FTX Collapsed and Sam Bankman-Fried’s Wealth Vaporized. Where Does Effective Altruism Stand?

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In May, effective altruism’s de facto thought leader, Scottish philosopher William MacAskill, published a blog post looking at the field’s funding situation. After mentioning some of the movement’s past successes, such as gaining access to the fortune of Facebook co-founder Dustin Moskovitz and wife Cari Tuna, he pivoted to more recent news.

“The primary update comes from the success of FTX,” he wrote. “Sam Bankman-Fried has an estimated net worth of $24 billion (though bear in mind the difficulty of valuing crypto assets, and their volatility), and intends to give essentially all of it away. The other EA-aligned FTX early employees add considerably to that total.”

We know how that turned out. In a stunning fall from grace, FTX filed for bankruptcy, SBF’s paper wealth went from $26 billion in March to something close to zero, and staff at his FTX Future Fund — MacAskill included — resigned over fears that the company “may have engaged in deception or dishonesty.”

The repercussions for effective altruism (EA) are still coming into focus. For a relatively young movement that was already wrestling over its growth and direction, SBF’s shocking implosion has plunged stakeholders in this notoriously introspective corner of philanthropy into varying states of guilt and revulsion, and has sparked concern for nonprofits that will no longer receive the FTX Future Fund’s support. It’s also triggered intense soul-searching around what the field should look like now that EA’s biggest proponent of “longtermism” — the idea that donors have a responsibility to anticipate the needs of future generations — may be headed to jail.

I’ll look at lessons learned from this rapidly unfolding crisis and how the movement plans to regroup in a moment. But first, here’s a quick refresher on the EA landscape before the SBF burst onto — and quickly exited — the scene.

A pre-FTX crash lay of the land

Effective altruism has captured the hearts and minds of donors and commentators for a number of reasons, including its utilitarian bent, razor-sharp focus on performance measurement, and its billionaire tech proponents. Prior to SBF, Moskovitz and Tuna were the most recognizable among them. The couple’s Good Ventures has disbursed approximately $2 billion since 2011 and moves about $200 million out the door each year. Global health is its largest area of grantmaking.

Good Ventures’ partnership with charity evaluator GiveWell produced Open Philanthropy, through which Moskovitz and Tuna aim to spend down their fortune. Again, the project’s largest area of giving is global health and development. In August, Fast Company’s Talib Visram reported that Open Philanthropy distributed $500 million so far in 2022.

Meanwhile, GiveWell has been busy directing other donors to charities focusing on global health issues. The group directed $529 million to recommended charities in 2021 with top recipients targeting malaria, deworming and immunization.

Between them, based on the aforementioned figures, Moskovitz and Tuna’s Good Ventures and Open Philanthropy disburse somewhere in the neighborhood of $700 million annually. Benjamin Todd, who cofounded 80,000 Hours, a nonprofit that looks at which careers have the largest positive social impact, provided a slightly less generous analysis last year, calculating that a total of $420 million went out the door to EA causes every year. Both of those numbers sound like a lot of money, but to put them into perspective, bear in mind that the Hewlett Foundation alone disbursed $529 million in 2021. In other words, it wouldn’t be too much of a stretch to call EA a niche field from a pure grantmaking perspective. 

MacAskill acknowledged as much in his May report on the state of EA funding. He envisioned a future where donors eventually allocate $2 billion annually toward EA causes. “The amount of potential funding is still very small from the perspective of the world as a whole,” he wrote. “But we’re now at a stage where we can plausibly have a very significant impact on some of the world’s biggest problems.

EA’s identity crisis and the SBF effect

Last summer, Todd sketched out how EA donors allocate their support. The top five areas were global health (44%), followed by farm and animal welfare (13%), biosecurity (10%), potential risks from AI (10%) and near-term U.S. policy (8%). While they were still lagging behind global health, the prevalence of biosecurity and AI suggests that longtermism had been making inroads in recent years, much to the consternation of those who considered that trend a case of counterintuitive scope creep for a movement that’s purportedly committed to ameliorating present-day suffering.

In August, Basic Books published MacAskill’s “What We Owe The Future,” arguing that “positively influencing the long-term future is a key moral priority of our time.” In the book, MacAskill encouraged donors to tackle existential threats like genetically engineered pathogens, unrestrained AI and nuclear cataclysm.

But he also admitted that the longtermist mindset doesn’t naturally comport with EA’s notorious adherence to rigorous empirical measurement. “Many of the things we’re tackling, they’re just unfortunately not things where we can get kind of expert data,” he said in a mid-November chat with Slate’s Lizzie O’Leary.

I suspect these questions would have carried less urgency if SBF hadn’t opened the spigot for longtermist causes. Since its launch in February of this year, the FTX Future Fund donated over $190 million to organizations focused on issues like AI ethics, biological weapons shelters, and post-catastrophe infrastructure, as well as MacAskill’s Centre for Effective Altruism. It was expected that the FTX Future would contribute as much as 40% of all EA longtermist grants in 2022.

