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Mark Zuckerberg, Venture-Capital Radical

The Facebook founder's unusual LLC philanthropy allows him to blur the lines between business, charity, and politics.

Imagine an organization that lobbies for progressive laws while providing venture-capital funding to techno-futurist endeavors. It gives to numerous charitable causes in its own region—funding homeless shelters, Boys & Girls Clubs, and other community organizations—while also participating in political advocacy and influence at the state and national levels. It spends a fortune every year on cutting-edge innovations in science and technology while funding a grade school designed to produce the next generation of left-wing activists. It leverages billions of dollars in assets for social change, all without the limits and transparency required of a traditional, nonprofit philanthropic organization.

The person behind such a project would have to be exceptionally creative, entrepreneurial, and innovative. He is—and his name is Mark Zuckerberg.

The world knows Zuckerberg for Facebook, but I’m talking about another venture altogether: the Chan Zuckerberg Initiative (CZI), co-founded in 2015 with his wife, Priscilla Chan. Like the enigmatic Emerson Collective run by Silicon Valley fellow traveler Laurene Powell Jobs, CZI is ostensibly a philanthropic endeavor, but it’s structured as a limited liability corporation (LLC), rather than a standard 501(c)3 nonprofit.

CZI does have several affiliate and subsidiary organizations, though, some of which are 501(c)3s. The Chan Zuckerberg Initiative Foundation, for instance, is a traditional grantmaking non-profit with $4,650,890,520 in assets according to its most recent financial statement. The Chan Zuckerberg Initiative Advocacy Fund is another affiliated non profit with $101,062,685.

While not a direct subsidiary, another CZI partner organization is FWD.us, a site which bills itself as backing bipartisan immigration reform. Zuckerberg started the site in 2013 along with other tech giants including Bill Gates; Drew Houston, co-founder of DropBox; and Sean Parker, who created Napster and was in early on Facebook (he was played by Justin Timberlake in The Social Network).

FWD.us claims to look for bipartisan solutions, stating on its website, “A majority of Americans support immigration and criminal justice reform, and we’re working with legislators and groups on both sides of the aisle to drive real change at the local, state, and federal levels.” But a statement issued shortly after the election suggests that “bipartisan” is really code for “liberal” here:

We want to congratulate President-elect Joe Biden and Vice President-elect Kamala Harris on their historic victory and celebrate the opportunity for progress it provides our nation.

As we saw with years of public backlash throughout President Trump’s entire term, voters from all walks of life repudiated Donald Trump’s anti-immigrant agenda, demagoguery, and xenophobia. President Trump made his assault on the immigration system and immigrant families a signature issue for his presidency, and the public voted him out.

Tech titans, of course, are not merely interested observers on the immigration issue. It’s no secret that Silicon Valley has benefited greatly from H1-B visas, which allow them to hire IT and other tech specialists from other countries, especially India and China. These foreign workers tend to work for less than their American equivalents, and there are longstanding complaints that the tech industry has abused the visa program.

Trump shut down H1-B Visas earlier this year, while Biden has shown himself much more Big Tech-friendly on this issue. As noted by immigration resource Path2USA:

Vice President Joe Biden’s victory in the US Presidential elections will be a victory for US immigration as well. Promising a comprehensive immigration reform, Joe Biden not only intends to increase the H1-B visa quota but also resume work permits for spouses of H1-B visa holders.

With an intention to reverse many of the restrictive immigration policies imposed by the outgoing Trump administration, Joe Biden is being hailed as the President that will bring fairness to skilled foreign workers that will support and improve the U.S. economy equally.

When it’s not pushing policies that coincidentally cut Silicon Valley’s costs, CZI directs many of its resources toward impact investing—one of the left’s preferred methods of social change, in which venture capital is directed specifically to startups expected to advance progressive goals.

One of its flagship projects is the Chan Zuckerberg Biohub, which supports forward-thinking medical research and technology. In the group’s own words: “At the Biohub, we actively nurture and create opportunities for leaders in science and technology to come together and drive discovery, setting the standard for collaborative science.”

Biohub projects include some mind-blowing research like the Cell Atlas initiative:

The Cell Atlas will be made available to researchers around the world, shedding light on the many different types of cells that control the body’s major organs, including the brain, heart and lungs.

