FTX, SBF, and EA: When a Do-Gooder Does Bad

One of effective altruism’s biggest givers, crypto-bro Sam Bankman-Fried (often referred to as SBF), may have built his billion-dollar empire on lies and under the cover of goodwill bought by his extreme giving. 

Ross Douthat of the New York Times referred to Bankman-Fried’s actions as “playing Robin Hood using proceeds from an over-leveraged Ponzi Scheme.” And he did so from his penthouse of pills and polyamory in the Bahamas. At least he had fun, but now the entire Effective Altruism (EA) movement is under fire. 

Just look at these headlines written after SBF’s fall:

Effective Altruism Committed the Sin It Was Supposed to Correct

Effective altruism solved all the problems of capitalism⁠—until it didn’t. What if a movement designed to do the maximum good for the most people actually helped a few people get very rich?

Is Effective Altruism to Blame for Sam Bankman-Fried?

It looks like SBF stole money from Tom Brady, the mean shark from Shark Tank, and a lot of other people to the tune of billions of dollars, and then gave much of it away to folks working to prevent future robots from deleting humanity. 

What money was left was imaginary. When Crypto started to collapse and people wanted their money back from SBF’s exchange, FTX, it was essentially a run on the bank, and the bank didn’t have any money! All of that is probably an oversimplification. You can find much more in-depth analyses of what happened from people who don’t think crypto is fake fairy dust spreading cancer upon our economy and climate. But that’s my take, and I don’t want to examine crypto here. I want to focus on Effective Altruism. 

Effective Altruism

A few years ago I wrote “Where Am I Giving?” a book in which I went in search of a good person equation. After realizing and accepting that we live in a world of injustice and inequality, I sought an answer to the question: What can each of us do to make a positive  impact? The book was heavily inspired by the work of philosopher Peter Singer. In his book “The Life You Can Save,” which should be read by everyone on Earth, Singer essentially states that we ought to do the most good we can do to help those living in extreme poverty and eliminate human suffering.

This simple, yet challenging idea, inspired the Effective Altruism movement, led by Will MacAskill among others. Essentially we need to give more with our heads than just our hearts. Websites such as Singer’s The Life You Can Save, MacAskill’s Giving What We Can, and ultimately effectivealtruism.org recruited givers and pointed them to orgs like GiveWell.org that conducted  triple-blind analyses of nonprofits to see which were the most effective at saving a life. And then encouraged people to donate to them. 

I was sold on the idea. In fact, as I started to research my book, I saw it as sort of a boots-on-the-ground look at EA. I visited and wrote about Give Directly, one of the top recommended sites of the movement. I gave money to them along with the Against Malaria Fund, which had been deemed the most effective for years. 

Where Am I Giving

As I researched the book, my idea of giving broadened beyond that of EA, yet I was still aligned enough with EA that I solicited and was thrilled to receive blurbs from both Singer and MacAskill. 

“Kelsey Timmerman has been where very few donors go, and has seen the positive impact of the highly effective giving I advocate, as well as the negative impact of less desirable forms of giving.  Where Am I Giving? offers thought-provoking and often entertaining insights into the importance of thinking carefully about where we give. ” 

Peter Singer, professor of bioethics, Princeton University, and founder of The Life You Can Save.

“Traveling with Kelsey Timmerman in the pages of Where Am I Giving? will inspire you to do the most good you can do.” 

Will MacAskill, President of the Centre for Effective Altruism and author of Doing Good Better: Effective Altruism and How You Can Make a Difference

My book wasn’t just a boots-on-the-ground look at effective altruism; it became something different, partly because the EA movement lost me with certain ideas, including “earning to give” and the movement’s ever-increasing focus on directing funds to preventing human extinction by AI and eliminating animal agriculture. But also because I came to realize that there were more forms of giving and human generosity than donations to a nonprofit you read about on a website. 

The idea of “earning to give” offered absolution to the uber-wealthy, so it makes sense that someone like SBF would be into it when he met MacAskill. 

From Intelligencer by Eric Levitz: 

“…MacAskill hoped to guide MIT’s aspiring altruists onto that path. While in Cambridge, he learned of an especially promising candidate for the cause, an undergraduate named Sam Bankman-Fried.

Over lunch, Bankman-Fried told MacAskill that he had recently become a vegan and wanted a job in which he could advance the cause of animal welfare. MacAskill suggested that he would reduce animal suffering far more if he tried to make a lot of money and then donated it to relevant charities. Bankman-Fried took his advice.”

SBF decided to go into finance and then he started his own hedge fund. Eventually, his net worth was reported to be around $26 billion. He intended to give much of it away to EA supported causes, especially those supporting ending animal agriculture and the threat of artificial intelligence. 

Billionaires vs Billionaires’ Robots

When the EA movement gets away from maximizing giving to most effectively end human suffering, it loses me. Tushar Gandhi, Gandhi’s great grandson, said something to me about the philanthropy of the uber-wealthy  that I won’t soon forget:

“They are sitting in five-star hotels sipping on coffee and they are talking about poverty. What do they know about it? They haven’t even smelled poverty.”

Maybe it’s more comfortable for the ultra-rich to focus on animal suffering and suffering of people who don’t exist yet because they don’t have to deal with the suffering of the world they have helped shape, and which rewards them so much.  

Parts of EA have gotten progressively tech-broish. It’s overly-focused on math, reducing humans and meaningful lives and suffering to statistics. I get the need to focus on the future, even when suffering exists now, as long as thinking too far into the future, the focus of MacAskill’s new book on futurism, doesn’t distract us from attending to and helping the humans we share a world with now. 

The AI thing really loses me. The EA community has often given it more thought and resources than working on climate solutions. Some billionaires are creating an AI future, while others, including SBF, are trying to prevent AI from eradicating humanity. Think Matrix and Terminator. I think most billionaires are so insulated and out of touch with the real world that they should stay out of the affairs of us mortal men. After all, any time the Greek Gods came down to earth, they just fucked things up even more. (Note: I don’t think billionaires are Gods, but they certainly are treated as such in our predominant form of capitalism.)

I also struggled with EA’s focus on animal welfare. Not that animals shouldn’t be treated more humanely. Ninety-percent of animal agriculture treats animals horribly and harms our world in a variety of ways. Many EA funds aren’t going to support proper animal agriculture, but instead to ending animal agriculture. We need animals as part of regenerative farming systems, but that’s my next book. 

The Need for “effective altruism”

Parts of EA drifted from its origins, but to say that EA is the problem because of its role in the creation and association with SBF is to ignore the immense good it has done. I’ve sat in the living rooms of Kenyans who received direct cash payouts from Give Directly, an organization supported by the EA community. The people I met had their lives changed forever. For the first time they didn’t have to worry about how they were going to find their next meal, and they could work toward a dream and put an unrealized skill and talent to work. 

The way we give needs to be challenged. EA is challenging it. We need to give more and give smarter. All giving isn’t equal and some is harmful. Many of us don’t know the difference. 

Giving more and giving effectively aren’t goals that should change because of the bad behavior of one person. Effective Altruism, the movement that requires the term to be capitalized and has a fancy centralized office has its flaws, but working toward and supporting “effective altruism” that seeks to reduce human suffering is still a worthy goal we should all strive toward, and one that Effective Altruism can still play a critical role in. 

Still Curious?

Calculate the impact your income can make using Peter Singer’s impact calculator.

Listen to the episode of The Good People podcast in which I interview the Joe Huston, the CFO, of the Give Directly. 

Read my book Where Am I Giving? to learn how to give in an effective way that connects you with your local and global communities. You have a lot more to give than money.


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