70 Fla. L. Rev. F. 155 (2019)
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Florida Law Review Forum

Abstract

Professor Dana Brakman Reiser has once again produced work that invites us all to look at philanthropy and philanthropy law in a fresh way. In Disruptive Philanthropy: Chan-Zuckerberg, the Limited Liability Company, and the Millionaire Next Door, Professor Reiser provides what she calls, “the definitive explanation” for a trend in philanthropy: the “seemingly bizarre choice” by some charitable donors to do philanthropy using a for-profit vehicle, like a limited liability company, rather than a traditional non-profit charitable entity, like a private foundation. She argues that this trend is likely to grow, and increasingly more charitable donors are likely to make use of the “philanthropy LLC,” thus avoiding any regulatory function that the current legal regime provides.

But the key to understanding the philanthropy LLC—at least as exemplified by CZI—is that it is not so much used as a substitute for traditional charitable contributions as a delay in making them. As Professor Reiser points out, using a philanthropy LLC (rather than making one’s contributions to a traditional charitable entity all at once) gives donors “the ability to stage donations to take maximum advantage of deductibility.” In this way, philanthropy LLC is more like a method for making a charitable pledge (a promise to make contributions in the future) than it is like a substitute for a traditional charity, but it is even less binding than a pledge. So long as Chan or Zuckerberg is alive and want to control their own philanthropy (and manage their own tax liability), they need not be in any hurry to make irrevocable contributions to a charity. They can set aside the assets they intend to use for charity at some point and use them when they choose. Read More.