Facebook founder and CEO Mark Zuckerberg’s December 1 announcement that he and his wife, Priscilla Chan, plan to give 99% of their Facebook shares “during our lives” to charity has sparked discussion about both the importance and essence of philanthropy.
Zuckerberg estimated in his open letter to his newborn daughter Max, which he posted to his Facebook page, that the shares that both he and Priscilla’s own are worth US$45 billion.
He plans to launch a new organization, the Chan Zuckerberg Initiative, which will manage the charitable investments.
“Our initial areas of focus will be personalized learning, curing disease, connecting people and building strong communities,” Zuckerberg wrote.
“We’ll share more details in the coming months.”
A Facebook filing noted that its 31-year-old founder would not sell or gift more than US$1 billion worth of Facebook shares each year for the next three years and that he would continue to have a majority voting stake in the company.
Given that 1% of US$45 billion is US$450 million, it is unlikely that Zuckerberg’s standard of living would change much even if he gifted the entire amount tomorrow, according to two Vancouver philanthropists.
"Huge wealth doesn’t change your lifestyle very much," said Beedie Development Group principal Ryan Beedie, who is known for charitable donations such as a $22 million gift to Simon Fraser University’s Beedie School of Business. "Once you get to a certain point, there’s only so many houses you want. There’s only so much you can spend your money on.”
Beedie has also given large gifts such as $1 million to Bono’s ONE Campaign.
“My personal lifestyle has gone up in the past five to 10 years although it has always been great," Beedie told Business in Vancouver from New York, where he had marked World AIDS Day by attending a ONE campaign event .
He said Zuckerberg’s gesture is not only a necessary part of the social contract that underpins capitalism but that it will also encourage others to give more generously.
Kingswood Capital Corp. principal and philanthropist Joe Segal, who, together with wife Rosalie Segal, has given gifts, such as $12 million to help build a mental health facility at Vancouver General Hospital, agreed.
“[Zuckerberg’s generosity] is wonderful. It will encourage people to give,” Segal told BIV December 2. “But he is not giving away 99% of his wealth today. He’s giving away his Facebook shares but who knows what else he has. He probably cashed in $15 billion or $20 billion when Facebook went public.”
Earlier this year, Segal told BIV a story about what he considered true philanthropy and one that illustrates that giving should not be measured by sheer size but rather how much it affects someone’s standard of living.
He described a “little old lady living on a pension whose husband, a longshoreman, has died.”
The widow has been struggling since her husband’s death and lives on a modest pension in a house on a 25-foot lot in East Vancouver, Segal said.
“Taxes were $400 per year but now they’re $8,000 per year because the land value has gone up,” Segal said.
“She wants to live there until she dies. So, there’s a knock at the door. It’s near Christmas and it’s the Salvation Army. She starts to say ‘No,’ but then says, ‘Just a minute.’ She goes to the cookie jar that has a grocery list and money. She takes money out and goes to the door. ‘Here’s $20.’ Then, she crosses items off her grocery list. Giving is not always measured by the size of the gift.”
Segal then said that he has always given donations “in keeping with what I could afford to give. Never less, never more.”
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