Mark Zuckerberg has defended the unusual company structure chosen for the eye-catching philanthropic venture launched to celebrate the birth of his daughter, Max.
He will give away 99% of his stake in Facebook, worth $45 billion, to fund the Chan Zuckerberg Initiative.
Rather than set up a simple charity, the Facebook founder formed a limited liability company (LLC) to administer the money.
An LLC brings certain tax exemptions but also allows investment for profit.
Critics have said the structure of the Chan Zuckerberg Initiative could provide a way for Mark Zuckerberg to avoid paying tax on the sale of his shares. They have also questioned why he did not set up a not-for-profit charity instead.
An LLC allows Mark Zuckerberg to keep hold of the voting and allocation of the shares he puts into it.
In a Facebook post on December 3, Mark Zuckerberg explained his reasons for creating an LLC instead of a not-for-profit organization and said he and his wife, Priscilla Chan, will pay capital gains taxes when their shares are sold by the company.
“By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively,” he said.
“In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not.
“And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC,” Mark Zuckerberg added.
The new charitable organization is aimed at “advancing human potential and promoting equality for all children in the next generation”.
Mark Zuckerberg and Priscilla Chan’s shares will be donated over the course of their lives. They have already committed $1.6 billion to philanthropic causes according to a Facebook statement.
US NGO Save the Children has been ordered to leave Pakistan, with an official accusing the charity of “anti-Pakistan” activities.
Police have sealed off the charity’s offices in Islamabad and foreign staff given 15 days to leave the country.
Save the Children said it “strongly objected” to the action.
Pakistan has previously linked Save the Children to the fake vaccination program used by the CIA to track down Osama bin Laden.
Save the Children has always denied being involved with the CIA or Pakistani doctor Shakil Afridi, who carried out the program.
The NGO has no foreign staff in Pakistan as they were forced to leave after the accusations emerged in 2012.
Save the Children now has 1,200 Pakistani staff working on projects in health, education and food, the charity said.
The charity, which has operations all over the world, has worked in Pakistan for more than 30 years.
The Pakistani government has not given a formal announcement explaining the decision.
However, one official told the AFP news agency: “Their activities were being monitored since a long time. They were doing something which was against Pakistan’s interest.”
A police official said that Save the Children’s phone calls and offices had been placed under surveillance. Speaking to the Reuters news agency, he added that the charity’s activities were “very suspicious”.
Condemning the move, Save the Children said it was “raising our serious concerns at the highest levels”, adding that its workers were all Pakistani nationals.
A Save the Children official told Reuters that the Pakistan government had been stopping aid shipments entering the country, “blocking aid to millions of children and their families”.
It comes after the Pakistani government announced it was tightening the rules for NGOs, revoking several of their licenses.
Meanwhile, the Norwegian Refugee Council has ceased all operations in Pakistan as its license has not yet been renewed.