The scope of the fund’s largesse raised concerns that SBF would bend the EA field toward his thinking. But not only is that point now moot — it also appears SBF wasn’t all that committed to EA in the first place. “I had to be [ethical]. It’s what reputations are made of, to some extent,” he told Vox via Twitter on November 13. “I feel bad for those who get f---ed by it, by this dumb game we woke westerners play where we say all the right shiboleths [sic] and so everyone likes us.” Corporate meltdowns have a way of giving us a look at the men behind the curtain, and needless to say, it isn’t always a great look.

(Patently obvious) lessons learned

First, we need to remind ourselves that often, a substantial portion of tech billionaires’ wealth exists mostly on paper and cannot be easily shoveled out the door nor relied upon as a philanthropic source. It isn’t as if SBF didn’t warn us. When asked in October if he had set up an endowment, he told the New York Times, “It’s more of a pay-as-we-go thing, and the reason for that, frankly, is I’m not liquid enough for it to make sense to do an endowment right now.”

EA proponents should keep that lesson in mind as they scan their list of acolytes who work in highly volatile industries, including Jaan Tallinn, co-founder of Skype, and Vitalik Buterin, co-founder of the blockchain platform Ethereum. (In June, another prominent EA proponent, the crypto-“billionaire” Ben Delo, was sentenced to 30 months probation for his role in violating the U.S. Bank Secrecy Act.)

The movement’s leaders — and any movement leader, for that matter — may also want to refrain from, say, proclaiming that donors have committed $46 billion “to effective altruism (going forward),” since, as we’ve seen, some commitments never materialize. Rather than rely on a handful of individuals whose fortunes may be illusory, longtermist proponents need to convince the broader donor base that causes like AI oversight, bioengineered pandemic preparedness, and rebuilding civilization after a nuclear cataclysm are worthwhile causes.

This will be an uphill climb. It’s hard to imagine most major donors, private foundations, or middle- and low-income Americans bankrolling nonprofits working on mitigating an AI takeover that may or may not happen 500 years from now. This isn’t to malign longtermists’ intentions, but simply to state that as a charitable north star, the philosophy is too conjectural to resonate with everyday givers navigating a world of suffering and inequality.

I should also note that donors will naturally question longtermists’ ability to foresee the distant future when thinkers failed to recognize in real time that the movement’s main funding source was built on a house of cards.

Zooming out further, the field should walk back from its “earn to give” pitch. We’re told a young Bankman-Fried had initially planned to focus his attention on animal welfare until MacAskill, who was a student at the time, encouraged him to consider making as much money as possible so he could, in turn, give away as much money as possible. SBF signed on, eventually ended up in the environmentally devastating field of crypto, and the rest is history.

Not only is the “earn to give” credo ethically dubious, it’s also another attempt to circumvent the hard work of cultivating a broad and deep donor base beyond Silicon Valley boardrooms and Oxford lecture halls. If EA is to grow beyond its niche status, its proponents should focus less on advancing questionable philosophical precepts and more on demonstrating the good that donors — erstwhile billionaires or otherwise — can do in the here and now.

EA is dead, long live EA

Longtermism’s future may seem bleak, but it’s important to remember that classic “short-term” EA was a durable and growing force long before Tom Brady and Gisele appeared in an FTX commercial encouraging ordinary folks to invest in crypto. A lot of the media coverage discussing the philanthropic implications of SBF’s downfall has either glossed over or failed to recognize that distinction.

As I mentioned above, GiveWell directed $529 million in 2021 to its recommended charities, most of which were focused on global health. That was a 110% increase over the previous year, and it hopes to direct $1 billion per year by 2025. Meanwhile, MacAskill’s report on the state of the field noted that “the biggest scale-up in giving is currently happening” in global health and wellbeing. EA was chugging along nicely before SBF lost all his money, and I’ve yet to see evidence to suggest that recent developments will compel donors to dial back support for low-cost/high-yield global health interventions.

The biggest wildcards moving forward are EA’s unofficial founding couple, Moskovitz and Tuna, and their giving vehicle Open Philanthropy.

On November 10, as the full extent of FTX’s collapse became clear, Open Philanthropy’s co-founder and co-CEO Holden Karnofsky took to the Effective Altruist Forum to announce that Open Philanthropy will be pausing most new longtermist funding commitments “until we gain more clarity, which we hope will be within a month or so.” Once the dust settles, Open Philanthropy will pick up where it left off. “We will raise the bar for our giving,” he wrote, “and we don’t know how many existing projects that will affect, but we still expect longtermist projects to grow in terms of their impact and output.”

Until then, the outfit’s “available capital has fallen over the last year” due to “general market movements (particularly the fall in Meta stock.)” Moskovitz’s net worth, a portion of which is tied up in plummeting Meta stock, fell 59% from $21 billion in November 2021 to $12 billion today. But Karnofsky was quick to note we won’t be seeing a replay of the SBF fiasco. Public reports of the couple’s net worth don’t account for “resources that are already in foundations,” he wrote. “Dustin and Cari still expect to spend nearly all of their resources in their lifetimes on philanthropy that aims to accomplish as much good per dollar as possible.”