Mark Zuckerberg did not just donate $45 billion of his Facebook stock to charity. Perhaps you read this on the internets. It is not true.

“Here’s what happened instead,” explains the New York Times' Jesse Eisinger. “Mr. Zuckerberg created an investment vehicle. Sorry for the slightly less sexy headline.”

The distinction matters. In the U.S., LLCs like the one the Zuckerberg Royal Family just unveiled can do all sorts of things in the name of social good, like make investments in clean technology or lobby for political change. That's not the same thing as “charity.”

In announcing the birth of his daughter, he and his wife, Priscilla Chan, declared they would donate 99 percent of their worth, the vast majority of which is tied up in Facebook stock valued at $45 billion today.




In doing so, Mr. Zuckerberg and Ms. Chan did not set up a charitable foundation, which has nonprofit status. He created a limited liability company, one that has already reaped enormous benefits as public relations coup for himself. His P.R. return-on-investment dwarfs that of his Facebook stock. Mr. Zuckerberg was depicted in breathless, glowing terms for having, in essence, moved money from one pocket to the other.