Right, so the article was wrong? He only gets a tax deduction for the amount of money that his foundation gives to actual charities? I imagine at some point the Foundation will also set up a charity that they can donate to for activities that would be legal for a charity to do.
Eh, very nice. And how’d he get that money, eh? By exploiting the workers. By hanging on to outdated imperialist dogma which perpetuates the economic and social differences in our society. If there’s ever going to be any progress–
If any workers in history could never complain of being exploited its probably Facebook and Google which are extremely hard to get into and pay very well.
The difficulty with all the commentary is that there is an element of damned of one does, and damned if one doesn’t.
Full non-profit charitable entities are not always the pure white honest entities one might wish them to be. The depressing reality is that many become self perpetuating entities that are run by a professional board and executives that can be far more focussed on maintaining very high board fees and executive salaries. All they need do is ensure that they meet the letter of the law on how they operate. Aggressive action to solve real problems is not always high on the agenda.
If it is your money, and you sincerely want to make a real difference, not just move money about, what Zuk is doing is clearly the right answer. Sure, he may make a bad call from time to time, everyone does. It is however more likely that in the long run he makes more good calls that actually make a difference, rather just handing the money over to a set of professional charity managers, who may well choose to simply give the statutory 5% to other non-profits that are run by their mates in the non-profit management business. (Colour me cynical here, but the problem with the rise of the mega charity is a worldwide issue.)
As noted above. Zuk can direct the foundation do things a charity cannot. Investing in areas that may make a difference way past just handing over money is clearly something that any rich techno-geek will want to do. Inventing in say: renewable energy technology, third world initiatives such as micro-loans, infrastructure projects and so on. Just handing over money is rarely the answer in enabling people to improve their lives. Yet charities are restricted from engaging in more interesting strategies.
The criticisms of Zuk’s actions do seem to smack of the usual jealousy of the rich. No matter what he does there will be something to criticise. Especially for those the hang on to outdated dogmas of all kinds. It also tends to have a very naive idea of how and where the money in question came into existence, and just why Zuk is constrained in how can actually do this.
Here is another good article from the NY Times that goes into a bit more detail about the implications of using the LLC. As stated above, it’s neither a tax dodge nor a loophole; in fact their potential tax liability is exactly the same if they hold the stock personally or in the LLC. All it does is provide them an organizational tool for managing this wealth how they see fit.