Mark Zuckerberg crafts new approach to philanthrophy

Mark Zuckerberg's pledge to devote 99 per cent of his Facebook shares to philanthropic causes was immediately notable for its size – $45 billion (€42 billion) at the current stock price – but the way he has crafted the promise may ultimately be as significant as the amount.

By creating a limited liability company to use the money for political activism and for-profit investing, as well as traditional giving, Mr Zuckerberg revealed how a new generation of Silicon Valley entrepreneurs may approach the philanthropic world.

Established donors lined up to praise the 31-year-old Facebook founder’s initiative and to urge other tech entrepreneurs to follow suit, while philanthropy consultants said Mr Zuckerberg’s use of an LLC would give him wide latitude to pursue his goal to “advance human potential and promote equality for all children”.

Mr Zuckerberg and his wife Priscilla Chan announced their plans on Tuesday along with the birth of their first child, Max, and wrote a public letter to their daughter promising to make long-term investments, build new technologies and shape public policy to solve the world's biggest challenges.

In an accompanying video posted on Facebook, Mr Zuckerberg said improving education, advancing science and strengthening communities involved “big complex systems” and that “it is hard to move these things in the short term”.

Clean energy

His announcement came a day after he joined the

Breakthrough Energy Coalition

, a group of billionaires promising to invest in clean energy technology to bridge a “near impassable valley of death” between promising concepts and viable products.

In contrast to traditional foundations, LLCs are able to engage in public policy advocacy and for-profit investments that can also advance their favoured causes.

– Copyright The Financial Times Limited 2015