Zuckerberg has not donated anything, you gullible, credulous pinheads.

When a multi-billionaire puts out a press release saying that eventually they will transfer all-but-a-billion-or-so into a "charitable foundation" that they also completely control, that is not a donation, that is just moving your money from one bank account to another! And it's not even that, it's claiming that he's fixin' to get ready to do that some day.

I've even seen people saying, "I feel better about using Facebook now!" Fuck you.

This is just how billionaires launder money. It buys you good press and also gives you great opportunities to hand out million-a-year management salaries and board positions to your lesser cronies.

Save your applause for when he's actually built a desalinization plant or something, rather than being one of the primary drivers of the Public-Private Surveillance Partnership.

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37 Responses:

  1. Theodore says:

    Is it, like, a preemptive measure whether a nation in EU would like to try and sanction his corporation for the trillion of dollars of taxes evaded?

  2. totes what i've been thinking. I'll be on board once I see what they do with this foundation, a la bill/melinda gates foundation?

  3. b says:

    In case anyone wants to know what he really said:

    https://www.sec.gov/Archives/edgar/data/1326801/000132680115000035/form8kdec2015.htm

    JWZ is correct that it is a shell game but this was not "a press release." This was an actual 8-K filing which is legally more significantly than just just saying he is going to do something. That said, he absolutely controls both ends and will donate "up to 1 bn per year." And last I checked $0.00 also counts as "up to 1 bn."

  4. My praise for zuckerberg is limited to his $80 million donation to SF General and the $992 million he gave to Planned Parenthood. He doesn't get extra kudos for giving money to himself tax free.

  5. Jim Sweeney says:

    I would like to apply for one of those lesser crony jobs, Mr. Z.

    Obviously this charity needs an MC.

  6. "gullible, credulous pinheads" is a keeper.

  7. Also, you will notice he mentioned "Charity or Public Advocacy" or some shit like that.

    Basically, he could give all his money to a Super PAC and he would be doing what he said.

  8. I'm trying to find out and am not having any luck yet, finding the difference between the structure of his foundation and the Bill & Melinda Gates Foundation. What's the difference?

  9. Editer says:

    Bloomberg says it isn't even a charitable foundation, it's just an LLC.

    The vehicle can donate to charity, but it doesn’t have to give away some every year, as a foundation would. It can also make investments and participate in “policy debates.” That means it could turn a profit and make donations to political candidates and pay lobbyists.

    “This is not a charitable foundation,” said Victor Fleischer, a tax law professor at the University of San Diego. What they’ve done “is essentially nothing more than a promise to give some money to charity in the future. But the structure somewhat resembles a family office, used both for investment and charitable purposes. The level of activities in the charitable versus investment and political pieces isn’t specified.”

    • b says:

      To be fair this is very similar to google.org, which has under it a 501(c)(3) but is not non-profit itself. I think there are valid reasons why you might want to be for-profit and pay taxes - the ability to lobby and fund candidates is not stupid nor is the ability to capitalize and spin-off inventions into for-profit concerns. I mean, there are plenty of conservative super PACs so worst-case this is a flier on a possibly liberal one. And worst-case it's paying taxes.

      • Editer says:

        Fair points. The proof will be in the pudding, I suppose. As our host said, let's see if he actually does anything with it.

        • jwz says:

          It's possible that his heart's in the right place and he'll do wonderful things, but I'm just so sick of the shameless lack of critical examination that people -- and especially the so-called press, whose fucking job it is -- give to self-congratulatory press releases like this.

          And Zuckerberg is a master of getting the media lapdogs to give him credit for press releases that result in absolutely no change in behavior and that later turn out to have been bald-faced lies from the start.

          So, no, I'm not very confident that anything good will come of this, because he's a flat-out creep, with a terrible track record of lies that look a lot like this.

          • Different Jamie says:

            Quick media decoder ring:

            - one rich dude does something: "Look how great this is."
            - two rich dudes agree: "The newly elected senator from East Dakota announced..."
            - two rich dudes disagree: "The nation is divided over..."
            - several rich dudes disagree: "The market opened at..." or "The arial bombing campaign showed signs of..."

          • Martin Pomije says:

            Lack of critical examination is a plus for the press, which is business, after all. If they start to ask critical questions of the powerful they may be cut off from the flow of "news" that the powerful supply to them.

