Why is it problematic when a businessman pledges to donate 99% of his personal shares in company stock (valued close to $45 billion) to philanthropy?
The popular argument against Facebook CEO Mark Zuckerberg’s display of altruism is that it is not a charitable donation; by the letter of the law he is funding a LLC, Chan Zuckerberg Initiative, rather than a 501(c)(3). This means the activities *for the public good* will include private investment and policy debates, activities not allowed under the legal jurisdiction of non-profit status. This has been called philanthrocapitalism, tax-efficient generosity that allows the richest Americans greater latitude in which to use their finances for ideological purposes.
The argument for such legal maneuvering of philanthropic endeavors is pragmatic; there is longstanding, government-rewarded benefit in establishing a for-profit mechanism within a donation initiative. These benefits are usually addressed as opportunities to react to changing landscapes and partnership needs working between organizations and governments, which under charitable trusts is not as nimble as it is for an organization unencumbered by tax-exempt status. Whereas there is a gravitas toward the Annenberg Foundation or the Hewlett Foundation as patriarchs of domestic and international philanthropic efforts, part of their infrastructure is an inability to pivot their strategy. Chan Zuckerberg Initiative will not find its aims beholden to a singular mission; this makes them different from groups such as Riordan Foundation funding SMART Boards as evidence of scholastic merit despite ample evidence to the contrary. They can adapt, change, innovate.
I trust Mark Zuckerberg’s purpose for this movement is principled more than it is pragmatic. I find the LLC vs 501(c)(3) argument a straw man one as well; there are many ways he can use the money, many ways he can use the money in what we call a charitable fashion. The LLC in and of itself is not evidence of nefarious plans, nor is announcing a donation of 99% of his wealth to bettering the public good.
I have gone out of my way to not refer to the pledge of $45 billion as charity or philanthropy, however. While his intentions may be for the public good, they as misguided and harmful. Moreover, it is indicative of social and cultural erosion, showing a social structure where monetary success is not only more important than field-specific expertise but it purports the wealthy to an illusory status of Renaissance Men, their successes not narrow but holistic evidence to solve the problems of All Others.
John Cassidy’s critique in the New Yorker goes out of its way to steer clear of education debates, but Zuckerberg’s history as a donor to education reform is quite germane to the discussion. In America, access to quality education is promoted as an inalienable right. Education has long existed as a social structure, evidence to how our society views its purpose. Efforts to improve student achievement are going to be bound in equity and access. I struggle to think about student achievement conversations where we require charity or philanthropy in order for all citizens to have equal access to their inalienable right. When Zuckerberg gave $100 million to Newark Public Schools, it was a strings-attached political donation, not charity. Improving student achievement took a backseat to the politics of merit pay and consultancies for new bureaucratic management. This is not surprising; historically, merit pay and administrative overhead do not improve student achievement.
What does improve student achievement? The financial situation at home. Caroline Hoxby of the Hoover Institution, a conservative think tank, notes the most efficacious way to improve the outcomes of the lowest income students is to put money in the pockets of their parents. The United States as a society does not believe in direct wealth redistribution, however, so our distribution metrics are almost entirely geared toward education services. Hoxby argues that the schools receiving these distributions are flawed and charter schools are the solution, which is where I disagree — if family finances are the most compelling indicator of success, then the efforts at school are always going to be secondary, no matter how efficacious the school experience.
The past solutions and future reform thinking presented by Mark Zuckerberg does not involve income redistribution or even support services beyond school walls. Most likely, Chan Zuckerberg Initiative will develop more structures and systems that can function independent of the educational infrastructure. Mark Zuckerberg’s public statements on education reform support merit pay and personalized learning, contentious ideas considered discredited by many. The genesis of both beliefs are evident within the start-up culture that fostered Facebook, where meritocracy reigns supreme and *coding* can do as much for human equity as government. In the world of Mark Zuckerberg, supporting these missions with wealth and political force is not only sensible but an obligatory service to the public good.
The libertarian dreamscape of start-up culture does not, however, fiat to the bureaucratic labyrinth of education. Charter schools have not circumvented governmental obstacles, and early forays into technosolutionism have fallen flat. If governance is inextricable from education (a notion supported from the Enlightenment to today), any effort to avoid its shadow is doomed. To argue that education is not a public good could create space for the success of such efforts, but the purpose of philanthropy such as the Chan Zuckerberg Initiative is marketed as service to the public good.
The best provision for positively influencing the education system is to provide for it through established, research-solidified channels. That means trusting the experts and using the leverage that comes with $45 billion to support multiple existing systems rather than building multiple new ones. But the ethos of Silicon Valley is to fail fast and to Fail Better, which is fine for privately traded companies made up of wealthy employees but a terrible framework to put on a social superstructure that has promised since the Enlightenment to be humanity’s conduit for upward mobility and social justice. It is not in the public good for schools to fail fast and Fail Better. In Silicon Valley it is okay for Udacity to fail with its SJSU roll-out or for Facebook to fail with its Newark Public Schools roll-out. These are companies with venture capital to cushion the hiccups, and even if the failure led to the end of the company, society only loses an instance of software-as-a-service. When the educational experience at SJSU turns out worse because of Udacity, or Newark Public Schools go through tremendous upheaval for no discernible benefit thanks to Facebook, our culture loses much more than the money it cost to put on the failed initiative. No matter the talk of learning from mistakes or doing better, the system has yet again failed, and the structure in place to mitigate that failure and was circumvented is left to glue the pieces back together. The students in these
classrooms incubation labs have been failed to a significant degree, more so than any Fail Better rhetoric can fix.
The creation of Chan Zuckerberg Initiative, LLC, is a protection mechanism. Most writing has focused on how it protects the financial portfolio of the Zuckerberg family, but the real protection is of their philanthropic legacy. They can talk about the public good and act by pushing money and policy toward ideology and push-button solutions, apologizing when its results are not as intended and promising to do better with the rest of the billions. The right decisions for the legacy of the philanthropist do not become the right policies for the philanthropy because they were borne of good intentions. There is an inherent flawed logic to the idea that saving the world is a private enterprise.