How philanthropic tech billionaires like Mark Zuckerberg can change the world

As new parents Mark Zuckerberg and Priscilla Chan give away their Facebook fortune, James Ashton looks at how tech billionaires can change the world
Greeks bearing gifts: Mark Zuckerberg and Priscilla Chan Zuckerberg
AP
James Ashton3 December 2015

When legendary American investor Warren Buffett pledged nine years ago to make an annual gift of shares to the Bill & Melinda Gates Foundation, provisions were made for the time when he dies or becomes incapacitated.

“My doctor tells me I am in excellent health, and I certainly feel that I am,” wrote Buffett, who intended to write a new will so that the giving programme could continue long after he did. Now aged 85, his commitment is worth $2.2 billion a year. Including four family charities, Buffett has given away $22 billion and counting.

In contrast, 31-year-old Mark Zuckerberg is starting early. Rather than having to take into account the potential for his death, the Facebook tycoon’s giving pledge was sparked by a new life. The birth last week of his daughter, Max, prompted an open letter promising that he and his wife, Priscilla Chan, would give away 99 per cent of their Facebook shares during their life — a pledge currently worth an eye-watering $45 billion.

The newly-formed Chan Zuckerberg Initiative aims to “advance human potential and promote equality in areas such as health, education, scientific research and energy”. With some understatement, Zuckerberg wrote on his Facebook page: “We know this is a small contribution compared to all the resources and talents of those already working on these issues. But we want to do what we can, working alongside many others.”

It doesn’t matter what he thinks. The gesture earned comparisons with Buffett, Microsoft co-founder Bill Gates — who swapped computing for charitable activities at 45 — and before them, John D Rockefeller and Andrew Carnegie, philanthropists from a different era whose names still adorn medical research centres and libraries.

Mark and Priscilla Zuckerberg have pledged to give away 99 per cent of their Facebook shares during their life
Getty

“Commitments like this from the next generation of young entrepreneurs mean the world can and will sort out its remaining problems,” wrote Sir Richard Branson. Gates’s wife Melinda, whose foundation funds healthcare research and anti-poverty programmes and is worth $41.3 billion, having given away more than $34 billion, added: “As for your decision to give back so generously, and to deepen your commitment now, the first word that comes to mind is: wow. The example you’re setting today is an inspiration to us and the world.” Billionaire former New York mayor Michael Bloomberg went one further, throwing down the gauntlet to others, saying: “Mark’s decision shows that when it comes to philanthropy, 30 is the new 70. The only question now is: how many of his peers in Silicon Valley and beyond will join him?”

Quite a few. As easily as this generation of tech entrepreneurs appear to earn great sums, the trend for spending them on good causes is on the rise. Setting the bar this high by promising to give away 99 per cent of his fortune might even lend a new definition to “the one per cent”, the super-rich elite which accounts for an ever-greater share of the world’s wealth.

But Zuckerberg has long proved to be more than just another super-rich entrepreneur or a jeans- and hoodie-wearing boffin made good. In just over a decade since he dreamt up the idea for Facebook in his Harvard dorm room, he has demonstrated staying power, long-term vision and cannily surrounded himself with brilliant people.

Zuckerberg met Chan, 30, at a Harvard party in 2003
Reuters

Chief among those is Sheryl Sandberg, the Lean In author and a former chief of staff to Larry Summers when he was US Treasury Secretary, who was poached from Google. As Facebook geared up to sell stock publicly, Zuckerberg was characterised as the geeky brain to Sandberg’s business brawn, but he has long since come of age.

He might have cashed in in 2010, when Microsoft offered $15 billion to take over the company that is today valued at more than $300 billion. Instead, you get the feeling that he is just getting started in business, as well as in philanthropy.

This summer, when Facebook passed the milestone of one billion daily users, Zuckerberg wrote that “it’s just the beginning of connecting the whole world”. On the drawing board the company has satellites to beam the internet into remote parts of Africa. The Facebook family also includes Instagram, home of the selfie, which now has more active users than Twitter. And then there is the big bet placed on virtual reality expert Oculus Rift. Tech blogs are abuzz with rumours that the launch date for its headsets — set to be one of the hottest gadgets of 2016 — could be revealed any day now.

There are also bones of contention, such as Facebook’s disinclination to pay much UK corporation tax in Britain — just £4,327 last year, when 362 UK staff bagged £35 million in share bonuses — and cookies that collect data about its users on websites and devices. And then there is the tense relationship with some newspaper groups it is encouraging to publish articles straight onto its platform instead of driving traffic to their websites. No wonder its mantra used to be “move fast and break things”.

For a company that has grown hugely in value from harvesting personal information about its users, Facebook bosses aren’t shy about sharing their feelings on social media. This summer, Sandberg wrote with searing honesty about the loss of her husband Dave Goldberg in May: “I think when tragedy occurs it presents a choice. You can give in to the void, the emptiness that fills your heart, your lungs, constricts your ability to think or even breathe. Or you can try to find meaning.”

When Zuckerberg announced that he and Chan were expecting a girl, he also revealed that the couple had suffered three miscarriages, writing: “It’s a lonely experience. Most people don’t discuss miscarriages because you worry your problems will distance you or reflect upon you — as if you’re defective or did something to cause this. So you struggle on your own.”

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Zuckerberg met Chan, 30, at a Harvard party in 2003. She worked as a paediatrician at San Francisco General Hospital and is said to have strongly influenced his philanthropic efforts. He has already signed up to the Giving Pledge, a commitment by the world’s richest individuals to dedicate most of their wealth to philanthropy, and begun giving away hundreds of millions of dollars.

This week’s announcement goes further. Zuckerberg will sell no more than $1 billion (£670 million) of Facebook stock each year for the next three years. He also intends to hang onto his majority voting position for the foreseeable future and to remain as chief executive “for many, many years to come”.

See how those numbers stack up against the annual income of one of Britain’s most prominent charities, Save the Children UK, which stands at £370 million, or the £800 million that the Wellcome Trust spends advancing medical research each year, funded by an £18 billion endowment, and you start to see the potential impact.

Then consider that within Zuckerberg’s lifetime his wealth could be worth much, much more. Facebook shares have almost tripled since they floated in 2012.

Questions are been asked as to why the Chan Zuckerberg Initiative will be a limited liability company rather than taking a more conventional charity structure. The explanation appears to be that it gives it more flexibility to make investments designed to turn a profit, as well as political donations. In the pantheon of grand, generous gestures, what’s not to like — especially if other entrepreneurs follow in his footsteps?

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