Source: China Real Time, WSJ (12/2/15)
It’s Complicated: Mark Zuckerberg’s Donation Spurs Philanthropy Debate in China
By Yang Jie
This image obtained December 1, 2015 courtesy of Facebook CEO Mark Zuckerberg shows Mark with his wife Priscilla with their new daughter Max. FACEBOOK/Agence France-Presse/Getty Images
As the world “likes” a move by Facebook founder Mark Zuckerberg to give away most of his shares upon the birth of his first child, some Chinese Internet users are asking: is it a kind-hearted gift or a tax dodge?
Mr. Zuckerberg used the occasion of the birth of his first child to announce that he and his wife Priscilla Chan will give away 99% of their Facebook shares, currently valued at about $45 billion.
One single post about Mr. Zuckerberg and Ms. Chan’s decision on Wednesday attracted 5,000 reposts and more than 10,000 likes in half a day on China’s popular social media platform Weibo.
Mr. Zuckerberg is a popular figure in China’s news and social media, with his eagerness to use his Chinese language skills and his familiarity with Chinese politiciansdrawing widespread attention even as his company’s website remains blocked in China.
But in recent years, Chinese citizens have struggled to trust charitable organizations and millionaires’ philanthropy. A number of scandals have left people questioning where donations go and whether some millionaires performing charitable work aren’t just seeking publicity for themselves instead.
Facebook Chief Executive Mark Zuckerberg talks with Chinese President Xi Jinping during a gathering of CEOs and other executives at Microsoft’s main campus September 23, 2015 in Redmond, Washington. Getty Images
Doubts about the philanthropist’s true intentions pop up quickly after any big donation.
“He is probably doing what every American millionaire would do — using a charity fund or trust as a means of tax avoidance,” one user wrote under the widely-circulated Weibo post. Wrote another: “It might only be a business move rather than a charitable one.”
Many others, however, defended the move. “Do you really understand how charity and tax avoidance work in the U.S., and what gives you the right to interpret others’ actions like this?” wrote one Weibo user. The comment was liked by hundreds of others.
The tax implications for Mr. Zuckerberg aren’t clear. Instead of a tax-exempt charity, Mr. Zuckerberg is placing the shares in a limited liability company, which can invest for profit.
In China, where parents are traditionally expected to leave all of their wealth to their children, debates like this often take place among Internet users, who have mixed feelings about wealth and philanthropy.
In August, the Chinese Internet lit up with criticism of Jack Ma, the chairman of e-commerce giant Alibaba, for his failure to donate money following a deadly explosion in Tianjin that killed more than 150 people.
Mr. Ma was rated as the most generous philanthropist in mainland China last year,according to the 2015 Hurun Philanthropy List.
“They criticize you when you donate and they criticize you when you don’t donate,” said one online commenter comparing Mr. Zuckerberg’s case to Mr. Ma’s previous experience.
A Facebook spokeswoman did not immediately response to a request for comment.
On the other side of the spectrum is Chinese real estate mogul Pan Shiyi, who made a high-profile donation last year – and came under withering criticism.
In July 2014, Mr. Pan and his wife Zhang Xin, founders of Chinese real estate company SOHO China, set up a $100 million endowment to send underprivileged Chinese children to elite universities around the world, starting with Harvard.
“Back then, lot of people on Weibo were criticizing us for donating the money to American colleges even if what we really aim for is to help Chinese students who want to study overseas but lack funding,” Mr. Pan told China Real Time by phone on Wednesday.
He offered some advice to those debating whether to make a similar move.
“Some people are going to mock you anyway, so just don’t let them get in the way of your doing good deeds,” Mr. Pan said.
–Yang Jie, with contributions from Li Yuan