This type of resource has never been created. Much of the technology necessary to complete the Cell Atlas was only developed recently. These new tools will be deployed at CZ Biohub and other participating institutions to map the cells of the human body in unprecedented detail.

CZI funds bio-imaging technology and open-source science research software in its portfolio as well.

Outside of the medical realm, CZI has devoted substantial capital to education technology. Some of the beneficiaries have been remarkably successful, such as Age of Learning, which created ABCmouse, a popular educational website for kids two to eight. Brightwheel, another recipient of CZI ventral capital, creates apps for early childhood education. Another, Eruditus, runs high-budget courses for corporate executives. CZI also recently devoted $6.3 million to “equity in education.”

Elsewhere, CZI’s educational ventures are overtly political. The Chang Zuckerberg Initiative is a key backer of PilotEd, a school initiative that utilizes a highly unorthodox, unabashedly progressive curriculum. PilotEd currently operates one school in Indianapolis, and is working on opening its second in Las Vegas.

A feature on CZI’s website boasts of PilotEd’s unconventional methods:

For students at pilotED, issues of identity are worked directly into the curriculum along with social-emotional learning. For example, a history lesson about Plymouth Rock includes the traditional story of the gathering of Pilgrims and indigenous people. But it also includes what is left out of traditional history books. Teachers talk with students about who they identify with in the story. Do they see themselves as someone who is persecuted for their beliefs or as someone who experiences genocide? The lesson would wrap up with a discussion on emotions and questions such as “What would it feel like if that was your family, or if it was your friend?”

The same feature opens with a glowing report on seven-year-old PilotEd elementary students being inserted into racial protests in Indianapolis this summer.

But even the intensely woke PilotEd is far from the LLC’s most explicit bit of politicking. In 2020, the Chan Zuckerberg Initiative dove headfirst into two key ballot initiatives in its home state of California. Here is more from their website:

Today, the Chan Zuckerberg Initiative (CZI), announced additional funding for two 2020 California ballot measure committees. This includes an additional $4.5 million in support of Proposition 15, which would restore an estimated $12 billion annually in much-needed local revenue to California communities by closing commercial property tax loopholes; and $1 million to the No on Proposition 20 campaign to oppose a measure that would incarcerate more people for low-level crimes and increase already bloated prison budgets.

The criminal justice reform also strikes a bipartisan tone on paper. CZI claims, “The justice system’s emphasis on punishment over rehabilitation profoundly impacts our communities. We’re focused on finding new ways forward by safely reducing incarceration, providing fair chances for those impacted, and lifting up the voices of people closest to the problem.”

One CZI-supported criminal justice program is Fair and Just Prosecution, which brings new prosecutors together to “talk about best practices”—effectively a brainstorm group for prosecutors. It’s an interesting program to consider in light of the coordinated campaign by left-wing mega-donors to fill prosecutors’ offices with progressives.

The CZI-opposed Prop. 20 was rejected handily in California’s November election. CZI’s favored Prop. 15, though—heavily unpopular from the start—was also rejected, by a much narrower margin. But this is not necessarily indicative of CZI’s potential to effect change.

It’s now the stuff of business legend that Peter Thiel, the founder of PayPal, was the original investor in Facebook. When Zuckerberg arrived in Palo Alto in 2004, he had a website with exponential growth in accounts but no revenue, let alone profits. A few short months later, Thiel famously invested the first $500,000 and several other rounds of venture capital followed. In May 2012, Facebook went public. Thiel sold off the majority of his stock that same year, with his half-million dollars netting nearly $1 billion. Zuckerberg has since created Facebook Live, bought WhatsApp and Instagram, and is now investing in virtual reality and artificial intelligence. Facebook is currently valued at around $800 billion.

Less well known, though probably more important, is that Thiel passed on several rounds of further financing, believing at the time Facebook was overvalued based on the money raised. He would later call these moves his biggest professional mistake, saying that he underestimated Facebook’s potential for exponential growth. In effect, Thiel underestimated Zuckerberg.

With CZI now likewise in its early years, nobody should make the same mistake again.

Michael Volpe has worked as a freelance journalist since 2009, after spending more than a decade in finance. He’s based in Chicago.



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