NYT Smashes Zuckerberg’s "Donation"

In line with my earlier post: Mark Zuckerberg's Big "Donation" and His "Philanthropic" Efforts To Date, at NYT Jesse Eisinger takes the knife to  Zuckerberg’s "donation":

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

Here’s what happened instead: Mr. Zuckerberg created an investment vehicle.

Sorry for the slightly less sexy headline.

Mr. Zuckerberg is a co-founder of Facebook and a youthful megabillionaire. 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, Mr. Zuckerberg and Ms. 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 P.R. return-on-investment dwarfs that of his Facebook stock. Mr. Zuckerberg was depicted in breathless, glowing terms for having, in essence, moved money from one pocket to the other...

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 L.L.C. 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 Mr. Zuckerberg is relatively young to be planning to give his wealth away. “Mark Zuckerberg Philanthropy Pledge Sets New Giving Standard,” Bloomberg glowed. The New York Times ran an article on the front page. Few news outlets initially considered the tax implications of Mr. Zuckerberg’s plan. A Wall Street Journal article didn’t mention taxes at all.

 -RW