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What will FTX's collapse mean for global health and development? — Devex
webRelevant to AI safety insofar as EA funding networks have significantly supported AI safety research; the FTX collapse disrupted a major funding source and raised questions about concentration of philanthropic risk within the EA ecosystem.
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Importance: 28/100news articlenews
Summary
This Devex article examines the fallout from FTX's bankruptcy on the effective altruism (EA) philanthropic ecosystem, particularly nonprofits in global health, development, and animal welfare that relied on FTX Future Fund grants. Sam Bankman-Fried's 'earning to give' strategy had made him one of EA's most prominent donors, and the collapse left many organizations scrambling for alternative funding while also damaging EA's broader credibility and reputation.
Key Points
- •FTX's bankruptcy left numerous nonprofits without promised multi-year funding, with the FTX Future Fund unable to honor committed grants.
- •SBF's 'earning to give' strategy had positioned him as one of the most visible EA donors, with a peak net worth of $26 billion.
- •FTX Future Fund leadership resigned publicly, citing fundamental concerns about the legitimacy of the business operations funding their philanthropy.
- •Open Philanthropy (funded by Cari Tuna and Dustin Moskovitz) signaled it may step in to support affected organizations.
- •The crisis threatens both direct funding streams and the broader credibility of evidence-based philanthropy as a movement.
Cited by 3 pages
| Page | Type | Quality |
|---|---|---|
| EA Institutions' Response to the FTX Collapse | -- | 53.0 |
| Longtermism's Philosophical Credibility After FTX | -- | 50.0 |
| FTX Future Fund | Organization | 60.0 |
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What will FTX's collapse mean for global health and development? | Devex
News
Philanthropy
What will FTX's collapse mean for global health and development?
Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, has lost his fortune, destroyed his reputation, and dealt a blow to the effective altruism community, which funds many global health and international development causes.
By Catherine Cheney // 18 November 2022 Related Stories
Is MrBeast a force for good in development — or a big problem? What is Trump doing to US nonprofits and philanthropies? What’s broken in global health, and how do we fix it? Devex Newswire: Just how ‘global’ is Trump’s global health strategy? The logo of FTX Cryptocurrency Exchange is seen at the entrance of the FTX Arena in Florida, U.S. Photo by: Marco Bello / Reuters Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, started the now failed crypto-firm because he wanted to make a lot of money — to give it away.
This strategy, often referred to as “earning to give,” drives people to high-paying jobs so they can give half or more of what they earn to help others.
SBF, as he’s long been referred to, emerged as one of the most visible donors in effective altruism , or EA, a movement in philanthropy that encourages donors to use reason and evidence to do the most good with each dollar.
Over time, effective altruism moved from the niche to the mainstream , in part because of the growing number of tech billionaires who embraced it.
But now, FTX has filed for bankruptcy, its founder is enmeshed in scandal, and the cryptocurrency’s collapse has spread panic among nonprofits that had received funds, or were seeking donations, from SBF, who had a net worth of $26 billion at the peak of his fortune, before his personal wealth plummeted overnight.
In trying to do good, SBF has damaged the reputation of effective altruism, a community of donors that has to reckon with some tough questions.
Between the direct impact on nonprofits, and the indirect impact on a growing movement within philanthropy that has steered significant funding to people in low-resource settings, FTX’s collapse could jeopardize causes that have appealed to effective altruists, from animal welfare to global health.
How nonprofits lost money overnight
As more details of SBF’s wrongdoing emerged, leaders of the FTX Future Fund , one of the philanthropic arms of FTX, resigned in an open letter.
“We are now unable to perform our work or process grants, and we have fundamental questions about the legitimacy and integrity of the business operations that were funding the FTX Foundation and the Future Fund,” wrote the former leaders, including Nick Beckstead, who worked for the Open Philanthropy Project . “We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor. We are so sorry that it has come
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