91 research outputs found
Charting No Man\u27s Land: Applying Jurisdictional and Choice of Law Doctrine to Interstate Compacts
Disruptive Philanthropy: Chan-Zuckerberg, the Limited Liability Company, and the Millionaire Next Door
Facebook founder Mark Zuckerberg and his wife, Dr. Priscilla Chan, have pledged to give 99% of their net worth to—in their words—“advance[e] human potential and promot[e] equal opportunity.” To make good on this promise, however, they did not set up a traditional nonprofit, tax-exempt organization. Instead, they founded the Chan-Zuckerberg Initiative, a limited liability company (LLC). The bulk of this Article provides the definitive explanation for this seemingly bizarre choice. Importantly, the philanthropy LLC structure offers donors the flexibility to bolster charitable grantmaking with impact investment and political advocacy, free of the restrictions, penalties, and transparency requirements applied to tax-exempt vehicles. The LLC form also provides donors complete control over the organizations they found, including an ability to reclaim donated assets that is absolutely prohibited in traditional forms. With careful planning, all of these advantages can be gained at relatively little tax cost—especially in a post-2017 tax environment. The philanthropy LLC is poised to spread beyond Silicon Valley to the millionaire next door, a development with the potential to do both good and harm. In its concluding section, the Article explores how a turn to such disruptive philanthropic vehicles can both unleash tremendous capital for solving society’s most challenging problems and magnify the influence of its most powerful elites
Charting No Man\u27s Land: Applying Jurisdictional and Choice of Law Doctrine to Interstate Compacts
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Regulating Social Enterprise
Many of today’s entrepreneurs want to commit themselves and their enterprises to something different than a simple bottom line of maximizing value for owners. Instead, they devote their endeavors to more complex missions of pursuing social good while also generating profits. This impulse goes by many names and encompasses entities with varying product lines, business plans, techniques and metrics. For simplicity, this essay will refer to companies pursuing such dual missions as social enterprises. Social enterprises and their founders can make big claims. Some argue their businesses will be more sustainable than traditional for-profits because they consider not only profits, but people, and planet. Others suggest the efficiency and scalability social enterprises offer will help them solve more social problems than traditional nonprofit charities. A mounting number of state legislatures appear convinced by these arguments. Since 2008, lawmakers across the country have enacted legislation enabling new and specialized forms of organization intended specifically to house social enterprises. The forms include “low-profit limited liability companies,” “benefit corporations,” “flexible purpose corporations,” or “social purpose corporations,” thus far, and others may be in the works. Although these organizational forms are still nascent, academics have begun to explore the unique challenges they pose for their fiduciaries, investors, and other constituencies. One major problem this work has identified is enforcement. Yet, the opportunity for state attorneys general – tasked with enforcement in adjacent areas on the state level –– has mostly gone unaddressed. This essay concentrates on these forms, and considers what role state attorneys general might play in their regulation
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