Facebook is one of the largest and most profitable technology companies in the world. Despite its massive profits, the company has faced scrutiny over the years for not contributing more money to charitable causes. So exactly how much does Facebook donate to charity each year?
Facebook’s Profits
To understand Facebook’s charitable contributions, it helps to first look at the company’s overall profits. In 2021, Facebook reported revenue of $117.9 billion and net income of $39.4 billion. This was a 37% increase in revenue and a 35% increase in profits from the previous year.
Facebook generates the vast majority of its revenue from advertising. Advertisers pay Facebook to display ads on its platforms which include Facebook, Instagram, Messenger, and WhatsApp. With over 3.5 billion monthly active users across these platforms, Facebook has a hugely valuable audience for advertisers to target.
Criticism Over Lack of Philanthropy
Despite its soaring revenue and profits, Facebook has faced ongoing criticism for not contributing more money to charitable causes. This criticism stems from comparing Facebook to other major technology companies that have made philanthropy a core part of their missions:
- Bill Gates – Bill Gates, the co-founder of Microsoft, established the Bill & Melinda Gates Foundation in 2000. With an endowment of $65 billion, it is the largest private charitable foundation in the world.
- Warren Buffett – The billionaire investor has pledged over $30 billion to the Gates Foundation to fund global health and anti-poverty programs.
- Mark Zuckerberg – Facebook’s co-founder established the Chan Zuckerberg Initiative with his wife Priscilla Chan in 2015. They have committed 99% of their shares in Facebook, valued at $45 billion at the time, to the initiative.
Compared to founders of other tech companies, Mark Zuckerberg was late to large-scale philanthropy. And Facebook as a company has also lagged behind its peers in corporate philanthropy.
How Much Does Facebook Donate to Charity?
So exactly how much does Facebook donate to charity each year? Let’s take a look at the numbers:
| Year | Total Giving | Percentage of Pre-Tax Profits |
|---|---|---|
| 2017 | $1.1 billion | 1% |
| 2018 | $1.65 billion | 1% |
| 2019 | $1.1 billion | 0.9% |
| 2020 | $1.1 billion | 1.9% |
| 2021 | $1.33 billion | 1.2% |
In recent years, Facebook has donated around 1% of its pre-tax profits to charity each year. Their total giving peaked in 2018 at $1.65 billion.
Breakdown of Facebook’s Philanthropy
Facebook broadly directs its giving into two categories:
- Cash Giving – Direct donations to nonprofits and charitable causes around the world.
- In-Kind Giving – Donations of tech tools, services, training, and advertising credits to community partners.
Around 75% of Facebook’s philanthropy comes in the form of cash donations. The other 25% is in-kind giving of resources. Some examples of Facebook’s in-kind philanthropy include:
- Free advertising credits for nonprofits
- Discounted or free access to Workplace, Facebook’s communications software
- Technology tools and training for community partners
Where Does Facebook’s Charity Go?
Facebook divides its cash giving into four focus areas:
- Community Development – Supporting local communities in areas where Facebook operates. For example, funding affordable housing initiatives near headquarters.
- STEM Education – Funding education programs focused on science, math, engineering, and technology.
- Connectivity – Bringing internet access to unconnected regions worldwide.
- Criminal Justice Reform – Reform of the US criminal justice system with a focus on racial equity.
In addition to these four areas, Facebook responds to natural disasters and global crises by providing emergency relief funding when needs arise. For example, they have donated to humanitarian efforts for refugees and COVID-19 relief.
Comparison to Other Tech Companies
Facebook’s pattern of donating around 1% of profits is low compared to other major technology corporations:
| Company | Total Giving (FY2021) | Percentage of Pre-Tax Profits |
|---|---|---|
| $836 million | 5% | |
| Apple | $300 million | 0.7% |
| Microsoft | $2.5 billion | 4% |
| $1.33 billion | 1.2% |
Google and Microsoft donate around 5% and 4% of profits respectively. Facebook lagged behind at 1.2% in 2021. Apple has faced similar criticism as Facebook, donating less than 1% of its profits to charity.
Why Doesn’t Facebook Give More?
Facebook is a hugely profitable company, earning nearly $40 billion in 2021 alone. This raises the question – why doesn’t Facebook donate more of its profits to charity?
There are a few potential reasons why Facebook’s giving is relatively low:
- Prioritizing Growth – Facebook remains in growth mode. The company may prefer to reinvest profits into hiring, expansion, acquisitions, and new products rather than large-scale giving.
- Stockpile Cash Reserves – Facebook had over $55 billion in cash reserves at the end of 2021. The company may want these massive reserves available for future investments and acquisitions.
- Tax Benefits – There is less tax incentive for Facebook to ramp up charitable giving compared to individuals like Gates, Buffett, and Zuckerberg who can avoid capital gains taxes by donating stock.
Facebook also points out that its tools provide billions of dollars in value to charity. But critics argue the company should still give much more of its cash profits directly.
Pressure to Increase Giving
Facebook faces increasing pressure, both internally and externally, to boost its charitable giving.
Some of the pressure points include:
- Criticism from lawmakers, especially Democrats, for not contributing more to social causes.
- Demand from the public and nonprofits for the company to give back more.
- Employees urging leadership to increase philanthropy.
- Need to improve public reputation as a “corporate citizen”.
In response to this pressure, Mark Zuckerberg and his wife Priscilla Chan pledged $3 billion over 10 years to help cure, prevent, or manage all diseases by the end of the century. Facebook also announced a $150 million donation to support affordable housing in 2021.
While these are big numbers, they represent a small fraction of Facebook’s profits and cash reserves. Expect the pressure to continue for the company to ramp up its charitable giving to be more in line with other tech giants.
Conclusion
In summary, Facebook donates around 1% of its profits to charity each year. This totaled $1.33 billion in 2021. The majority comes in direct cash donations, with the rest providing in-kind resources.
Compared to other major tech companies like Google and Microsoft, Facebook’s charitable giving is relatively low. The company faces ongoing criticism and pressure to increase its philanthropy. But so far, Facebook has prioritized business growth and cash reserves over large-scale giving.
Facebook argues its products themselves provide billions in value by allowing nonprofits and communities to connect. But many believe the highly profitable company could and should be giving much more of its cash earnings directly to charitable causes worldwide.