  10. b says:

    Here's a good read on google.org:

    http://www.nytimes.com/2006/09/14/technology/14google.html

    And the update on Chan Zuckerberg Initiative, LLC:

    http://www.nytimes.com/2015/12/03/technology/zuckerbergs-philanthropy-uses-llc-for-more-control.html

    Also, that is on creepy video. And I say that as a parent of 3 young kids. I would say it might even haunt the kid, but the 1% inheritance will smooth that right over.

  11. tape says:

    AND! it's not even actual money. He said he'd donate SHARES.

    • David says:

      nothing wrong with donating shares; it is pretty standard to avoid capital gains. you donate $1MM in shares that the charity immediately sells, they have $1MM cash; you sell first and then donate cash, there's a taxable event.

      • Cyril says:

        > nothing wrong with donating shares; it is pretty standard to avoid capital gains.

        One might say that's exactly what's wrong with it.

        The capital gains rate is already very low in the USA, 15%, and I'll assume a founder will pay 15% on the full sale amount due to a negligible cost basis. So if they sell $1B in stock, they'll get $850M in cash; then they can donate it and get a tax credit based on that $850M.

        If they donate the shares, they won't pay any tax and they'll still get a credit—but based on the full $1B amount. I'm sure that's really convenient if you have $1B and need to reduce your tax bill, but that doesn't make it good public policy. (I'm not saying it's not, but doesn't it seem a bit odd to give them a tax deduction when we didn't charge them any tax in the first place? Especially when not everyone agrees that large donation credits are a good idea in the first place, as jwz notes below.)

        • toast says:

          The capital gains rate on $1B is 20%, plus 3.8% net investment income tax; and Mr. Z lives in California, so add another 13.3% for state income tax, for a total of 37.1%; which is a little bit more than 15%.

          It would probably make more sense for donating stock to just be a tax credit of the cost basis, and you don't have to recognize the appreciation as income; but the current system is nice for handling cases where you don't know the cost basis: you could do a lot of research to find the cost basis so you can sell it and report it correctly, or you could just donate it and take the current value as a credit. Anyway, a lot of stuff in our tax system doesn't actually make sense, so if it's there, use it!

          • jwz says:

            so if it's there, use it!

            When your only defense of your position is, "Well, but, it's legal!" you have lost the argument. You also might be a sociopath.

  12. jwz says:

    This is a good point:

    Krämer: You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That's unacceptable.

    Spiegel: But doesn't the money that is donated serve the common good?

    Krämer: It is all just a bad transfer of power from the state to billionaires. So it's not the state that determines what is good for the people, but rather the rich want to decide. That's a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow?

    Spiegel: It is their money at the end of the day.

    Krämer: In this case, 40 superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. In the end the billionaires are indulging in hobbies that might be in the common good, but are very personal.

    • nooj says:

      It is their money at the end of the day.

      Krämer sort of said it, but no, in fact, it's not. Some of that money is tax that belongs to the state.

  13. Editer says:

    As Utah Phillips said, we need some Robin Hood bandits to balance out the philanthropists.

    A Robin Hood bandit gives away privately what he steals publicly, whereas a philanthropist ...

  14. Sunita Shukla says:

    It's okay. It's his money to invest any which way he wants to.... If he wishes to invest in humanitarian causes and keep a handle on it - more power to him. We have seen how unprofessionally managed non-profits have frittered away good money. My point of view!

    • jwz says:

      And if the press push about this event had been, "BREAKING: Zuckerberg has $45B and intends to do with it whatever he damned well pleases", then your comment would be relevant. But it wasn't.

    • Elusis says:

      We have seen how unprofessionally managed non-profits have frittered away good money

      Like the $100 million dollars he directed to New Jersey schools based on his idea of what schools and teachers needed, which wound up being an utter waste in terms of actually improving student performance? That kind of "unprofessionally managed"?

  15. Big says:

    From: http://blogs.law.harvard.edu/philg/2015/12/03/is-the-new-zuckerberg-fake-charity-an-estate-tax-avoidance-scheme/

    "Philip Greenspun's Weblog: Is the new Zuckerberg fake charity an estate tax avoidance scheme?"

  16. Steve Simitzis says:

    The better PR move would be to quietly do good stuff with the money, then build up good will for past accomplishments. And make sure one of those "good stuff" items is donating to fix the role of money in politics so you can credibly say you're not trying to build an oligarchy.

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