Every parent knows the biological intoxication — at least for a few weeks — of having your first child. That, plus living in California and being a technology idealist, may account for the somewhat sappy tone of Mark Zuckerberg’s letter this week to his new daughter Max, in which he announced that he will devote 99 per cent of his $45bn wealth to good works.
The Facebook founder’s pledge, with his wife Priscilla Chan, of “a moral responsibility to all children in the next generation” is no doubt deeply felt and genuine. It also has a coolly rational outcome — that he can demerge two things that have been mixed up in a single corporate structure: Facebook and philanthropy. The “social mission” he declared at Facebook when it went public in 2012 now has another outlet.
Warren Buffett has no higher social purpose for Berkshire Hathaway than achieving strong returns for shareholders; nor did Bill Gates for Microsoft when he was running it. The $41bn Bill & Melinda Gates Foundation, to which Mr Buffett has promised to donate much of his wealth, is their main vehicle for venture philanthropy, impact investing, or call it what you will. Like Sergey Brin and Larry Page, Google’s founders, Mr Zuckerberg has until now combined running a corporation, investing in offbeat ideas and making the world a better place. His letter to investors in Facebook’s initial public offering was more sober than this week’s missive but shared some of the same idealism, with its talk of creating “more direct empowerment of people”.
Mr Page unveiled his unbundling in August by placing Google under Alphabet, a holding company that will take “moonshot” bets on new ventures such as high-altitude balloons to spread internet access to poor countries and remote areas. They are long-term investments of the kind Mr Zuckerberg’s new venture can make, although Alphabet is not philanthropic.
The Chan Zuckerberg Initiative — the quaint title for their joint venture, which will seek profits as well as making donations — goes a step further. The Chan-Zuckerbergs will attempt to “advance human potential” and promote social equality with measures that will include “long-term investments over 25, 50 or even 100 years”.
This is a simpler way to aim at such outcomes than including them as an ancillary target for a company that is focused on other things, whether social networking or search. An ambitious ethical stance is bound to make investors uneasy because they do not know what it involves — does linking communities mean manufacturing mobile phones or drilling a tunnel through the centre of the earth? Facebook’s mission will no doubt stay in place but this takes the pressure off. Mr Zuckerberg has been wooing China — learning the language and making frequent visits — although his IPO letter included a call for “more accountability for officials,” which probably goes down badly there. Dividing Zuckerberg the chief executive from Zuckerberg the political idealist may help.
While separating public company from private philanthropy brings greater clarity and freedom of manoeuvre to both, it does not make the latter either simple or cheap. Mr Zuckerberg’s aside to his daughter that he knows $45bn “is a small contribution” to changing the world reads like a billionaire’s false humility, but he is right.
In some ways, Mr Zuckerberg is following Andrew Carnegie, the steel magnate, who founded a network of 1,700 public libraries in the US. Carnegie argued in his essay, “The Gospel of Wealth” (1889), that industrialists should “busy themselves in organising benefactions from which the masses of their fellows will derive lasting advantage,” rather than leaving their money to their children.
The Chan-Zuckerbergs’ worries about inequality mirror those of Carnegie, who observed “the contrast between the palace of the millionaire and the cottage of the labourer” in the age of US industrialisation. He concluded of capitalism: “It is here; we cannot evade it; no substitutes have been found; and while the law may be sometimes hard for the individual, it is best for the race.”
They have set themselves a more complex task than Carnegie faced a century ago — namely, to find innovative ways of addressing intractable global issues. Darren Walker, president of the Ford Foundation, wrote recently that Carnegie’s wealth was “a pittance in comparison with the world’s trillions of dollars of needs for food and housing, education, infrastructure and healthcare” (even if the foundation bearing his name is still making inroads into them).
Solving what Mr Zuckerberg tells Max will be “the biggest opportunities and problems your generation will face” is another order of challenge to managing Facebook. “The new generation of philanthropists wants to believe there is a clever ‘hack’ for every problem,” Sean Parker, the entrepreneur and former Facebook executive, wrote in June. For some problems, there is not.
Mr Zuckerberg has clearly learnt lessons from his $100m donation in 2010 to support reform of New Jersey schools, which soon ran into difficulty. Changing societies requires more time, more money and greater willingness to suffer frustration than launching a new product. It is hard enough for one organisation to do one, let alone both.
When Max grows up, her mother and father can teach her about that.
