In December 2015, Facebook CEO Mark Zuckerberg announced he would transfer 99 percent of his Facebook shares—a sum currently valued at $45 billion—to the new Chan Zuckerberg Initiative, a philanthropic endeavor that will be led by Zuckerberg and his wife, Dr. Priscilla Chan.
The Chan Zuckerberg Initiative LLC raised the question about why some philanthropists choose a limited liability company (“LLC”) instead of a private non-operating foundation (“foundation”) to carry out their mission. The move sparked much discussion about their innovative approach to giving. For philanthropists considering a similar approach, there are several key issues to consider.
In selecting the appropriate entity, at a high level, philanthropists should give thought to their mission and the types of organizations they want to support. Next, it is important to consider the types of assets that will fund their operations, the tax benefits and consequences, the timing of contributions and a donor’s comfort with potential loss of control and fulfillment of disclosure requirements.
Read the full article about LLCs and Foundations by Susanna Poon.
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