approach that values singles over grand slams, particularly when it comes to addressing global poverty.
Perhaps in part because of the failure of a $100 million gift Zuckerberg made to fix public schools in his home state of New Jersey, the Facebook CEO is joining a growing number of business leaders who are launching organizations of their own rather than giving their fortunes away in a series of hit or miss gifts.
But Zuckerberg and Chan are also positioned to gain from this gift. The vehicle for the $45 billion is an LLC, which will allow Zuckerberg and Chan to transfer their private assets into a family foundation without paying capital gains taxes. The move could also lead to tax benefits of as much as $333 million on the first $1 billion transfer.
“The decision to not call it a foundation is a very intentional decision that signals that they want to approach philanthropy in a different way which is potentially exciting,” Manashil said. “It depends on whether that difference is helpful or not.”
This $1 billion of Facebook stock each year represents a major influx of capital in what the Institute for the Future calls the second curve of philanthropy, in which people form networks for social impact, Badshah said. And he said their initiative has the potential to bridge the gap this organization and others have identified between philanthropic institutions and social innovators.
While $45 billion dollars over 45 years has the potential do a lot of good, many questions exist about how it will be distributed and how progress will be measured. The impact of the Chan Zuckerberg Initiative on global development remains to be seen, but it’s clear the founders know the world is watching.
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