Mark Zuckerberg’s Charity: The Problems with Hacker Philanthropy

If Zuck wants a ‘gives 99% to of his stock to charity’ headline, he ought to earn it – by giving 99% of his stock to actual charities. Charities that aren’t named after him.  Charities he doesn’t control.

— Ted Rall, CounterPunch, December 3, 2015

Philanthropy, by its very existence, operates as is its own justification. It is a self-serving economy of needs, the quintessential admission that the world is unequal, that poverty is necessary, and alleviation of it in modest amounts encouraged.

It provides a moral imperative for a guilty conscience bruised by huge wealth; it keeps government from fulfilling its appointed role as service provider (why bother when the charity steps in?), and it supplements a privatised and uneven re-distribution system.

The modern species of philanthropist has also seen the technology entrepreneurs move into the market, the so-called “hacker philanthropists”. “A new global elite,” noted Sean Parker in the Wall Street Journal, “led by pioneers in telecommunications, personal computing, Internet services and mobile services, has claimed an aggregate net worth of almost $800 billion of the $7 trillion in assets held by the wealthiest 1,000 people in the world.”

Bill Gates has already placed his stamps over the establishment with varying degrees of effect, some of them disastrous.  Then there are the latter comers, those like Facebook’s Mark Zuckerberg, who wish to push their noses ahead in the donations game.  All share the fundamental belief that technology will do what governments cannot.

Facebook’s founder, like his colleagues, operates in the bubble of speculative wealth. It is the world of monetised users, data sales, marketing and stocks.  It is not one of construction, poverty alleviation or improving America’s (or any other state’s) mouldering infrastructure. Ted Rall goes further – it is wealth without any direct tangible benefits for US employment or social improvement.

The more cynical may also suggest that Zuckerberg’s creations emphasise activism as inactivism, the clicktocracy who assume that measurable, and relevant intercourse with human beings and history can take place because of a “like” on Facebook and metrics of use.

This fact may well have impressed him, and his wife, Dr. Priscilla Chan, as the share portfolio started to burgeon.  Charitable ventures have been tickling the couple’s intellectual fancy for some time.  On Monday, Zuckerberg, in joining Gates and other tech personalities, announced a philanthropic endeavour to combat climate change emphasising funding to clean energy initiatives.

Then came Tuesday’s announcement, made with his wife, that they would donate nearly all their money to philanthropic missions.  The birth of their daughter Max was taken as an ideal juncture of publicity, and she, as yet unable to read, received a letter from her parents:

The internet is so important that for every 10 people who gain internet access, about one person is lifted out of poverty and about one new job is created… If our generation connects them, we can lift hundreds of millions of people out of poverty. We can also help hundreds of millions of children get an education and save millions of people of lives by helping people avoid disease.

This awful, even juvenile techno-utopianism assumes that access to the Internet, which will enable a good deal of phenomenal time wasting to take place through such media as Facebook, will reduce poverty and eliminate disease. Naturally, more Internet access implies greater use of social media, including the tools Zuckerberg has been inserting into the market for some years.

The argument made by Zuckerberg behind his new philanthropic scheme is one of continued control – in short, money funnelled through his own charities.  Money, once granted to charities, tend to face restrictions that may hamper the donors.  Injunctions on political activity – and the continued interest in profit ventures – stand out.   Zuckerberg may be parting with his money, but his hand, exercised through his own limited liability company, will continue to move. Total divestment, in short, is an illusion.

Taking such a pathway would enable the Chan Zuckerberg venture “to pursue our mission by funding nonprofit organizations, making private investments and participating in policy debates – in each case with the goal of generating a positive impact in areas of great need.” The business theme, if you like, continues.

The announcement to shift 99 percent of his and his wife’s assets into a specially created limited liability company also raised a good host of eyebrows in other areas.  The first obvious point was the time scale – it would happen eventually, over the couple’s lifetime.  The second was predictable: such ventures look awfully like designs against tax collection.

To redress concerns about the venture being a tax minimisation venture, Zuckerberg argued that, if he and his wife had “transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC, we do not.  And just like everybody else, we will pay capital gains taxes when our shares are sold by the LLC.”

More to the point, such a gesture demonstrates a new condition, one that sees the technology billionaires take centre stage as saviours even as the world turns to glue, using a new form of self-interested philanthropy.  “The problem,” as David Auerbach suggests in Slate, “isn’t the intentions, but the belief that the unilateral throwing of money at a problem alongside performance-based metrics can solve any problem just as easily as they once enabled Windows to crush its competition.”

This is not meant to disregard the importance of philanthropic projects, per se.  Situations of improvement have been noted, though these, such as public health programs, tend to take place in circumstances where existing infrastructure benefits from injection of fresh capital. Supporting roles, suggest Auerbach, rather than structuring ones, are what counts in this business.  Absent that, we are back to the techno illusionists, the Zuckerberg school of thinking that a click and a “like” will save the earth.

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: Read other articles by Binoy.