In “Is the new Zuckerberg fake charity an estate tax avoidance scheme?” I looked at the implications of Mark Zuckerberg putting $45 billion into a standard for-profit LLC that is owned by himself and other family members.
New Yorker magazine assigned its top financial correspondent and its team of fact-checkers to produce this article on Zuckerberg’s financial shuffle. It starts “When Mark Zuckerberg, the C.E.O. of Facebook, announced that he would be donating ninety-nine per cent of his Facebook stock to a new nonprofit organization … the donation …”
Yet even Zuckerberg’s PR team hasn’t characterized the for-profit LLC as a “nonprofit organization” (typically organized as a C Corporation and then applies for 501(c)(3) status). And the use of the word “donation” is kind of strange when the money is either not changing ownership (Zuckerberg personal account to Zuckerberg LLC shares owned by Zuckerberg) or moving from parent to child (Zuckerberg personal account to Zuckerberg LLC shares owned by kid).
The rest of the article goes on to talk about “foundations” and “philanthropies,” neither of which would seem relevant to this new for-profit LLC.
I’m not surprised that a member of the general public would have seen the headlines on this Zuckerberg family restructuring and remembered “donation” and “charity”. But how is it possible that New Yorker and its fact-checkers would conflate these concepts?